This is the riskiest category for investment

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Joywtome231
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Joined: Sun Dec 22, 2024 4:03 am

This is the riskiest category for investment

Post by Joywtome231 »

Profits from Cash Cows are usually used to develop other projects.
Typically, these are products and services that have existed for a long time - they are successful, have a good reputation, and customers trust and buy them regularly. Such products are in the maturity stage of their life cycle. The main task for this category is to maintain a strong position.

For example, Nescafe coffee generates the most revenue among all Nestle products. The Nescafe brand is the "Cash Cow" of this company.

Stars
This category is characterized by a high relative market share and a high growth rate.

Such products and services are still quite vulnerable, as competition in emerging markets is strong and unpredictable. Therefore, significant resources are needed to maintain their current position and develop them. “Stars” need to be carefully managed to ensure their long-term success.

Zvezda is aiming to take a leadership position in a fast-growing market, but this may require significant investment.
When demand growth slows down, they will become "Cash Cows". This is the most attractive category for investment.

An example of "Zvezda" is the Yandex Food grocery delivery service. It began to develop actively after 2020 and quickly took a worthy position among all areas of the Yandex ecosystem. The level of competition is now high, and in order to overtake Samokat, Cooper, Delivery and other market players, you will have to invest quite a lot of resources. Brands continue to fight for the status of leader.

Question marks
Another name for the category is "Difficult Children" or "Problem Children", "Dark Horses". These are products or business units with a low relative market share, but the market itself is growing and developing rapidly.

These are usually new products and services that have appeared recently. The company must carefully evaluate their potential and conduct additional research to decide on further development.

- careful data analysis is required before funding it.
Over time, "Question Mark" can increase its market share and become "Star". But this hong kong phone number list is only possible if the company has resources. If there are not enough funds, then it is better to abandon such a product.

An example of "Question Mark" is the Russian brand Nemoloko, which was released by the manufacturer "Sady Pridonya". The market for alternative plant milk is currently developing rapidly. But in order to catch up with the leaders, Planto, Velle, Green Milk, the company will need to significantly expand the line and work on flavors.

Dogs
An alternative name for the category is "Lame Duck" or "Dead Weight". These are business units with a low relative market share. The market itself is growing very slowly, stagnating or falling. As a rule, such products and areas are unprofitable or bring in very little income, they have low profitability.

Investments in them should be reduced and, over time, withdrawn from the company's portfolio to avoid further losses and unnecessary expenses.
In some cases, products and services from the "Dogs" category can be repurposed for other functions or a different audience . But this is more of an exception than a rule. More often, the manager decides to close or sell such a business, especially if it brings losses and problems.

An example of "Dog" is the iPod audio player. In 2022, Apple discontinued it, as demand had long been declining and market share was falling. Technology has moved on - now you can start streaming music from your phone.
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