ACCA Strategic Business Leader (SBL) Practice Exam

Which category represents businesses with high growth and a strong competitive position?

1. Cash cows

2. Stars

3. Dogs

4. Question marks

The correct answer is: Stars

The category that represents businesses with high growth and a strong competitive position is indeed identified as "Stars." In the context of the BCG (Boston Consulting Group) matrix, Stars are the business units that not only enjoy a significant market share but also operate in a rapidly growing market. This dual advantage allows them to generate substantial revenue while also benefitting from the increasing demand for their products or services. Stars require substantial investments to maintain their growth momentum, as they have the potential to become cash-generating "Cash Cows" as the market matures. They symbolize the ideal scenario for a business, where strong competitive positioning and high growth coexist, leading to both profitability and investment opportunities. In contrast, the other options represent different scenarios in the market. For instance, Cash Cows are characterized by high market share but operate in low-growth markets, making them less dynamic compared to Stars. Dogs have low market share and low growth, indicating underperformance and limited potential for profitability. Question marks are in a turbulent phase, where they have low market share in high-growth markets, facing uncertainty about their future trajectory. Understanding these categories helps businesses strategize effectively based on their market positioning and growth prospects.