Which of the following is true about a star SBU?
A) Star SBUs may barely support themselves; in some cases, they actually drain off cash resources generated by other SBUs.
B) Star SBUs provide the organization with large amounts of cash because their market is not growing significantly.
C) An SBU that is a star has a small share of a high-growth market.
D) An SBU that is a star has a high share of a high-growth market and typically needs large amounts of cash to support rapid and significant growth.
E) Because the market of star SBUs is not growing significantly, the cash is generally used to meet the financial demands of the organization in other areas.

Question

Quizplus · Accepted Answer

An SBU that is a star has a high share of a high-growth market, which means that it requires a large amount of cash to support its rapid and significant growth. Star SBUs are expected to generate high returns on investment in the future, but they require a lot of resources in the present to sustain their growth.

Which of the Following Is True About a Star SBU