TrueAutos Inc.is a large automobile company.The company's petrol cars strategic business unit (SBU)has been recognized as a cash cow, and its hybrid electric cars SBU has been categorized under stars.Which of the following can be inferred from this scenario?
A) The petrol cars SBU operates in a low-growth market, whereas the hybrid electric cars SBU operates in a high-growth market.
B) The petrol cars SBU will have a relatively low market share in its industry, whereas the hybrid electric cars SBU will have the least market share in its industry.
C) The strategic recommendation for the hybrid electric cars SBU will be to harvest it, whereas for the petrol cars SBU, the company should just maintain it.
D) The petrol cars SBU is more important than the hybrid electric cars SBU in terms of future growth for the company.

Question

Quizplus · Accepted Answer

From this scenario, it can be inferred that the petrol cars SBU operates in a low-growth market, whereas the hybrid electric cars SBU operates in a high-growth market. Cash cows are strategic business units that compete in a low-growth market but hold considerable market share. A corporation's star strategic business units (SBUs) hold a high market share in a fast-growing market. Their earnings are high and either stable or growing.