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Question: 1 / 400

Which category in the Boston Consulting Group Matrix is known for large profits and low investment?

Star

Cash cow

The category in the Boston Consulting Group Matrix recognized for generating large profits with low investment is the Cash Cow. Cash Cows are established products or business units that have a high market share in a mature or declining market. Due to their established presence, they require comparatively less investment to maintain their position and continue generating significant profits.

In this context, a Cash Cow benefits from economies of scale, having already addressed the substantial upfront costs associated with market entry and growth. As these products are well-recognized and have loyal customers, they can continue to provide cash flow that can be used to support other areas of the business, such as funding new product development or supporting marketing for Stars or Question Marks.

Understanding the role of Cash Cows is essential in strategic management, as they provide stability and funding for growth initiatives, making them a critical component of a balanced portfolio in the BCG Matrix.

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