After SBUs have been identified for a particular organization, the next step is to categorize each SBU within one of the following four matrix quadrants:

Stars – SBUs that are “stars” have a high share of a high-growth market and typically need large amounts of cash to support their rapid and significant growth. Stars also generate large amount of cash for the organization and are usually segments in which management can make additional investments and earn attractive returns.

Cash Cows – SBUs that are cash cows have a large share of a market that is growing only slightly. These SBUs provide the organization with large amounts of cash, but since their market is not growing significantly, the cash is generally used to meet the financial demand of the organization in other areas, such as the expansion of a star SBU.

Question Marks – SBUs that are question marks have a small share of a high-growth market. They are dubbed “question marks” because it is uncertain whether management should invest more cash in them to gain a larger share of the market or deemphasize or eliminate them. Management will chose the first option when it believes it can turn the question mark into a star, and second when it thinks further investment would be fruitless.

Dogs – SBUs that are dogs have a relatively small share of a low-growth market. They may barely support themselves; in some cases, they actually drain off cash resources generated by other SBUs.