Discuss CIPS L5M6 Exam Topic 2 Question 12

On the BCG Matrix, what is a cash cow?

AHigh market share, high market growth

BHigh market share, low market growth

CLow market share, low market growth

DLow market share, high market growth

Suggested Answer: B

Within the Boston Consulting Group [BCG] Matrix, a Cash Cow represents a product or business unit that holds a high market share in a low-growth market. These products typically generate strong and stable cash flows because they dominate their markets with little new competition. Although growth opportunities are limited, these units require minimal investment and often fund other parts of the business.

For example, a well-established soft drinks brand in a mature market is a classic cash cow. While sales are stable and market share is high, growth potential is low due to saturation. This differs from:

Stars [high share, high growth] which require significant investment.

Question Marks [low share, high growth] which may or may not succeed.

Dogs [low share, low growth] which are often candidates for divestment.

In category management, identifying cash cows helps procurement teams prioritise efficiency and cost management, ensuring these categories remain profitable without heavy strategic input.

[Ref: CIPS L5M6 Study Guide, p.117 -- BCG Matrix and procurement strategy]

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20 comments · newest first

Arleen 2 months ago

I feel confident about B too. It’s a safe bet.

Erick 2 months ago

B is definitely right. They’re reliable for funding.

Natalie 2 months ago

A is for stars, not cash cows.

Terry 3 months ago

I’m not sure. What about A?

Margart 3 months ago

Yeah, that makes sense. They generate steady cash flow.

Simona 3 months ago

I think it's B. High market share, low growth.

Ronny 3 months ago

I thought cash cows were supposed to grow too, this is confusing.

Davida 3 months ago

Definitely B, that's how I remember it!

Maia 4 months ago

Wait, are we sure it's not A? That sounds like a cash cow too.

Cassie 4 months ago

Totally agree, cash cows are the best for steady income!

Kenny 4 months ago

It's B! High market share, low market growth.

Glory 4 months ago

I thought it was A at first, but B makes more sense.

Xuan 4 months ago

Cash cows are the steady earners for sure!

Lazaro 4 months ago

Wait, are we sure about that? Sounds too simple.

Francis 6 months ago

Totally agree, that's the definition!

Gerald 6 months ago

It's B! High market share, low market growth.

Kaitlyn 7 months ago

I definitely recall that cash cows have high market share, but I can't remember if it's low growth or not. I hope it's B!

Ashlyn 7 months ago

I’m a bit confused. Isn’t a cash cow supposed to generate steady income? I feel like it might be A or B.

Roosevelt 7 months ago

I remember practicing a question like this, and I think cash cows are the ones with high market share and low growth. So, I’d go with B.

Elenor 7 months ago

I think a cash cow is related to high market share but I'm not sure if it's high or low growth.

CIPS L5M6 Exam - Topic 2 Question 12 Discussion