Which strategic business unit is likely to be in a slow-growing market but is still profitable?

Prepare for the Management and Organization Module 6 (06-MGMT-ORG) – Strategy Exam. Engage with flashcards, multiple choice questions, hints, and explanations. Excel in your exam!

The identification of the strategic business unit that is likely to be in a slow-growing market but still remains profitable aligns well with the characteristics of cash cows. Cash cows are defined as units that generate more cash than what is needed to maintain their market position. They typically operate in established markets that are not experiencing significant growth, yet they provide a steady and high level of profit due to their strong market share and relatively low investment requirements.

In contrast, stars are typically in fast-growing markets and require substantial investment to maintain their growth trajectory. Question marks, on the other hand, are in growing markets but do not have a significant market share yet, which means they often require considerable resources to improve their potential. Dogs generally operate in markets that are slowly declining and do not produce significant profits. Therefore, cash cows are ideal in this context as they represent units that benefit from profitability in a stable yet slow-growth environment.

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