Page "Growth-share matrix" Paragraph 16
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This indicates likely cash generation, because the higher the share the more cash will be generated.
As a result of ' economies of scale ' ( a basic assumption of the BCG Matrix ), it is assumed that these earnings will grow faster the higher the share.
Thus, if the brand had a share of 20 percent, and the largest competitor had the same, the ratio would be 1: 1.
If the largest competitor had a share of 60 percent ; however, the ratio would be 1: 3, implying that the organization's brand was in a relatively weak position.
If the largest competitor only had a share of 5 percent, the ratio would be 4: 1, implying that the brand owned was in a relatively strong position, which might be reflected in profits and cash flows.
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