The Star Principle

The author in his book like to show how you may become millionaire by explaining in this way his successful strategy used to became rich and he is very serious about this case. The star Principle uses a diagram called “Boston Consulting Group’s (BCG) Portfolio Diagram”  and tries to show us the way how we can use it in our daily live. This portfolio diagram divides the businesses in four categories: cash cows, question marks, dogs and stars.

The explanation of each one:  Cash Cows: These companies have high market share and they gain more that in fact need to maintain their business, at the same time their growth rate is low. Question marks: these companies are growing rapidly which means consume more cash but they have low market share and less cash generation. Dogs: these companies generate enough cash and in order to maintain their market share. Stars: they stand at the top, they are leaders. They have high return and are profitable. Something should be highlighted: IF YOU WANT TO BE SUCCESFUL you should be part of a STAR business or start a STAR BUSINESS.  To have a star business means to be leader to a market niche which grows fast. But a market niche at the begging is a small part of the large market or the main market but with a tendency to grow with very big steps. So it’s very profitable to invest in star companies.