The key words in the different zones indicate different strategies for businesses/products falling within these areas. It must be pointed out that Shell found the zones to be of irregular shape, with no hard and fast boundaries, they shade into one another and in some cases they overlap.
Disinvest
Products in this area will probably be losing money. It is recommended that assets be disposed of and the resources of cash, feedstock and manpower resulting from this action be redeployed more profitability.
Phased Withdrawal
A company with an average to weak position in a low-growth sector will not be earning significant amounts of cash and should gradually be withdrawn. Efforts should be made to realize the value of the assets and use the money from these in a more profitable area. This would also be the strategy for a weak positioned company in an average market sector
Cash Generator
This is the type of product that is moving towards the end of its lifecycle and is being replaced by other products. Finance should not be used for expansion and the business (if it is profitable) should be used as a source of cash in other areas – efforts should be made to maximise profits, as there is no long-term future.
Custodial
A product falls into this area when the company has a position of weakness either in respect of market position (lower than 3 stars) process economics, hardware, feedstock or two or more of these in combination. This type of positioning occurs with the weaker products where there are too many competitors. The strategy is to maximise cash generation without committing further resources.