Henderson reasoned that the cash required by rapidly growing business units could be obtained from the firm's other business units that were at a more mature stage and generating significant cash. Thus the position of a business on the growth-share matrix provides an indication of its cash generation and its cash consumption. A second assumption is that a growing market requires investment in assets to increase capacity and therefore results in the consumption of cash.
This assumption often is true because of the experience curve increased relative market share implies that the firm is moving forward on the experience curve relative to its competitors, thus developing a cost advantage. This framework assumes that an increase in relative market share will result in an increase in the generation of cash.
