BMT 4 BCG Matrix

Question 1

BCG Matrix

Answer 1

• A tool that helps businesses analyse and manage their product portfolio
• analyses a firm’s product portfolio in terms of
• market share - measured relative to competitors
• market growth - high market is usually >10%

Question 2

Product portfolio 4 products in maturity

Answer 2

4 products go into decline - have no product

Question 3

product portfolio 4 products in introduction

Answer 3

amount of investment required - lots
future of company secured - products go mature

Question 4

Question mark (Problem Child)

Answer 4

• high market growth
• low market share
• product life cycle = introduction
• high promotion costs to establish brand and not all will succeed
• negative cash flow

Question 5

Star

Answer 5

• high market growth
• high market share
• product life cycle = growth
• need high promotion costs as the market is growing - if you don’t promote other businesses will overtake you
• maybe positive cash flow/profit

Question 6

Cash cow

Answer 6

• Low market growth
• high market share
• product life cycle = maturity
• some, but less, promotion costs - maintaining brand
• positive cash flow and profit

Question 7

Dog

Answer 7

• Low market growth
• Low market share
• product life cycle = decline
• probably needs to be replaced