Questions and Answers
What happens to Stars in the long run when the growth rate slows down?
What is the primary characteristic of Stars in the BCG Growth-Share Matrix?
What is the characteristic of Cash Cows in the BCG Growth-Share Matrix?
What is the main challenge of Question Marks?
Signup and view all the answers
What is the ultimate goal for business organisations with regard to Question Marks?
Signup and view all the answers
Why do Question Marks require heavy investment?
Signup and view all the answers
What can Question Marks become if left unattended?
Signup and view all the answers
What is the main advantage of Stars in the BCG Growth-Share Matrix?
Signup and view all the answers
What is the primary focus of top management in an organization while making strategic decisions?
Signup and view all the answers
What are Grand Strategies also known as?
Signup and view all the answers
According to Michael E. Porter, what is the primary objective of a Focus Differentiation strategy?
Signup and view all the answers
What is the primary purpose of Functional Strategies?
Signup and view all the answers
What is the role of middle management in the strategic decision-making process?
Signup and view all the answers
What are the four generic strategies discussed by William F. Glueck and Lawrence R. Jauch?
Signup and view all the answers
How can strategies be classified?
Signup and view all the answers
What is the primary objective of a Cost Leadership strategy?
Signup and view all the answers
What is the primary purpose of the BCG growth-share matrix?
Signup and view all the answers
What does the vertical axis of the BCG matrix represent?
Signup and view all the answers
What are the primary characteristics of 'Cash Cows' in the BCG matrix?
Signup and view all the answers
What is the purpose of classifying businesses or products using the BCG matrix?
Signup and view all the answers
What is represented by the horizontal axis of the BCG matrix?
Signup and view all the answers
What type of businesses or products are represented by 'Question Marks' in the BCG matrix?
Signup and view all the answers
What is the benefit of using the BCG matrix in portfolio analysis?
Signup and view all the answers
Study Notes
Strategic Management
BCG Growth-Share Matrix
- The BCG Growth-Share Matrix is a tool for portfolio analysis of a company having invested in diverse businesses with varying scope of profits and growth.
- The matrix classifies businesses on a two-dimensional growth share matrix with market share and market growth rate as the two dimensions.
- The vertical axis represents market growth rate, providing a measure of market attractiveness.
- The horizontal axis represents relative market share, serving as a measure of company’s strength in the market.
Types of Products or SBUs
- Stars: Products or SBUs that are growing rapidly, needing heavy investment to maintain their position and finance their rapid growth potential, representing best opportunities for expansion.
- Cash Cows: Low-growth, high market share businesses or products that generate cash and have low costs, established and successful, needing less investment to maintain their market share.
- Question Marks: Low market share businesses in high-growth markets, requiring a lot of cash to hold their share, needing heavy investments with low potential to generate cash.
- Dogs: Low-growth, low market share businesses or products.
Strategic Choice
- Businesses follow different types of strategies to enter the market, stay relevant, and grow in the market.
- Strategies can be classified based on levels of the organisation, stages of business life cycle, and competition.
- Grand Strategies/Directional Strategies include stability, growth, retrenchment, and combination.
- Competitive Strategies include Cost Leadership, Differentiation, Focus Cost Leadership, and Focus Differentiation.
- Functional Strategies are meant for strategic management of distinct functions such as Marketing, Financial, Human Resource, Logistics, and Production.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
This quiz is about the product portfolio matrix in strategic management, which helps organisations identify four types of products or Strategic Business Units (SBUs).
