In: Economics
1- Using the BCG matrix, a product with low industry growth rate and a high relative market share would be called a:
cash cow
star
question mark
dog
2- in which stage of the product life cycle that features of the product are typically increasing?
Growth
Maturity
Introduction
Decline
1) Using the BCG matrix, a product with low industry growth rate
and a high relative market share would be called a: Cash
cow.
Explanation: The BCG matrix is created by the Boston &
Consulting Group, it is also known as Growtn/Share Matrix. It is
basically designed for companies in planning to asess whether their
products are giving them growth, whether they should continue or
discontinue or develop products in the long term. This matrix is
divided into four quadrants by studying relative market share and
market growth. These are Dogs, Question Mark or Problem Child,
Stars & Cash Cows.
Cash Cow: These products are simply those products which have a
large market share but in a slow growth industry. These are mature,
well established products which may require less investment but
generate cash that can be invested in other business units.
Dogs: These products have a small market share in a relatively
mature industry. These products are a drain on a company's
resources and should be liquidated or removed from the
portfolio.
Stars: These products have a large market share in a fast growth
industry. They generate a higher ROI but they will require ongoing
investment to maintain their lead as the market is growing
rapidly.
Question Mark or Problem Child: These products have a small market
share in a high growth market. These products may require a lot of
investment to get a desired result but whether they will succeed or
not is uncertain.