Question

The BCG (Boston Consulting Group) Analysis is widely used because of its simplicity and objectivity. For each business within a company -- on the Y-axis is plotted industry growth rate (plus and minus from a zero point) and on the X-axis is plotted relative market share, defined as the sales of a company divided by the sales of the industry leader. This gives us a look at our portfolio of businesses, showing the growth rate of their industries and our relative strength in each compared to competition. By convention, in the original model the relative market share starts at zero on the right end of the scale and moves to 1 on the left. Again, by convention, businesses in the upper left quadrant are called “stars”. In the lower left, they are “cash cows”. In the upper right, they are “question marks” and in the lower right “dogs”. Also a convention: each business is represented by a circle (size proportional to sales). The whole thing is sometimes called a “bubble chart”

In addition to giving a snapshot of the company’s holdings, the analysis also lends itself to looking at cash flow prospects, and the potential need to borrow money or divest assets in order to provide the necessary cash to operate or expand the businesses.

5.          Businesses in which quadrant would be the most demanding in terms of their cash needs, and why? Businesses in which quadrant would provide the most cash for the corporation to use, and why?

6. In a Chapter Eleven bankruptcy, the business is protected from its creditors while a bankruptcy master appointed by a court works with wide latitude on a reorganization          plan. Why would the government want to protect the business from creditors and try to have it emerge from bankruptcy in an altered form rather than just letting it go under and stop operating?

Answer 1

Businesses in which quadrant would be the most demanding in terms of their cash needs, and why?

Answer= Dog is the product quadrant that consumes a lot of cash after years of a declining market. The company keeps on investing in this product with the hope of reviving the product but with the low market potential and low market share, it results in cash consumption with no real output

Businesses in which quadrant would provide the most cash for the corporation to use, and why?

Answer-Star is the product quadrant that facilitates the maximum amount of cash flow to the company as it has a high market share in the high potential market resulting in a lot of revenue generation

Why would the government want to protect the business from creditors and try to have it emerge from bankruptcy in an altered form rather than just letting it go under and stop operating?

Answer= The business organizations are the backbone of the country's economic position. The private organization releases the burden on the shoulders of the government to facilitate employment to the citizens and they also facilitate the taxes and other duties to the government. Therefore a company with the good financial conditions is a cash cow for the country. If the country does not support the private organization to overcome the bankruptcy and let it die, it will create the problem of rehabilitation and employment opportunities to the employees working in that organization. At the same time, a single company also facilitates indirect employment to thousands of workers. They will also be unemployed.

Apart from this, failing the company will spread a negative sentiment among the investors and they will afraid of investing in the economy thus the government always tries to revive the company by facilitating the funds rather than simply letting it die.