Question 1

Unlike the BCG Matrix,the GE/McKinsey Grid benefits from a high level of objectivity.

Accepted Answer

The GE/McKinsey Grid, like the BCG Matrix, involves subjective judgments about market attractiveness and business unit strength, making it not purely objective.

Question 2

Relative market share is a strong indicator of competitive advantages in industries where size leads to cost advantages.

Accepted Answer

Relative market share is a measure of a firm's market share compared to its largest competitor. In industries where size leads to cost advantages, firms with a higher market share have a competitive advantage due to economies of scale and scope, which allow them to produce and distribute their products or services more efficiently and at a lower cost than smaller competitors. Therefore, relative market share is a strong indicator of competitive advantage in these industries.

Question 3

What is the main difference between the BCG Matrix and the GE/McKinsey Grid?&#10;A) The GE/McKinsey Grid uses a higher number of variables than the BCG Matrix.&#10;B) The BCG Matrix evaluates strategic business units, and the GE/McKinsey Grid does not.&#10;C) The GE/McKinsey Grid relies more heavily on market attractiveness than the BCG Matrix.&#10;D) The BCG Matrix generates more specific strategic guidelines than the GE/McKinsey Grid.

Accepted Answer

The main difference between the BCG Matrix and the GE/McKinsey Grid is that the GE/McKinsey Grid uses a higher number of variables than the BCG Matrix. While the BCG Matrix only considers market growth rate and relative market share, the GE/McKinsey Grid factors in multiple dimensions such as industry attractiveness, competitive position, and business strength to provide a more comprehensive analysis of portfolio performance.

Question 4

When using the GE/McKinsey Grid,the first step is to ________.&#10;A) define and weight business strength markers&#10;B) evaluate each product's market attractiveness&#10;C) define and weigh market attractiveness markers&#10;D) evaluate each SBU's business strength

Accepted Answer

The first step in using the GE/McKinsey Matrix involves defining and weighing the factors that determine market attractiveness. This sets the foundation for evaluating where different Strategic Business Units (SBUs) or products stand in terms of potential and priority.

Question 5

Based on the BCG matrix,which of the following is NOT necessarily a characteristic of a well-managed portfolio?&#10;A) products in each stage of the product life cycle&#10;B) business units in each quadrant&#10;C) balanced cash flow&#10;D) balanced risk

Accepted Answer

A well-managed portfolio according to the BCG matrix should have business units in each quadrant (B), balanced cash flow (C), and balanced risk (D). However, having products in each stage of the product life cycle (A) is not necessarily a characteristic of a well-managed portfolio in the context of the BCG matrix.

Question 6

In the BCG matrix,question marks are characterized by ________ market share and ________ market growth.&#10;A) low; low&#10;B) high; high&#10;C) high; low&#10;D) low; high

Accepted Answer

Question marks in the BCG matrix are characterized by low market share and high market growth, indicating products or business units with potential but requiring significant investment to increase market share.

Question 7

Stars in the BCG matrix are typically market leaders in low-growth markets.

Accepted Answer

Stars in the BCG matrix are typically market leaders in high-growth markets, not low-growth markets.

Question 8

The BCG matrix uses ________ as the only variable for determining attractiveness.&#10;A) market growth rate&#10;B) product awareness&#10;C) brand loyalty ratios&#10;D) market segment size

Accepted Answer

The BCG matrix uses market growth rate as the only variable for determining attractiveness. This is used to evaluate a company's product portfolio by categorizing products into four categories: stars, cash cows, question marks, and dogs. Market share is used as a secondary factor, but market growth rate is the primary determinant.

Question 9

Which of the following is a common marker of market attractiveness?&#10;A) marketing capabilities&#10;B) competitive intensity&#10;C) brand awareness&#10;D) market share

Accepted Answer

Competitive intensity, or the level of competition within a market, is a common marker of market attractiveness as it can impact factors such as pricing, profitability, and ease of entry for new entrants. While marketing capabilities, brand awareness, and market share are important factors to consider, they do not necessarily indicate market attractiveness on their own.

Question 10

Which of the following is a true statement about the BCG matrix?&#10;A) Cash cows require no investment.&#10;B) Dogs typically have fluctuating cash flow.&#10;C) Stars require only minimal investment.&#10;D) Question marks typically have negative cash flow.

Accepted Answer

Question marks typically have negative cash flow because they operate in high-growth markets but have low market share, requiring significant investment to increase their market share.

Question 11

Which of the following questions would LEAST likely be answered by the BCG matrix?&#10;A) How strong is the product in the market?&#10;B) How loyal are customers in the market?&#10;C) How strong is the SBU in the market?&#10;D) How attractive is the market?

Accepted Answer

The answer of Which of the following questions would LEAST...

Question 12

What are some of the limitations of the BCG matrix?

Accepted Answer

The answer of What are some of the limitations of...

Question 13

According to the text,the BCG matrix should be used to ________.&#10;A) formulate strategic decisions&#10;B) guide strategic discussions&#10;C) plan the marketing mix&#10;D) generate innovations

Accepted Answer

The answer of According to the text,the BCG matrix should...

Question 14

In the BCG matrix,cash cows are characterized by ________ market share and ________ market growth.&#10;A) low; low&#10;B) high; high&#10;C) high; low&#10;D) low; high

Accepted Answer

The answer of In the BCG matrix,cash cows are characterized...

Deck 32: Note : Products - Product Portfolios