Question 1

Gillette continues to manufacture Liquid Paper correction fluid for use with typewriters even though most of the world uses word processors. It is a small market that has little growth, but Liquid Paper has the largest market share, and Gillette invests no promotional monies in maintaining the declining product. Liquid Paper is an example of a:

Accepted Answer

Liquid Paper correction fluid is a well-established product with a large market share, but the market is declining due to the shift towards word processors. Gillette invests no promotional monies in maintaining the product. These characteristics make Liquid Paper a "cash cow" - a product with a high relative market share in a low-growth market.

Question 2

The market for energy efficient cars is increasing, despite the price-tag often associated with these newer models. The GM Volt, an electric call, falls in this category. The car is considered to GM a:

Accepted Answer

The GM Volt, being an electric car in a growing market for energy-efficient vehicles, represents a product with high market growth but uncertain market share, fitting the description of a "question mark" in the BCG matrix. This category is used for products that require significant investment to increase their market share.

Question 3

Solarcom is a 25-year-old information technology company that owns several subsidiaries. One of its subsidiaries is Atlantix Global Systems, which is one of the leading wholesalers for refurbished computer equipment, an industry that is growing worldwide. According to the BCG portfolio matrix, Atlantix Global would most likely be classified as a:

Accepted Answer

According to the BCG portfolio matrix, a star represents a business unit with high market share in a high-growth market. Refurbished computer equipment is a growing industry and Atlantix Global Systems is one of the leading wholesalers in this field, indicating a high market share. Therefore, Atlantix Global Systems would most likely be classified as a star.

Question 4

One of the strengths inherent in the use of the BCG portfolio analysis is the fact that it:

Accepted Answer

The BCG portfolio analysis forces firms to assess their SBUs in terms of relative market share and industry growth rate, providing a clear framework for decision making and resource allocation. This can help organizations prioritize investments and divestments based on the potential for growth and profitability.

Question 5

Several years ago, Black & Decker purchased General Electric's small appliances product line. General Electric did not know what to do with the line. Black & Decker purchased the line because it needed the cash infusion from a product line that had a dominant market share. Since people replace small appliances infrequently and
Because many are handed down from parent to child, the industry is a slow-growth
One) From this information and your knowledge about the BCG portfolio analysis, you should know this small appliance line would be classified as a:

Accepted Answer

The small appliance line is described as having a dominant market share and providing a cash infusion to Black & Decker. This indicates that it is a cash cow, which is a product in a mature market with a high market share and low growth rate, providing steady cash flow.

Question 6

In late 1993, the Honda Motor Company unveiled the Honda Passport, announcing their entrance into the sport-utility vehicle market. Competing automakers-General Motors, Ford, and Jeep had vehicles firmly entrenched in this highly competitive market. For years Honda experienced tremendous success with their Accords,
Preludes, Civics, and other passenger automobiles-in fact, Honda cars were repeatedly the top selling automobiles in the U.S. Where would the Honda Passport and the
Honda Accords, Preludes, and Civics fall in the BCG product portfolio matrix?

Accepted Answer

The Honda Passport, being a new entrant into a highly competitive market, would be considered a problem child or question mark because its success was uncertain. The Accords, Preludes, and Civics, with their established market presence and sales success, would be considered cash cows, generating consistent revenue for Honda.

Question 7

In some cases Walmart can sell Blu-Ray movies to consumers for less than it costs a consumer to rent Blu-Rays from RedBox, a vending machine-based rental unit in many grocery stores. In response, RedBox now allows consumers to keep their Blu-Rays longer and is pushing the sales of Blu-Rays instead of just rentals. RedBox is looking at their:

Accepted Answer

RedBox is responding to the competition from Walmart who is able to sell Blu-Ray movies for less than renting from RedBox. RedBox is adjusting their strategy to remain competitive, indicating they are looking at their competition.

Question 8

The market for the fast car with so much horsepower that handling becomes an issue is decreasing. People are more interested in buying SUVs and pickups. As a result, General Motors is stopping production of its Camaro, a car that has had limited sales recently. Since the Camaro can no longer generate enough cash to sustain its
Manufacture, the BCG portfolio would classify it as a:

Accepted Answer

The Camaro is no longer generating enough cash to sustain its manufacture, which means it is not a cash cow. It has also had limited sales recently and the market for its type of car is decreasing, which means it is not a star or a question mark. Therefore, the best choice is C, a dog, which is a product with low market share and growth potential.

Question 9

The market for mobile phones can change very rapidly. If Apple uses a BCG portfolio analysis for their new iPhone, one downfall of using this tool may be that:

Accepted Answer

The downfall of using a BCG portfolio analysis for a rapidly changing market like the mobile phone market is that by the time decisions are made based on the tool, market conditions may have already changed. This could potentially make the analysis outdated and ineffective in predicting future success. Choices A and D are incorrect because a BCG analysis is not designed to be a motivational tool and it does not necessarily require forecasts to be implemented. Choice B is incorrect because a BCG analysis only considers market growth rate and relative market share.

Question 10

Kraft Foods decides to sell their Mac 'N Cheese product to India, without changing the product formulation or design. Kraft is following which strategy?

Accepted Answer

Market development involves selling existing products in new markets. In this case, Kraft is selling an existing product (Mac 'N Cheese) in a new market (India) without changing the product formulation or design.

Question 11

Assume McDonald's is engaging in a market development strategy. Which of the following actions best illustrates a market development strategy?

Accepted Answer

Market development strategy involves expanding the target market by entering into new markets with existing products. Opening the first McDonald's in China is a clear example of market development strategy as it involves entering a new market with existing products. Options A, B, and D are examples of product development strategy that involve introducing new products or product features to the existing market.

Question 12

In the Boston Consulting Group (BCG)model for analysis of a firm's strategic business units, or SBUs, the horizontal axis reflects the:

Accepted Answer

In the BCG model, the horizontal axis reflects the relative market share of the SBUs. This is typically measured in terms of the SBU's market share compared to its largest competitor. The vertical axis reflects the market growth rate of the industry in which the SBU operates. Together, these axes are used to categorize the SBUs into four categories: Stars, Cash Cows, Question Marks, and Dogs. Therefore, the correct answer is option C, relative market share.

Question 13

When a firm decides to double their marketing budget for a product that sells consistently, they are using which strategy:

Accepted Answer

Market development involves increasing sales by entering new markets, while market penetration involves increasing sales in existing markets. If the firm is already selling consistently in their current market, then choosing to double the marketing budget would be a strategy to increase sales through market development in new markets while also utilizing market penetration to increase sales in existing markets. Therefore, the best choice is C, market development and market penetration.

Question 14

At an executive-level meeting, the Chief Marketing Officer (CMO)tells the Production Manager: "even if we double our marketing budget, there is no way it will sell! If we continue this way we will go bankrupt!" The CMO is likely referring to an SBU classified as a(n):

Accepted Answer

Dogs in the BCG matrix refer to units with low market share in a mature, slow-growing industry. These are typically considered drains on resources without the potential for either high returns or growth, aligning with the CMO's concern about the inability to sell the product even with increased marketing efforts.

Question 15

All of the following are strategies to pursue after an SBU has been identified, except:

Accepted Answer

"Expand" is not a standard term used to describe a strategy for a strategic business unit (SBU) after it has been identified. The common strategies include "build" (invest more to increase market share), "divest" (sell off or shut down), and "harvest" (reduce investment to maximize short-term cash flow).

Question 16

Yorkdale Mall hopes to increase traffic in the shopping center by offering free lunches to children in mall restaurants on Tuesdays. This promotion is directed to families who currently do not shop at the mall. This is an example of the implementation of a ________ strategy.

Accepted Answer

This is an example of a market development strategy as Yorkdale Mall is targeting families who do not currently shop at the mall in order to increase traffic and sales. The promotion is not aimed at increasing sales of existing products (market penetration), introducing new products (product development), or expanding into new markets/industries (diversification).

Question 17

Massachusetts-based BJ's Wholesale (third in sales among members-only retail chains)recently opened its first stores in Georgia in 2012. This is an example of:

Accepted Answer

Market development involves expanding the market for existing products or services by entering new geographic areas. Opening stores in a new state like Georgia is an example of market development.

Question 18

When Gulfstream Aerospace Corp. (GAC)sold 3 Gulfstream V business jet aircraft to the Israeli Ministry of Defense for use as Special Electronic Mission Aircraft, the first sale to a Middle Eastern country, GAC followed which strategy?

Accepted Answer

Market development strategy involves expanding into new markets or segments. By selling the Gulfstream V business jet aircraft to the Israeli Ministry of Defense, Gulfstream Aerospace Corp. was entering a new market (a new country/region) with its existing product, which aligns with the market development strategy.

Question 19

One of the weaknesses inherent in the use of the BCG portfolio analysis is that it:

Accepted Answer

The BCG portfolio analysis heavily relies on accurate and up-to-date information on market growth and market share. However, it is often difficult and costly to obtain this information, especially for small or niche markets. This weakness can affect the accuracy of the analysis and the resulting strategic decisions. The other options (A, B, and D) are not weaknesses but rather potential strengths of the BCG portfolio analysis.

Question 20

Apple's new watch is the most recent additional to their personal technology line, and requires an iPhone to fully function. According to the BCG portfolio analysis, Apple Watches are ________ and iPhones are _________.

Accepted Answer

The answer of Apple's new watch is the most recent...

Quiz 2: Developing Successful Marketing Strategies

The market for energy efficient cars is increasing, despite the price-tag often associated with these newer models. The GM Volt, an electric call, falls in this category. The car is considered to GM a:

One of the strengths inherent in the use of the BCG portfolio analysis is the fact that it:

The market for mobile phones can change very rapidly. If Apple uses a BCG portfolio analysis for their new iPhone, one downfall of using this tool may be that:

Kraft Foods decides to sell their Mac 'N Cheese product to India, without changing the product formulation or design. Kraft is following which strategy?

Assume McDonald's is engaging in a market development strategy. Which of the following actions best illustrates a market development strategy?

In the Boston Consulting Group (BCG) model for analysis of a firm's strategic business units, or SBUs, the horizontal axis reflects the:

When a firm decides to double their marketing budget for a product that sells consistently, they are using which strategy:

At an executive-level meeting, the Chief Marketing Officer (CMO) tells the Production Manager: "even if we double our marketing budget, there is no way it will sell! If we continue this way we will go bankrupt!" The CMO is likely referring to an SBU classified as a(n) :

All of the following are strategies to pursue after an SBU has been identified, except:

Yorkdale Mall hopes to increase traffic in the shopping center by offering free lunches to children in mall restaurants on Tuesdays. This promotion is directed to families who currently do not shop at the mall. This is an example of the implementation of a ________ strategy.

Massachusetts-based BJ's Wholesale (third in sales among members-only retail chains) recently opened its first stores in Georgia in 2012. This is an example of:

When Gulfstream Aerospace Corp. (GAC) sold 3 Gulfstream V business jet aircraft to the Israeli Ministry of Defense for use as Special Electronic Mission Aircraft, the first sale to a Middle Eastern country, GAC followed which strategy?

One of the weaknesses inherent in the use of the BCG portfolio analysis is that it:

Apple's new watch is the most recent additional to their personal technology line, and requires an iPhone to fully function. According to the BCG portfolio analysis, Apple Watches are and iPhones are _.