Scenario - Theresa Teutul
Theresa Teutul was an executive with Digital Industries, a leading manufacturer of color televisions. She recognized that the color television market in the late 1970's was facing significant challenges. After two decades of highly successful development and marketing, the sales of color televisions had slowed and replacing older color television sets largely created her market.
-The strategy that the BCG matrix suggests that Theresa should take for this SBU is:
A) invest and grow.
B) liquidate while still profitable.
C) ask her astrologer for advice.
D) keep the SBU healthy and use its excess earnings to invest in other SBU's.
E) divestiture.

Question

Scenario - Theresa Teutul 
Theresa Teutul was an executive with Digital Industries, a leading manufacturer of color televisions. She recognized that the color television market in the late 1970's was facing significant challenges. After two decades of highly successful development and marketing, the sales of color televisions had slowed and replacing older color television sets largely created her market.
-The strategy that the BCG matrix suggests that Theresa should take for this SBU is:
A) invest and grow.
B) liquidate while still profitable.
C) ask her astrologer for advice.
D) keep the SBU healthy and use its excess earnings to invest in other SBU's.
E) divestiture.

Quizplus · Accepted Answer

The BCG matrix suggests that for a "cash cow" SBU, which is characterized by low growth but high market share, the strategy should be to maintain its health and use its excess earnings to invest in other SBUs.