Which of the following statements is true in the context of the BCG growth-share matrix?
A) Stars often need heavy investment to finance their rapid growth in a market.
B) The positions of SBUs in the growth-share matrix rarely change over time.
C) The income from one SBU cannot be used to support other business units.
D) Dogs promise to be large sources of cash.
E) Cash cows typically turn into stars.

Question

Quizplus · Accepted Answer

The BCG growth-share matrix suggests that stars are in high-growth markets and require heavy investment to maintain their growth. Therefore, statement A is true. Statement B is incorrect because the positions of SBUs in the matrix can change over time due to changes in market growth and relative market share. Statement C is incorrect because income from one SBU can be used to support other business units. Statement D is incorrect because dogs do not generate much cash and are often divested. Statement E is incorrect because cash cows are in low-growth markets and do not have the potential to become stars.

Which of the Following Statements Is True in the Context