Which of the following statements is true of the BCG matrix?
A) It is used to guide the strategic alternatives that managers of individual businesses may use.
B) It focuses on increasing profits or the number of places in which a company does business.
C) It focuses on improving the way in which a company sells the same products to the same customers.
D) It is used to categorize a corporation's businesses by growth rate and relative market share.

Question

Quizplus · Accepted Answer

The BCG matrix is a tool used to categorize a corporation's businesses by their growth rate and relative market share. It helps managers identify which businesses to invest in, maintain, or divest. Option A is incorrect because the BCG matrix is used to guide corporate-level strategy, not the strategy of individual businesses. Option B is incorrect because the BCG matrix doesn't necessarily focus on increasing profits or the number of places a company does business - it's more about portfolio management. Option C is incorrect because the BCG matrix doesn't focus on improving the way a company sells products to customers, but rather on assessing the potential of different business units.

Which of the Following Statements Is True of the BCG