Which of the following is true of the BCG matrix approach?
A) It is inexpensive to implement.
B) It does not have any limitations.
C) It considers market growth rate to be a measure of market attractiveness.
D) It describes consumer motivations and needs.
E) It does not consider relative market share to be a measure of company strength in the market.

Question

Quizplus · Accepted Answer

The BCG (Boston Consulting Group) matrix approach is a strategic management tool used to assess a company's product portfolio. It categorizes a company's products into four categories based on their market growth rate and relative market share. The four categories are stars, cash cows, question marks, and dogs.
Option A is incorrect because implementing the BCG matrix approach requires significant effort and analysis, which may not necessarily be inexpensive.
Option B is incorrect because every strategic management tool has limitations, and the BCG matrix approach is no exception.
Option C is correct because market growth rate is a key determinant of market attractiveness in the BCG matrix approach. Products that operate in high-growth markets are considered more attractive than those in low-growth markets.
Option D is incorrect because the BCG matrix approach does not consider consumer motivations and needs.
Option E is incorrect because the BCG matrix approach considers relative market share to be a measure of a company's strength in the market. High market share indicates that the company is a market leader and has a competitive advantage over its rivals.

Which of the Following Is True of the BCG Matrix