Using the Boston Consulting Group matrix,SBUs are classified on the basis of
A) market share and market growth rate.
B) market share and cash generation potential.
C) market growth rate and financial strength.
D) financial strength and product life cycle.
E) cash generation potential and product life cycle.

Question

Quizplus · Accepted Answer

The Boston Consulting Group matrix classifies SBUs on the basis of two factors: market share (relative to the largest competitor) and market growth rate (annual percentage change in market size). This helps to determine the relative market position of each SBU, and thus, the appropriate strategy to pursue.

Using the Boston Consulting Group Matrix,SBUs Are Classified on the Basis