A major limitation of the BCG matrix in guiding corporate strategy is:
A)The assumption that each business has synergistic links with every other business within the portfolio
B)Business' market shares and growth rates are difficult to measure
C)Neither market growth nor relative market share are reliable indicators of a businesses' future profitability
D)Its long history renders it obsolete.

Question

Quizplus · Accepted Answer

The BCG matrix assumes that a business's market growth and relative market share are indicators of its future profitability. However, this is not always the case, as other factors such as industry competition and changes in consumer preferences can significantly impact a business's profitability. Therefore, relying solely on the BCG matrix to guide corporate strategy can be limiting.

A Major Limitation of the BCG Matrix in Guiding Corporate