The BCG Matrix Approach Is Problematic in That It ________

question 97

Multiple Choice

The BCG matrix approach is problematic in that it ________.

• A) focuses on planning for the future at the cost of ignoring the present
• B) focuses solely on current businesses and provides little scope for future planning
• C) tends to undermine the importance of market growth rate as a measure of market attractiveness
• D) tends to undermine the importance of relative market share as a measure of company strength in the market
• E) fails to classify SBUs

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Definitions:

Long Run

A period in economics during which all factors of production and costs are variable, allowing for full adjustment to change, such as new technology or market conditions.

Profit

The financial gain obtained when the revenues generated from business activities exceed the expenses, costs, and taxes involved in sustaining the activities.

Loss

An economic condition where expenses exceed revenues, indicating negative financial performance.

Profit-Maximizing

A strategy or process by which a firm determines the price and output level that returns the greatest profit.