One of the Weaknesses Inherent in the Use of the BCG

question 149

Multiple Choice

One of the weaknesses inherent in the use of the BCG business portfolio analysis is that it

• A)causes dissension between different divisions when one is labeled a "star" and another a "dog."
• B)reduces employee motivation to move a low valued SBU to a higher one.
• C)considers too many SBU factors beyond market growth rate and relative market share.
• D)does not require sales forecasts in order to be implemented.
• E)is often difficult to obtain the needed information to correctly place SBUs in the matrix.

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Definitions:

Comprehensive Income

A measure of all changes in equity of a company that result from recognized transactions and other economic events of the period other than those resulting from investments by and distributions to owners.

Retained Earnings

Profits that a company keeps or retains after paying dividends to shareholders, which are often reinvested in the business or used to pay down debt.

Accumulated Other Comprehensive Income

The cumulative effects of other comprehensive income items reported separately in the Stockholders’ Equity section of the balance sheet.

Long-Term Investments

Assets intended to be held for more than one fiscal year, including bonds, stocks, or real estate, aiming for future returns.