The Boston Consulting Group's Business Portfolio Analysis Model Can Be

question 314

Essay

The Boston Consulting Group's business portfolio analysis model can be used to analyze a firm's strategic business units. How is it used and what can it tell you?

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Definitions:

Break-Even Point

The point at which total costs equal total revenue, meaning the business does not make a profit or loss.

Degree of Operating Leverage

A financial metric that measures the sensitivity of a company's operating income to its sales, indicating the proportion of fixed to variable costs.

Variable Expenses

Expenses that vary directly with the level of production or sales volume, such as raw materials and direct labor.

Fixed Expenses

Costs that remain constant over a specified period regardless of changes in the level of activity or volume of production.