When Cabot Corporation used the BCG matrix to evaluate its carbon black manufacturing business,the model led them to move away from ________ and to diversify into unrelated businesses listed as stars by the model.This resulted in a decline on return on assets.They eventually returned to carbon black manufacturing and divested the unrelated businesses; their 2016 revenue was 2.4 billion USD.
A) the dog quadrant
B) its core market
C) the question mark quadrant
D) semiconductor manufacturing

Question

Quizplus · Accepted Answer

Cabot Corporation supplies carbon black for the rubber, electronics, and plastics industries. Following the BCG matrix, Cabot moved away from its cash cow, carbon black, and diversified into stars such as ceramics and semiconductors in a seemingly overaggressive effort to create more revenue growth for the corporation. Predictably, the Cabot return on assets declined as the firm shifted away from its core competence to unrelated areas. The portfolio model failed by pointing the company in the wrong direction in an effort to spur growth, away from its core business. Recognizing its mistake, Cabot Corporation returned to its mainstay carbon black manufacturing and divested unrelated businesses. Today the company is a leader in its field with 2.4 billion USD in revenues in 2016.

When Cabot Corporation Used the BCG Matrix to Evaluate Its