On what assumption is the BCG Portfolio Model based?
A) Profitability and cash flow will be closely related to sales volume.
B) Return on investment (ROI) will be directly related to sales volume.
C) Cash flow is equal to investment.
D) Investment + Cash flow = Profitability.

Question

Quizplus · Accepted Answer

The BCG Portfolio Model is based on the assumption that profitability and cash flow will be closely related to sales volume. This is because as sales volume increases, so does the potential for profit and cash flow. The model uses market growth rate and market share to categorize a company's products or services into four categories: stars, cash cows, question marks, and dogs. The model helps companies analyze their portfolio of products or services and make strategic decisions about how to allocate resources.

On What Assumption Is the BCG Portfolio Model Based