Rothan Corp. is evaluating the purchase of a small firm, Lemm Inc., which manufactures products involving advanced technology. These products are expected to revolutionize the home construction industry. Lemm has only a minor share of this growing market, but the market is expected to grow rapidly. Substantial investment will be required. In the BCG matrix, Lemm Inc. would be placed in the ________ category.
A) cash cows
B) stars
C) spinoffs
D) question marks
E) dogs

Question

Quizplus · Accepted Answer

Lemm Inc. is a small firm with a minor share of a growing market, which requires substantial investment. Therefore, it would be placed in the "question marks" category of the BCG matrix. This category represents businesses with a low market share in a high-growth market, requiring significant investment to grow and potentially become stars or cash cows in the future.