Question 1

When Stratasys began making 3D printers in 1988, the future of this new invention was unknown but expected to grow. Stratasys was one of a handful of producers of these printers. According to the BCG matrix, Stratasys was a ________.

Accepted Answer

According to the BCG matrix, a question mark represents a business unit with low market share in a high-growth market. Since the future of 3D printing was uncertain and expected to grow when Stratasys began making printers, it can be categorized as a question mark.

Question 2

In the BCG matrix, a ________ has a low anticipated growth rate and a low market share.

Accepted Answer

According to the BCG matrix, a product with a low anticipated growth rate and a low market share is categorized as a "dog."

Question 3

Diversification is an example of a corporate retrenchment strategy.

Accepted Answer

Diversification is actually a form of corporate growth strategy, not retrenchment. Retrenchment strategies focus on reducing a firm's size or scope of operations, often through downsizing or divestitures.

Question 4

When a totally new product, such as laser discs years ago, is introduced, it would be considered a ________ according to the BCG matrix.

Accepted Answer

A totally new product would be considered a question mark because it has high market growth potential but low market share, which means it may require significant investment to grow and become a star or cash cow.

Question 5

In the BCG matrix, a business unit that has a high anticipated growth rate but a low market share is known as a ________.

Accepted Answer

A business unit that has a high anticipated growth rate but a low market share is known as a question mark in the BCG matrix. This type of business unit requires further analysis to determine whether it has the potential to become a star or should be divested as a dog.

Question 6

If Burger King were to buy out Mom and Pop's Burgers, Burger King would be growing by vertical integration.

Accepted Answer

This scenario describes horizontal integration, where a company acquires or merges with a competitor in the same industry, increasing its market share. Vertical integration involves acquiring a company that operates in the supply chain of the acquiring company's industry.

Question 7

Which one of the following provides a framework for understanding diverse businesses and helps managers establish priorities for allocating resources?

Accepted Answer

A corporate portfolio matrix provides a framework for understanding diverse businesses and helps managers establish priorities for allocating resources. The matrix categorizes businesses based on their market share and market growth rate, which helps managers identify which businesses to invest in, maintain, or divest. A differentiation matrix is a tool used to evaluate the competitive advantage of a company's products or services. A competitive strategy is a plan that outlines how a company will compete in the market. A business unit matrix is a tool used to assess the strategic position of different business units within a company.

Question 8

The tobacco market in the United States has stagnated but Altria has a 50% share of it. According to the BCG Matrix, Altria is a ________.

Accepted Answer

Altria's 50% share of a stagnant tobacco market indicates that it is a cash cow, meaning it has a high market share in a low-growth market, generating significant amounts of cash with minimal investment.

Question 9

Managers should "milk" cash cows for as much as they can, limit any new investment in them, and use the large amounts of cash generated to invest in ________ and ________.

Accepted Answer

According to the BCG Matrix, a cash cow is a product/brand that has a high market share in a low-growth market. Therefore, it is suggested to use the generated cash to invest in products with high growth potential, which are the stars, and in the question marks, which are products with potential but uncertain success, to turn them into stars. Dogs, on the other hand, have low market share in a low-growth market and are generally recommended to be phased out or divested.

Question 10

________ should be sold off or liquidated as they have low market share and low growth potential.

Accepted Answer

Dogs have low market share and low growth potential, so it would be best to sell them off or liquidate them. Cash cows still bring in a steady amount of income and stars and question marks have higher growth potential, so they may be worth investing in.

Question 11

AI Rubber is one of four suppliers of molded rubber products and has a 45% market share. The market for its products is shrinking. AI Rubber is part of a larger corporation that includes a total of seven different companies. In the BCG matrix, AI Rubber would be considered a ________.

Accepted Answer

AI Rubber, with a high market share (45%) in a shrinking market, fits the description of a cash cow in the BCG matrix. Cash cows are units with high market share in a slow-growing industry, generating steady cash flow.

Question 12

Corporate strategies determine what business a company is in or wants to be in, and what it wants to do with those businesses.

Accepted Answer

Corporate strategies define a company's scope and direction, including the businesses it operates in and how it plans to develop and manage those businesses.

Question 13

As smartphone cameras improved, consumers turned away from traditional cameras. Polaroid lost market share and finally realized their product was no longer desired. At that point, Polaroid would be considered a ________ in the BCG matrix.

Accepted Answer

According to the BCG matrix, a "dog" refers to a product with low market share in a low-growth market. Polaroid's declining market share in the camera industry suggests that it is no longer in high demand, indicating that it has become a "dog."

Question 14

During the Great Recession, Malcolm's Racing Bikes lost a considerable amount of its business because customers could no longer afford the expensive models in his shop. He was very near bankruptcy. Malcolm began carrying a line of less expensive bikes to appeal to recreational bicyclists and families and also opened a repair service. Malcolm used a ________ strategy.

Accepted Answer

Malcolm used a turnaround strategy, which is a type of strategic change that involves making significant changes to a company's operations in order to improve its financial performance. In this case, Malcolm's Racing Bikes was facing a serious decline in sales due to the economic recession, and as a result, Malcolm had to shift his focus to a different segment of the market by offering less expensive bikes and repair services to attract recreational bicyclists and families. By doing so, he was able to turn the company around and avoid bankruptcy.

Question 15

A ________ strategy is used to deal with minor performance problems. It helps an organization stabilize operations, revitalize organizational resources and capabilities, and prepare to compete once again.

Accepted Answer

The answer of A ________ strategy is used to deal...

Question 16

In the Boston Consulting Group (BCG) matrix, a business unit that has a low anticipated growth rate but a high market share is known as a ________.

Accepted Answer

A business unit that has a low anticipated growth rate but a high market share is known as a cash cow in the BCG matrix. Cash cows are mature, established products or businesses that generate substantial profits with little investment needed for their continued success.

Question 17

Heavy investment in ________ will help take advantage of the market's growth and help maintain high market share.

Accepted Answer

Stars are products with high market growth and high market share, so investing heavily in them is the best strategy to maintain the market share and take advantage of the market growth.

Question 18

In the BCG matrix, a ________ enjoys a high anticipated growth rate and a high market share.

Accepted Answer

In the BCG matrix, a star represents a business unit or product that has a high anticipated growth rate and a high market share. This means that it has the potential to generate a lot of revenue and profits due to its strong market position and expected growth in the market. Stars typically require a significant amount of investment to maintain and grow their market share, but they have the potential to become cash cows in the future if they continue to grow and dominate their market.

Question 19

When a firm integrates backward, it becomes its own distributor.

Accepted Answer

Backward integration means a company acquires or merges with companies behind its supply chain, such as suppliers of raw materials, not distributors which would be forward integration.

Question 20

________ strategies address declining performance through retrenchment and turnaround strategies.

Accepted Answer

Renewal strategies are employed when an organization is facing declining performance. Retrenchment and turnaround strategies are two types of renewal strategies that are used to address declining performance.

Quiz 9: Strategic Planning