All of the following are limitations (or downsides)of the BCG (Boston Consulting Group)matrix EXCEPT:
A) Every business cannot be accurately measured and compared on the two dimensions.
B) It takes a dynamic view of competition which can lead to overly complex analyses.
C) It views each business as a stand-alone entity and ignores the potential for synergies across businesses.
D) While easy to comprehend, the BCG matrix can lead to some troublesome and overly simplistic prescriptions.

Question

Quizplus · Accepted Answer

There are some notable downsides to portfolio models. They compare SBUs on only two dimensions, making the erroneous assumption that those are the only factors that really matter and that every unit can be accurately compared on that basis. The approach views each SBU as a stand-alone entity, ignoring the promise for synergies across business units. The process can become mechanical, substituting an oversimplified graphical model for the important contributions of management judgment. Reliance on strict rules regarding resource allocation across SBUs can be detrimental to long-term viability for the firm. While easy to comprehend, the imagery of the BCG matrix can lead to some troublesome, overly simplistic prescriptions.

All of the Following Are Limitations (Or Downsides)of the BCG