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Real Goods Inc. is a large conglomerate. The company's beverages strategic business unit (SBU) has been recognized as a cash cow, and its tobacco SBU has been categorized as a dog. Which of the following can be inferred from this scenario?
While the market share of the company in the beverages industry will be high, the market share in the tobacco industry will be low

Respuesta :

Answer: C. While the market share of the company in the beverages industry will be high, the marketshare in the tobacco industry will be low.

Explanation:

The Boston Consulting Group (BCG) growth-share matrix is a planning tool where graphical representations of a company's products and services are analysed in an effort to make the company more efficient.

The products and services are places in 4 categories being four categories being "dogs," "cash cows," "stars," and “question marks.

As Cash Cows and Dogs are the relevant ones here we will look at them.

Cash Cows refer to Products the company has a relatively large market share in even if the products are in low-growth areas. Real Goods' beverages strategic business unit (SBU) has been recognized as a cash cow which means the market share here is high.

Dogs on the other hand are products for which the company has a relatively low market share and hence don't generate enough cash for the company. They should typically be sold or liquidated like Real Goods Tobacco division.

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