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Which of the following is a part of the BCG matrix of a specific business (B) of a company in the industry corresponding to B (IB)?*Annual growth of the specific business B of the companyAnnual growth of the specific business B of the company 4Relative profitability of the company’s business (B) in the industry (IB) in which it operates.Relative Market Share of the company’s business (B) in the industry (IB) in which this business operates 2

Question

Which of the following is a part of the BCG matrix of a specific business (B) of a company in the industry corresponding to B (IB)?*Annual growth of the specific business B of the companyAnnual growth of the specific business B of the company 4Relative profitability of the company’s business (B) in the industry (IB) in which it operates.Relative Market Share of the company’s business (B) in the industry (IB) in which this business operates 2

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Solution

The BCG Matrix, also known as the Boston Consulting Group Matrix, is a strategic planning tool that was developed by the Boston Consulting Group. This matrix helps companies in planning their product portfolio and business strategy by categorizing their products into four categories: Stars, Cash Cows, Question Marks, and Dogs.

In the context of the BCG Matrix, the following parts are relevant to a specific business (B) of a company in the industry corresponding to B (IB):

  1. Annual growth of the specific business B of the company: This is relevant as it helps in identifying whether the product is a Star (high growth, high market share), Question Mark (high growth, low market share), Cash Cow (low growth, high market share), or a Dog (low growth, low market share).

  2. Relative Market Share of the company’s business (B) in the industry (IB) in which this business operates: This is a crucial part of the BCG Matrix. It helps in determining the company's market dominance. The higher the market share, the higher the cash returns.

  3. Relative profitability of the company’s business (B) in the industry (IB) in which it operates: While this is not a direct component of the BCG Matrix, it can provide valuable insights when analyzing the company's strategic position. High profitability can indicate a strong competitive advantage and potential for growth.

So, to answer your question, both the annual growth of the specific business B of the company and the relative market share of the company’s business (B) in the industry (IB) in which this business operates are parts of the BCG Matrix. The relative profitability, while important, is not a direct component of the BCG Matrix.

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