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CS Professional · Strategic Management and Corporate Finance · Managing the Multi-Business Firm and Analyzing Strategic Edge

A diversified Indian group finds that one of its subsidiaries has a low market share in a low-growth industry and generates little cash. In the BCG growth-share matrix, how is this business classified and what is the usual recommended strategy?

The business is a Dog in the BCG matrix, because it has low relative market share in a low-growth industry. The usual recommendation is divestment or liquidation, unless it has some strategic value that justifies retaining it.

  1. AStar; invest heavily to hold share
  2. BCash cow; harvest and milk for cash
  3. CQuestion mark; invest selectively or divest
  4. DDog; divest or liquidate unless it has strategic valueCorrect

Explanation

Low relative market share combined with low market growth places a business in the Dog quadrant. The usual advice is divestment or liquidation, or harvesting. A question mark has low share but high growth, which does not match this case.

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