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CS Professional · Strategic Management and Corporate Finance · Strategic Analysis and Planning

A firm's Business A had sales of ₹60 crore, and its largest competitor's sales in the same market were ₹120 crore. Business B had sales of ₹90 crore against its largest competitor's ₹45 crore. Using BCG relative market share (own share divided by largest competitor's), which statement is correct?

Business A's relative market share is 0.5 (60 divided by 120) and Business B's is 2.0 (90 divided by 45). Since relative share above 1 shows leadership over the largest rival, B is stronger on this measure.

  1. AA has 0.5 and B has 2.0, so B is the stronger of the two on relative shareCorrect
  2. BA has 2.0 and B has 0.5, so A is stronger
  3. CBoth have 1.0 since both sell in a single market
  4. DA has 0.5 and B has 0.5 because each is compared to a rival

Explanation

Relative share A = 60/120 = 0.5. Relative share B = 90/45 = 2.0. A value above 1 means market leadership, so B is stronger. The option reversing the ratios divides the competitor by own sales, which is the wrong base.

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