CA Intermediate · Financial Management and Strategic Management · Strategic Choices
A listed Indian conglomerate has a division making consumer batteries. The division has a low relative market share in a market growing slowly, generates modest cash, and has no strong prospects. Under the BCG matrix, which classification and generic recommendation fits?
The division is a Dog and should usually be divested or harvested. It has low relative market share in a slow-growing market, so it neither generates substantial cash nor has strong growth prospects. A question mark would sit in a high-growth market, which is not the case.
- ADog; divest or harvestCorrect
- BQuestion mark; invest heavily to build share
- CCash cow; milk for cash
- DStar; invest to sustain growth
Explanation
Low relative market share combined with low market growth defines a Dog. The usual recommendation is to divest, liquidate or harvest it. A question mark has low share but in a high-growth market, so heavy investment is not suggested here.
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