CS Professional · Strategic Management and Corporate Finance · Managing the Multi-Business Firm and Analyzing Strategic Edge
Kaveri Foods Ltd has a business with a market share of 12% in an industry where the largest competitor holds 30%. Under the BCG matrix, what is its relative market share, and is it high or low (using the cut-off of 1.0)?
Relative market share is 12% divided by the largest competitor's 30%, giving 0.40. Since it is below the cut-off of 1.0, the share is classed as low in the BCG matrix.
- A2.5, high
- B0.40, lowCorrect
- C0.40, high
- D1.2, high
Explanation
Relative market share = own share / largest rival's share = 12/30 = 0.40. This is below 1.0, so it is low. The 2.5 option inverts the ratio, which is the wrong base.
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