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SBUs or products that have lost their position of leadership and are in the low-growth markets are known as:
Question

SBUs or products that have lost their position of leadership and are in the low-growth markets are known as:

A.

Star

B.

Problem Child

C.

Dog

D.

Cash cow

Correct option is C

Dogs are Strategic Business Units (SBUs) or products in the Boston Consulting Group (BCG) matrix that have a low market share in a low-growth market. These products or SBUs are often unprofitable or marginally profitable, and they no longer hold a leadership position. They typically consume resources without generating significant returns and may require divestment or discontinuation.

For example, a product that was once a market leader but failed to adapt to changing consumer preferences or technological advancements may fall into this category. Such products often struggle to compete and may not justify further investment.

In contrast, the other options describe SBUs in different quadrants of the BCG matrix, focusing on varying levels of market share and growth potential.

Information Booster:

Characteristics of Dogs in the BCG Matrix:

  1. Low Market Share: They have a minimal share in the market and struggle to compete effectively.
  2. Low Market Growth: Operating in stagnant or declining markets, making opportunities for growth limited.
  3. Limited Profitability: They contribute little to no profit and often drain resources.
  4. Exit Strategy: Companies often divest, discontinue, or reposition these products to avoid losses.
  5. Examples: Outdated technologies or declining product lines in mature markets.

Additional Knowledge:

(a) Star:
Stars are SBUs with a high market share in a high-growth market. They require significant investment to maintain their leadership position and capitalize on market growth. Over time, as market growth slows, they may transition into cash cows.

(b) Problem Child (or Question Mark):
Problem Children are SBUs with a low market share in a high-growth market. They represent potential opportunities but require substantial investment to increase their market share. If unsuccessful, they risk becoming dogs.

(d) Cash Cow:
Cash Cows are SBUs with a high market share in a low-growth market. They generate steady and significant cash flow, which can be used to fund stars or question marks. They are typically the most profitable quadrant in the BCG matrix.

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