54. A manager is using the BCG matrix to plan strategy for the company’s product lines. One product has high market share in a slow-growth industry.
Answer: C
A Cash cow
In the BCG matrix, a product that has a high market share in a slow-growth industry is classified as a Cash cow. This designation indicates that the product generates significant revenue with relatively low investment, allowing the company to use these funds to support other ventures.
A) Question mark
A Question mark in the BCG matrix refers to a product with low market share in a high-growth industry. Since the scenario describes a product with high market share in a slow-growth industry, this option does not apply.
B) Star
A Star represents a product with both high market share and high growth potential. Given that the industry in question is characterized by slow growth, this option does not accurately describe the product’s situation.
C) Cash cow
A Cash cow is defined by having a high market share in a slow-growth industry, making it the correct classification for the product in question. This type of product typically yields high profits that can be reinvested elsewhere in the company.
D) Dog
A Dog represents a product with low market share in a low-growth industry. Since the product in question has a high market share, this classification is incorrect and does not reflect its potential profitability.
Conclusion
The classification of the product as a Cash cow is appropriate due to its high market share in a slow-growth industry, indicating it is a strong revenue generator with low investment needs. Other options fail to align with the defining characteristics of the product, leading to an accurate understanding of its market position and strategic importance.