Practice Flashcards
A healthy portfolio has ___ funding ___ and promising ___
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All Flashcards in Topic 6.4
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6.4.125 cards
A healthy portfolio has ___ funding ___ and promising ___
Cash cows funding stars and promising question marks.
Cows fund stars + ?s
Three limitations of the BCG matrix?
Only two measures; assumes high share = high profit; hard to measure accurately; static; dogs may still be valuable.
Two measures + assumption + static
BCG: Stars = invest. Cash Cows = milk. Question Marks = ___. Dogs = ___
Decide (invest or divest). Divest/discontinue.
Decide; divest
Stars = ___ share + ___ growth. Strategy?
High share + high growth. Invest to maintain position — future cash cows.
High+high → invest
What is the BCG matrix?
A 2×2 grid classifying products by market share (high/low) and market growth (high/low) — manages the product portfolio.
Share vs growth grid
BCG assumes high market share = high profitability. Why isn't this always true?
A business could have high share through heavy spending — share doesn't guarantee margins.
Share ≠ profit
Too many dogs means the business needs to ___
Innovate — it has too many declining products and no growth prospects.
Innovate
Healthy portfolio: cash cows funding ___
Stars and promising question marks.
Stars + ?s
Cash Cows = ___ share + ___ growth. Strategy?
High share + low growth. Milk them — use profits to fund Stars and Question Marks.
High+low → milk
BCG helps answer which two questions?
Which products should we invest in? Which should we drop?
Invest or drop?
Dogs may still be valuable because ___
They serve a niche market or complete the brand range — strategic reasons to keep them.
Niche + brand completeness
BCG axes: x-axis = ___, y-axis = ___
Market share (high/low). Market growth (high/low).
Share (x), growth (y)
Question Marks = ___ share + ___ growth. Strategy?
Low share + high growth. Invest selectively or divest — uncertain potential.
Low+high → decide
No stars means ___
No future growth products — the business faces long-term decline.
No future growth
Limitations: only two measures, static, ignores ___
Profitability and brand strength.
Profitability
BCG is a ___ snapshot — products move between quadrants over ___
Static; time — today's star could become tomorrow's cash cow or dog.
Static + time
Name the four BCG quadrants
Stars, Cash Cows, Question Marks, Dogs.
Stars, Cows, ?s, Dogs
Hotel chain BCG example: luxury suites = ___
Star (high share, growing market). Standard rooms = Cash Cow. Budget range = Question Mark.
Star, Cow, ?
Use alongside ___ and ___
SWOT and product life cycle analysis.
SWOT + PLC
Dogs = ___ share + ___ growth. Strategy?
Low share + low growth. Divest or discontinue — unless they serve a niche.
Low+low → divest
BCG helps prioritise where to ___ and where to ___
Invest; cut — directing resources to the most promising products.
Invest vs cut
Stars need heavy investment because ___
The market is growing fast — competitors are fighting for share and you must invest to stay ahead.
Fast growth = invest to compete
BCG ignores ___, ___ and brand strength
Profitability; brand strength — only looks at share and growth.
Profit + brand
BCG manages the business's ___
Product portfolio — the full range of products it sells.
Product portfolio
Quick: High share + high growth = ___
Star.
Star
6.4.220 cards
How to draw a BCG matrix (5 steps)?
2×2 grid, x-axis = share (high LEFT), y-axis = growth (high TOP), label quadrants, place products using data.
Grid → axes → labels → plot
BCG construction questions are typically worth ___ marks
4 marks: 2 for correctly labelled matrix, 1 per product correctly classified.
4 marks
Star products → recommend ___
Continued investment and marketing support to maintain/grow position.
Invest + support
Draw 2×2, share (x), growth (y), label ___ quadrants
Four: Stars (top-left), Question Marks (top-right), Cash Cows (bottom-left), Dogs (bottom-right).
4 quadrants
Common BCG mistake: getting the ___ wrong
Axes — market share is horizontal, growth is vertical. High share is on the LEFT.
Share horizontal, growth vertical
High share = LEFT. High growth = ___
TOP.
Top
[2 marks] for correctly labelled matrix means ___
Axes labelled (share, growth) and all four quadrants named (Stars, ?, Cows, Dogs).
Axes + quadrant names
Cash cows → recommend ___
Maintain current approach, use profits to fund growth elsewhere.
Maintain + fund growth
Use case study data to ___ classification
Justify — explain why each product belongs in its quadrant.
Justify
You MUST use case study data to ___
Justify your classification — don't just guess where products go.
Justify with data
Question marks → recommend ___
Careful evaluation — invest if potential is high, divest if not.
Evaluate + decide
High market share goes on the ___ side
Left — not the right! This is a common exam error.
Left
High market growth goes on the ___
Top — high growth above, low growth below.
Top
Each product placed correctly = ___ mark
1 mark each — based on case study evidence.
1 mark
Use BCG to support strategic ___
Recommendations — which products to invest in, maintain, or drop.
Recommendations
Dogs → recommend ___
Discontinue or reposition — unless there's a strategic niche reason to keep them.
Discontinue unless niche
Quick: Low share + high growth = ___
Question Mark.
Question Mark
In 10-mark questions, use BCG to support ___
Your recommendation — 'Product X is a Star and should receive priority investment...'
Recommendation support
Missing quadrant labels = ___
Lost marks — always label Stars, Cash Cows, Question Marks, Dogs.
Lost marks
Place products based on ___ data and justify ___
Case study; your classification — explain WHY each product belongs there.
Data + justify
Topic 6.4 study notes
Full notes & explanations for Boston Consulting Group (BCG) matrix
BM exam skills
Paper structures, command terms & tips
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