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Assume your company has products named Delta and Gamma. Delta has high market share in a slowly growing market. Gamma has high market share in a quickly growing market. According to the BCG Matrix, what should your company do?

A. Invest in Delta, and sell of Gamma
B. Sell off both products
C. Leave Delta alone, and invest in Gamma
D. Sell off Delta and invest into Gamma

User Sjakelien
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1 Answer

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Final answer:

According to the BCG Matrix, Delta is a 'Cash Cow' and should be maintained without heavy investment, while Gamma is a 'Star' and should have resources allocated to invest in its rapid growth. The correct course of action is C: Leave Delta alone, and invest in Gamma.

Step-by-step explanation:

According to the BCG Matrix, a strategic tool used in business to assess the relative strength of a company's product portfolio, the recommendation for your products would be as follows:

For Delta, which has a high market share in a slowly growing market, it would be classified as a 'Cash Cow'. These are products that generate more cash than they consume and hence, it is often recommended to 'milk' these products without significant investment. Therefore, for Delta, the company should maintain but not heavily invest in the product.For Gamma, which has a high market share in a rapidly growing market, it would be seen as a 'Star'. These products have the potential to become market leaders and thus, significant investment is usually recommended to support rapid growth. Consequently, the company should allocate more resources to invest in Gamma.

Therefore, the correct answer to what your company should do is C: Leave Delta alone, and invest in Gamma. This strategy plays to the strengths of both products and optimizes resource allocation according to the BCG Matrix.

User ManuBriot
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