Question

How is a growth-share matrix used in a large organization?

Answers
To monitor growth in each business line to develop a year-over-year comparison
To provide an overview of internal strengths and opportunities
To analyze the concept of systems thinking across the organization
To understand the competitive position and value of each sector of the business

Answer 1

The growth-share matrix is used in a large organization to understand the competitive position and value of each sector of the business. It categorizes business lines or products into four quadrants based on their market growth rate and relative market share. This helps in prioritizing investments, allocating resources, and developing strategies for growth and profitability.

Step-by-step explanation:

The growth-share matrix, also known as the Boston Consulting Group (BCG) matrix, is used in a large organization to understand the competitive position and value of each sector of the business. It helps categorize different business lines or products into four quadrants based on their market growth rate and relative market share:

• Stars: High-growth, high-market-share businesses that have potential for future success.
• Cash Cows: Low-growth, high-market-share businesses that generate significant revenue and profits.
• Question Marks or Problem Children: High-growth, low-market-share businesses that require further investment to determine their potential.
• Dogs: Low-growth, low-market-share businesses that are unlikely to generate significant profits.

By analyzing the position of each business line or product in the growth-share matrix, a large organization can prioritize its investments, allocate resources, and develop strategies for growth and profitability.