Suppose we are using BCG Matrix to evaluate technology portfolio, which of the following do we want the firm to phase out?

Question

BlackTom AI · Accepted Answer

Dogs represent business units with low relative market share in low-growth markets, so they are poor candidates for future investment and are typically divested or phased out.

1) Relevant knowledge points and concepts
- BCG (Boston Consulting Group) Matrix classifies products/business units into four quadrants based on market growth and relative market share: Stars (high growth, high share), Cash Cows (low growth, high share), Question Marks or Problem Children (high growth, low share), and Dogs (low growth, low share).
- Strategic recommendations: invest to grow Stars; “milk” Cash Cows to generate cash; selectively invest or divest Question Marks depending on potential to become Stars; divest or phase out Dogs.

2) Step-by-step reasoning
- The question asks which quadrant we want the firm to phase out.
- Dogs occupy low-growth markets and hold low relative market share, which implies limited competitive advantage and low future returns.
- Firms should avoid deploying scarce resources into Dogs because prospects of becoming market leaders (Stars) are minimal, so phasing out maximizes resource efficiency.

3) Calculations
- Not applicable—this is a qualitative portfolio-analysis decision. No numerical computation is required.

4) Why the correct answer is correct
- Dogs have weak competitive positions and operate in unattractive markets, offering low cash generation and little potential for profitable growth. Phasing them out frees capital and management attention for opportunities with higher ROI (Cash Cows to fund Stars/Question Marks). Therefore, Dogs are the units managers typically choose to divest or discontinue.

5) Why the other options are incorrect
- Stars: High share in high-growth markets; require investment to sustain growth—do not phase out.
- Cash Cows: Low-growth but high-share; generate surplus cash used to fund other units—do not phase out.
- Question Marks: High-growth but low-share; managerially intensive and potential to become Stars if invested—choice is to invest or divest, not automatic phase-out.

6) Conclusion
Therefore the correct choice is "Dogs – unlikely to reach the star quadrant," matching the provided answer.

Suppose we are using BCG Matrix to evaluate technology portfolio, which of the following do we want the firm to phase out?单项选择题

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