According to the BCG matrix, what differentiates question marks from stars?

Prepare for the Management and Organization Module 6 (06-MGMT-ORG) – Strategy Exam. Engage with flashcards, multiple choice questions, hints, and explanations. Excel in your exam!

In the context of the BCG matrix, question marks are characterized by having a small share of a fast-growing market, while stars possess a large share of that same fast-growing market. This distinction is crucial because it informs strategic decision-making regarding resource allocation and investment. Companies that have products classified as stars are often recommended to invest significantly, as they have the potential to generate substantial revenue and profits due to their leading market position.

On the other hand, question marks represent opportunities that have not yet fully matured; they have yet to gain significant market share despite existing in a market that is growing rapidly. The challenge for organizations is to determine whether to invest in these question marks to help them gain market share and eventually transition into stars. Therefore, the defining difference hinges on the market share: stars lead the market, while question marks trail behind, albeit in a market with promising growth potential. This understanding allows companies to effectively strategize their growth path by deciding on the investment needed to boost their question marks into star positions.

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