Which SBU is typically seen as the least favorable choice in the BCG matrix?

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 BCG (Boston Consulting Group) matrix, the classification of business units is based on their market growth and market share. The SBU categorized as "Dogs" is typically seen as the least favorable choice. This is because "Dogs" represent business units that have low market share within a low-growth industry. They do not generate significant profits and often require more resources than they can return, making them less attractive for investment and growth strategies.

Investors and managers often view "Dogs" as candidates for divestiture since they are unlikely to become stars or cash cows. These business units may drain resources that could be better used on more promising opportunities, which aligns with strategic decisions aimed at maximizing overall portfolio performance.

On the other hand, "Stars," "Cash Cows," and "Question Marks" each hold more favorable positions in the matrix. "Stars" are businesses with high market share in high-growth markets, indicating potential for significant revenue. "Cash Cows" generate steady cash flows from their high market share in mature markets, supporting investment in other areas of the business. "Question Marks" represent potential growth opportunities but require careful analysis to determine if they can be transformed into "Stars." Therefore, "Dogs" clearly occupy the least

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