Which strategic business unit is expected to provide low or negative returns, as per 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 context of the BCG (Boston Consulting Group) matrix, the strategic business unit categorized as a "Dog" is expected to provide low or negative returns. This classification is based on two key dimensions: market growth rate and relative market share.

Dogs are units that occupy a low share of a mature market with minimal potential for growth. They typically do not generate enough cash to sustain themselves, making them less financially attractive. In contrast to Stars, which have high market share in a fast-growing market and generate significant returns, or Cash Cows, which have a high market share in a slow-growing market and provide consistent cash flow, Dogs are often seen as underperforming units that may drain resources without offering substantial returns.

As a result, they are usually candidates for divestment or require significant strategic reevaluation, as they do not align with growth objectives or profitability benchmarks typically sought in a business portfolio.

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