In the BCG Matrix, what two factors are used to evaluate each business?

In the BCG Matrix, what two factors are used to evaluate each business?

• A. Growth rate of the market and relative market share.
• B. Customer satisfaction and retention.
• C. Production costs and supplier reliability.
• D. Employee performance metrics.

Answer: (A)

In the BCG Matrix, each business unit is evaluated using two dimensions: the growth rate of the market and the unit’s relative market share. The growth rate reflects market attractiveness and how much investment a unit might need to grow or defend its position. Relative market share shows how strong the unit is compared with the largest competitor, indicating its potential to generate cash and benefit from economies of scale. Together, these factors determine where a unit sits—such as Star, Cash Cow, Question Mark, or Dog—and guide decisions about where to invest, harvest, or divest. Other metrics like customer satisfaction, production costs, or employee performance describe different performance aspects but don’t define the BCG framework’s positioning axes.

In the BCG Matrix, each business unit is evaluated using two dimensions: the growth rate of the market and the unit’s relative market share. The growth rate reflects market attractiveness and how much investment a unit might need to grow or defend its position. Relative market share shows how strong the unit is compared with the largest competitor, indicating its potential to generate cash and benefit from economies of scale. Together, these factors determine where a unit sits—such as Star, Cash Cow, Question Mark, or Dog—and guide decisions about where to invest, harvest, or divest. Other metrics like customer satisfaction, production costs, or employee performance describe different performance aspects but don’t define the BCG framework’s positioning axes.