6. Scenario 3: BCG model We have learned the Boston Consulting Group model (the

Question

6. Scenario 3: BCG model
We have learned the Boston Consulting Group model (the 'BCG model' or 'Growth Share matrix' in the weekly discussion of Chapter 2. Let's assume the following scenario.
Acme Company has four strategic business units: (1) lap top computers, (2) color printers, (3) fax machines, and (4) digital cameras.

Lap top computer market of Scenario 3: The market is growing 20% annually. Acme has a market share of 30%. The market share of its competitors are: Dell: 20%, HP: 15%, IBM: 15%. The other competitors all have market shares less than 5%. Using the BCG growth/share matrix approach, how would you categorize the lap top computer business units of Acme Company?

Star

Question Mark

Cash Cow

Dog

7. Cliff runs a factory that supplies windshield wiper blades to General Motors and Ford. A sudden jump in the price of rubber and its substitutes has forced Cliff and other wiper blades manufacturers to double the price of the wiper blades. Cliff is relieved to discover his sales volume has not been affected much by this increase in price. You would explain to Cliff that this is because the demand for wiper blades is:

Price inelastic

Price secure

Price bundled

Price elastic

An inverse demand

Star

Question Mark

Cash Cow

Dog

Explanation / Answer

Answer: 6 - Option A : Star

Lap top computer market of Scenario 3:

So based on the BCG growth/share matrix approach, we would categorize the lap top computer business units of Acme Company as a Star, because

Answer 7: Option - A : Price Inelastic

Cliff runs a factory that supplies windshield wiper blades to General Motors and Ford. A sudden jump in the price of rubber and its substitutes has forced Cliff and other wiper blades manufacturers to double the price of the wiper blades. But Cliff is relieved to discoverd that his sales volume has not been affected much by this increase in price. This is because the large increase in the price has small impact in the demand this means this is the case of price inelsatic.

Thus we can say that demand of the wiper is price inelastic as price increase do not have large impact on volumes.

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