Question

Jeep launched the new Jeep Liberty several years ago. The Liberty is intended to compete with other moderately-sized SUVs. The marketing department at Jeep wants to determine the Liberty's market share and classification. The market growth rate for moderately-sized SUVs is two percent. Use the following information to determine the Jeep Liberty's relative market share and BCG matrix classification.
Market Share
Jeep Liberty 44%
Toyota RAV-2 28%
Honda CRV 18%
Ford Escape 10%

Answer 1

Answer:

1.57

cash cow

Explanation:

When using the BCG matrix, the relative market share helps to compare how your product is doing vs the industry's leader. In this case, to measure he relative market share of the Jeep Liberty we divide it by the industry's leader, or in this case, the runner up = 44% / 28% = 1.57

Since the Jeep Liberty's relative market share is 1.57 times larger than the second most popular mid-size SUV, then we could classify it as a cash cow. A cash cow is a product offered in a mature slow growth market that has a high market share and generates large revenues and profits to a company.