Question

Kensei Corp. has three strategic business units (SBUs)—pharmaceutical, publishing, and consulting. Its pharmaceutical unit is relatively new in the sector and does not have a large market share. The pharmaceutical sector is a fast-growing sector, and companies with a large market share in the sector have been earning large profits. In the context of the BCG matrix, which of the following categories of SBUs best describes the pharmaceutical unit?A) StarsB) Cash cowsC) Question marksD) Dogs

Answer 1

Answer:

C) Question marks

Explanation:

Pharmaceutical units, shown in the above question, best fit the category called "question marks". This category includes products that are at the beginning of their life cycle, that is, that have a small and recent market share. Because they do not yet have a clear prediction of their performance, they usually require a large marketing investment to promote sales and therefore do not result in many initial profits.

The term question mark has been adopted to indicate that there is doubt about the product's yield and the feasibility of investing in its development. Care must be taken with the amount of question mark products as they require large investments.