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Dear tutor,
I have a question regarding about BCG matrix- The problem child or what is also known as The question mark.
My concern is, I have learnt that Problem child has low Market share and high Market growth and should be divested if not making enough profit. Now I can expect that a SBU which has a high Market growth and low Market share (according to the matrix ALL Problem child SBUs have!) can have a high Market share in near future and thus turn into a ‘Star.’
So, if no specific info is given then when I will specify that they better divest the SBU?Problem children should not necessarily be divested, but they cannot survive with a low market share. The market is a desirable one to be in (high growth) so the question to be addressed is should the problem child be divested quickly rather than face a slow decline or do we spend to gain market share and try to turn it into a star?
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