ACCA Strategic Business Leader (SBL) Practice Exam

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What general strategy does the Boston Consulting Group matrix focus on?

Customer loyalty initiatives
Investment strategies based on product performance
Employee engagement and training programs
Environmental sustainability plans

The correct answer is: Investment strategies based on product performance

The Boston Consulting Group (BCG) matrix is a strategic tool used by organizations to evaluate their product lines or business units based on two key dimensions: market growth rate and relative market share. The primary focus of the BCG matrix is to guide investment strategies based on product performance, categorizing products into four quadrants: Stars, Cash Cows, Dogs, and Question Marks. This allows companies to identify where to allocate resources effectively, such as investing in high-performing products (Stars) that have potential for growth or considering divesting from low-performing products (Dogs) that do not generate significant returns. This emphasis on evaluating products based on their market dynamics and performance is fundamental to operational and investment strategies, aligning with the objective of maximizing profitability and market position. The other options, while relevant in different strategic contexts, do not directly reflect the core focus of the BCG matrix on product performance and investment decisions.