Tag: Business Studies

A cash cow product in the Boston Matrix?

Select ONE answer:

1. Has low sales in a slow-growth market
2. Has low sales in a high-growth market
3. Has high sales in a slow-growth market
4. Has high sales in a high-growth market
5. Has no sales

Give a real-life example of a cash cow product and explain why it is one:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Business Studies KS5 classes.

The answer is 3 – Cash cows are low-growth products with a high market share. These are mature, successful products with relatively little need for investment. They need to be managed for continued profit – so that they continue to generate the strong cash flows that the company needs for its Stars.

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Price skimming is NOT likely if?

Select ONE answer:

1. The firm has a unique product
2. The firm has a patent for the product
3. Demand for the good is price elastic
4. Demand for the good is price inelastic
5. The firm has a heavily branded good

Explain your answer using diagrams:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Business Studies KS5 classes.

The answer is 3 – Price skimming is a pricing strategy in which a business sets a relatively high initial price for a product or service at first, then lowers the price over time. It is effective only when the firm is facing an inelastic demand curve. If the long run demand schedule is elastic, market equilibrium will be achieved by quantity changes rather than price changes. Penetration pricing is a more suitable strategy in this case.

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Price discrimination is …?

Select ONE answer:

1. Charges the same price for the same goods
2. Sets a price by adding percentage to costs
3. Uses a high price to enter a market
4. Uses a low price to enter a market
5. Sets different prices for different customers for the same good or service

Give a real-life example of price discrimination:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Business Studies KS5 classes.

The answer is 5 – Price discrimination is the practice of charging a different price for the same good or service.

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In the figure below, Product A is a?

Select ONE answer:

1. Dog
2. Cash cow
3. Star
4. Problem child
5. Panther

What actions are firms likely to take with this type of product?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Business Studies KS5 classes.

The answer is 1 – Dogs are products with low market share in a mature, slow-growing industry. These products typically “break even”, generating barely enough cash to maintain the business’s market share. Though owning a break-even product might provide the social benefit of providing jobs and possible synergies that assist other products, they are from an accounting point of view such a product is worthless, by not generating cash for the company. They depress a profitable company’s return on assets ratio, which is used by many investors to judge how well a company is being managed. Dogs should if possible be sold off.

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The axes of the Boston Matrix are?

Select ONE answer:

1. Market share and sales
2. Market share and market growth
3. Market growth and profits
4. Sales and time
5. Profits and cash

What is meant by a market share?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Business Studies KS5 classes.

The answer is 2 – BCG matrix is a corporate planning tool, which is used to portray firm’s brand portfolio on a quadrant which has a relative market share axis (horizontal axis) and a speed of market growth axis (vertical axis).

This work is licensed under a Creative Commons Attribution 4.0 International License.