What does the BCG Matrix evaluate?

• A. A portfolio of businesses on the growth rate of their markets and each business's relative market share.
• B. A single product's market success over time.
• C. The efficiency of the supply chain.
• D. The overall corporate mission.

Answer: (A)

The main concept tested is that the BCG Matrix evaluates a company’s portfolio of businesses by looking at two dimensions: the market growth rate and the business’s relative market share. The growth rate shows how fast the market for each unit is expanding, while relative market share compares a unit's size to its biggest competitor, indicating its cash-generating ability and competitive position. This framework helps managers decide where to allocate resources by classifying units into categories like high-growth leaders, cash-generating incumbents, rising stars needing investment, or underperforming dogs requiring divestment or harvest. It is not about measuring a single product’s market success over time, nor about supply chain efficiency or the organization’s mission.