BUSI 690 Case Study Matrices Assignment
| 2026 Updated with complete solutions.
1. In a BCG matrix analysis, a business unit with high market share in a low-growth
industry is classified as a:
A. Star
B. Cash cow
C. Question mark
D. Dog
Answer: B. Cash cow
Rationale: High share + low growth defines a cash cow, which generates excess cash to
fund other units. Stars are high share/high growth, question marks are low share/high
growth, and dogs are low share/low growth. The classification depends on both
dimensions, not share alone.
2. A corporate parent uses the GE/McKinsey nine-cell matrix. Which combination
signals a 'selective investment' strategy?
A. High industry attractiveness, strong competitive position
B. Medium industry attractiveness, medium competitive position
C. Low industry attractiveness, strong competitive position
D. Low industry attractiveness, weak competitive position
Answer: B. Medium industry attractiveness, medium competitive position
Rationale: The middle three cells of the GE matrix indicate selective investment, where the
firm should invest in specific segments or capabilities. High/high signals invest to grow,
while low/weak signals harvest or divest. Medium/medium is the classic selective zone.
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,3. Which analytical tool is most appropriate for assessing whether a firm's resources
are valuable, rare, inimitable, and non-substitutable?
A. PESTEL analysis
B. Porter's Five Forces
C. VRIN/VRIO framework
D. Value chain analysis
Answer: C. VRIN/VRIO framework
Rationale: The VRIN/VRIO framework specifically evaluates resources against the four
criteria for sustained competitive advantage. PESTEL and Five Forces assess external
environments, while value chain analysis examines activity-level cost and differentiation
drivers. Only VRIN/VRIO directly addresses resource attributes.
4. A firm following a cost leadership strategy in a mature industry most likely protects
its position by:
A. Investing heavily in brand-building advertising
B. Achieving economies of scale and tight cost controls
C. Customizing products for niche segments
D. Rapidly introducing premium features
Answer: B. Achieving economies of scale and tight cost controls
Rationale: Cost leadership requires structural cost advantages such as scale, experience
curves, and efficient operations. Brand advertising and customization are differentiation
tactics, while premium features contradict a low-cost position. The correct answer aligns
with the strategy's internal logic.
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,5. In an Ansoff product-market matrix, a firm selling existing products to new
geographic markets is pursuing:
A. Market penetration
B. Product development
C. Market development
D. Diversification
Answer: C. Market development
Rationale: Market development means taking current products into new markets, such as
new geographies or segments. Penetration increases sales in existing markets, product
development creates new products for existing markets, and diversification involves both
new products and new markets. Geographic expansion is the textbook example of market
development.
6. The SPACE matrix uses four dimensions. Which pair represents internal strategic
positions?
A. Financial strength and competitive advantage
B. Environmental stability and industry strength
C. Financial strength and industry strength
D. Competitive advantage and environmental stability
Answer: A. Financial strength and competitive advantage
Rationale: In SPACE analysis, financial strength (FS) and competitive advantage (CA) are
internal dimensions, while environmental stability (ES) and industry strength (IS) are
external. The axes combine FS with ES and IS with CA. This distinction determines the
directional vector and recommended strategy.
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, 7. Which of the following best describes the primary purpose of a grand strategy
matrix in case analysis?
A. To rank business units by market share
B. To evaluate market growth and competitive position to guide strategy selection
C. To map internal processes against customer value
D. To calculate the net present value of diversification
Answer: B. To evaluate market growth and competitive position to guide strategy
selection
Rationale: The grand strategy matrix plots market growth against competitive position and
recommends strategies such as market development, divestiture, or integration. It does not
rank units by share (BCG) or map processes (value chain). NPV is a financial tool, not the
matrix's function.
8. A diversified firm's corporate parent adds value primarily by transferring skills
across business units. This is an example of:
A. Portfolio management
B. Restructuring
C. Synergy through economies of scope
D. Financial engineering
Answer: C. Synergy through economies of scope
Rationale: Transferring skills and sharing activities across units creates economies of
scope and synergy, which is a core rationale for related diversification. Portfolio
management treats units independently, restructuring focuses on turnaround, and financial
engineering relies on capital structure. Skill transfer is the classic synergy mechanism.
Page 4 of 74
| 2026 Updated with complete solutions.
1. In a BCG matrix analysis, a business unit with high market share in a low-growth
industry is classified as a:
A. Star
B. Cash cow
C. Question mark
D. Dog
Answer: B. Cash cow
Rationale: High share + low growth defines a cash cow, which generates excess cash to
fund other units. Stars are high share/high growth, question marks are low share/high
growth, and dogs are low share/low growth. The classification depends on both
dimensions, not share alone.
2. A corporate parent uses the GE/McKinsey nine-cell matrix. Which combination
signals a 'selective investment' strategy?
A. High industry attractiveness, strong competitive position
B. Medium industry attractiveness, medium competitive position
C. Low industry attractiveness, strong competitive position
D. Low industry attractiveness, weak competitive position
Answer: B. Medium industry attractiveness, medium competitive position
Rationale: The middle three cells of the GE matrix indicate selective investment, where the
firm should invest in specific segments or capabilities. High/high signals invest to grow,
while low/weak signals harvest or divest. Medium/medium is the classic selective zone.
Page 1 of 74
,3. Which analytical tool is most appropriate for assessing whether a firm's resources
are valuable, rare, inimitable, and non-substitutable?
A. PESTEL analysis
B. Porter's Five Forces
C. VRIN/VRIO framework
D. Value chain analysis
Answer: C. VRIN/VRIO framework
Rationale: The VRIN/VRIO framework specifically evaluates resources against the four
criteria for sustained competitive advantage. PESTEL and Five Forces assess external
environments, while value chain analysis examines activity-level cost and differentiation
drivers. Only VRIN/VRIO directly addresses resource attributes.
4. A firm following a cost leadership strategy in a mature industry most likely protects
its position by:
A. Investing heavily in brand-building advertising
B. Achieving economies of scale and tight cost controls
C. Customizing products for niche segments
D. Rapidly introducing premium features
Answer: B. Achieving economies of scale and tight cost controls
Rationale: Cost leadership requires structural cost advantages such as scale, experience
curves, and efficient operations. Brand advertising and customization are differentiation
tactics, while premium features contradict a low-cost position. The correct answer aligns
with the strategy's internal logic.
Page 2 of 74
,5. In an Ansoff product-market matrix, a firm selling existing products to new
geographic markets is pursuing:
A. Market penetration
B. Product development
C. Market development
D. Diversification
Answer: C. Market development
Rationale: Market development means taking current products into new markets, such as
new geographies or segments. Penetration increases sales in existing markets, product
development creates new products for existing markets, and diversification involves both
new products and new markets. Geographic expansion is the textbook example of market
development.
6. The SPACE matrix uses four dimensions. Which pair represents internal strategic
positions?
A. Financial strength and competitive advantage
B. Environmental stability and industry strength
C. Financial strength and industry strength
D. Competitive advantage and environmental stability
Answer: A. Financial strength and competitive advantage
Rationale: In SPACE analysis, financial strength (FS) and competitive advantage (CA) are
internal dimensions, while environmental stability (ES) and industry strength (IS) are
external. The axes combine FS with ES and IS with CA. This distinction determines the
directional vector and recommended strategy.
Page 3 of 74
, 7. Which of the following best describes the primary purpose of a grand strategy
matrix in case analysis?
A. To rank business units by market share
B. To evaluate market growth and competitive position to guide strategy selection
C. To map internal processes against customer value
D. To calculate the net present value of diversification
Answer: B. To evaluate market growth and competitive position to guide strategy
selection
Rationale: The grand strategy matrix plots market growth against competitive position and
recommends strategies such as market development, divestiture, or integration. It does not
rank units by share (BCG) or map processes (value chain). NPV is a financial tool, not the
matrix's function.
8. A diversified firm's corporate parent adds value primarily by transferring skills
across business units. This is an example of:
A. Portfolio management
B. Restructuring
C. Synergy through economies of scope
D. Financial engineering
Answer: C. Synergy through economies of scope
Rationale: Transferring skills and sharing activities across units creates economies of
scope and synergy, which is a core rationale for related diversification. Portfolio
management treats units independently, restructuring focuses on turnaround, and financial
engineering relies on capital structure. Skill transfer is the classic synergy mechanism.
Page 4 of 74
