IPA IP 2020 Question 21
A question IPA Japan published in 令和2年度 10月 ITパスポート試験 公開問題 問21, translated into English. ITPEC is based on the same exams.
Same question on ITPEC: Apr 2022 Q84
Which of the following often uses a chart with relative market share for the horizontal axis and market growth rate for the vertical axis, and analyzes the strategic positioning of a company’s products or business?
Explanation
PPM — Product Portfolio Management places products or businesses on a chart of relative market share (horizontal) and market growth rate (vertical).
Relative market share measures the company's competitive strength in a market, and market growth rate measures that market's potential. The four quadrants guide where management resources go:
- •Star: high growth, high share — invest to keep the lead
- •Cash cow: low growth, high share — needs little investment and funds the others
- •Question mark (problem child): high growth, low share — invest selectively to build share
- •Dog: low growth, low share — a candidate for withdrawal
Answer (b)
Why not others:
- •(a) ABC analysis — ranks items by sales or quantity in descending order and splits them into groups A, B and C for priority control; it has no market axes
- •(c) SWOT analysis — lists internal strengths and weaknesses and external opportunities and threats; it does not plot products by share and growth
- •(d) Value chain analysis — breaks a company's activities into primary and support activities to see where value and cost arise
Key rule: A chart of market growth rate against relative market share is PPM; the quadrant a business falls in tells whether to invest, harvest or withdraw.
Business Strategy Management · AI-written, may contain errors
This question comes from the past questions IPA Japan publishes, translated into English by ITPEC Practice. ITPEC Practice is an independent study tool and is not affiliated with IPA or ITPEC. See the original paper (PDF) or Report an issue.