In what scenario might a firm invest significantly in products classified as 'Question Marks'?

Prepare for the IB Business Management Exam with our interactive quiz. Test your knowledge with multiple choice questions and flashcards, each providing detailed explanations and hints. Achieve exam success with our structured study tools!

Investing significantly in products classified as 'Question Marks' makes sense in scenarios where they have low market share but show potential for growth in a rapidly expanding market. 'Question Marks' are products that operate in high-growth areas but have not yet captured a significant market share. This position presents an opportunity for firms to pour resources into marketing, development, and scaling up production in hopes of building a stronger competitive position.

Firms may believe that these products can eventually turn into 'Stars'—those with high market share in fast-growing markets—if strategically nurtured through investment. Analyzing trends, customer behavior, and competitive dynamics might suggest that with additional investment, these 'Question Marks' could gain traction and lead to higher profits in the future.

In contrast, the other choices do not typically align with investing significantly in 'Question Marks'. A high market share might indicate an established position, while cash cows are usually focused on maximizing current profits rather than investing heavily in uncertain products. Products in declining markets would not justify significant investment since they are trending toward lower profitability.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy