Trek Bicycles, Inc. is a manufacturer of bicycles and sells its bikes to retail outlets who serve the consumer market. Trek bicycles are priced at $300 and over and are typically sold to consumers who are recreational riders or those aspiring to compete in amateur cycling or triathlon events. Trek has enjoyed a steady stream of revenue from its line of road bicycles which are more traditional, multispeed bicycles for those who enjoy long rides on city or rural roads. Sales of road bikes are relatively stable and Trek does little to market the bikes to consumers since they have a dominant share of the market. However, hybrid bikes represent a growing segment as younger consumers prefer the upright riding position of the bikes and they can be utilized for either road or mountain biking. Trek is supporting the hybrid line of bikes with extensive advertising in specialty magazines as well as social media marketing. Trek believes the category of hybrid bikes is growing but their market position is not as strong as other manufacturers, such as Cannondale.
1. Using the Boston Consulting Group’s Growth-Share Matrix, road bicycles would be categorized as __________ while hybrid bikes would fall into the ___________ category.
a. cash cows; question marks
b. stars; question marks
c. cash cows; stars
d. dogs; stars
2. Explain why you select the two SBU’s.
3. Define any of the two SBU’s above.
4. List 3 limitations of Boston Consulting Group as a portfolio analysis tool.
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