Using the BCG Matrix, Coca-Cola reviews its product portfolio. Diet Coke has low share in a declining market, while Coke Zero has high share in a stable, low-growth market. What should Coca-Cola do?

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Question context: We’re applying the BCG Matrix to Coca-Cola’s portfolio. Diet Coke is described as having low market share in a declining market, while Coke Zero has high market share in a stable, low-growth market. Each option is evaluated against the BCG framework and real-world logic.

Option A: 'Both products are popular, so both should continue to receive investment.' This contradicts the BCG guidance. In the matrix, dogs (low share in declining markets) should typically be divested, as they offer little future potential, while cash cows (high share in low-growth markets) warrant investment to harvest profits. Treating both as worthy of investment ignores the strategic pruning recommended for underperforming units.

Option B: 'Diet Coke is a cash cow and should be supported; Coke Zero is also a cash cow and should be supported.' Here, Diet Coke is described as a cash cow, but the scenario states it has low share in a declining market, which is characteristic of a dog, not a cash cow. Coke Zero, being high share in a stable, low-growth market, aligns more with a cash cow, but portraying Diet Coke as cash cow makes this option internally inconsistent and incorrect.

Option C: 'Diet Coke should be maintained because of Baby Boomer loyalty; Coke Zero should be divested' This mixes loyalty considerations with a non-BCG move. Baby Boomer loyalty might argue for retention strategies, but Diet Coke’s position in a declining market and low share still resembles a dog, not a strategic case for maintenance, and divesting Coke Zero contradicts its cash-cow potential in a stable, low-growth market. So this misreads the core BCG dynamics.

Option D: 'Both are in low-growth markets, so both receive minimal supportd be discontinued.' This mischaracterizes Coke Zero as a low-growth, cash-cow-like asset; it actually has high market share and would generate steady profits, meriting investment, not minimal support. It also treats both as low-potential, which the data do not support for Coke Zero.

Option E: 'Diet Coke is a dog and should be divested; Coke Zero is a cash cow and should be supported.' This aligns with the BCG framework: a dog (low share, declining market) should be divested or harvested with limited resources, while a cash cow (high share, low-growth market) should be defended to harvest profits and fund other ventures. The logic is consistent with standard portfolio-management reasoning and the given market conditions.

Overall, the reasoning shows why each incorrect option fails to map onto the BCG logic, and why the described pairing in Option E correctly captures the recommended strategic stance for Diet Coke and Coke Zero.

FA25-BL-BUS-M370-11927 Marketing Midterm Exam- Requires Respondus LockDown Browser

Using the BCG Matrix, Coca-Cola reviews its product portfolio. Diet Coke has low share in a declining market, while Coke Zero has high share in a stable, low-growth market. What should Coca-Cola do?

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