Which of the following strategies is most appropriate for a business unit with a low relative market share in a high-growth market?

Which of the following strategies is most appropriate for a business unit with a low relative market share in a high-growth market?
A . Using excess cash generated to fund other business units
B . Investing in the acquisition of competitors
C . Investing in projects to maintain market share
D . Designing product improvements to protect market share

View Answer

Answer: C

Explanation:

For a business unit with a low relative market share in a high-growth market, the most appropriate strategy is investing in projects to maintain market share. In a high-growth market, opportunities for expanding or solidifying market share are significant. A business unit with a low market share can benefit from investing in projects that enhance its competitive position, such as improving operational efficiency, innovation in products or services, and marketing efforts. These investments aim to strengthen the unit’s market presence and capitalize on the growth potential of the market. This approach is more suitable than using excess cash for other units, acquiring competitors, or just focusing on product improvements, as it directly addresses the need to build a stronger market position in a growing market.