Question

Within the BCG matrix, products that earn the dog label have limited market potential for the firm and also only hold a small relative market share. Products identified as dogs within this framework are typically obvious candidates for divestment, but are there any cases where doing so would not be wise for an organization? That is, why would a firm want to hold onto a dog?  

Answer 1

A firm would want to hold onto a dog because the dog category is not always unprofitable for the firm. The products in the dog category can help in attracting customers and leading them towards the higher-performing products. Earning some money from the dog and getting help from it in selling other products can be a reason to hold on to a dog. It makes customers look at the profitable products and hence help in selling them. In such a case, dog products act as a marketing channel and not a product line by itself. The return on investment is evaluated by evaluating the sales made of profitable products through it.