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

Yes, there are number of reasons when firm want to hold onto a dog category of business. Some of the popular reasons are:

1) Reputation in the marketplace, when a business sells its any portfolio then other units might see some relatively change in business outcomes.

2) There may be some strategic creation of new segment and market opportunities by the organization.

3) Certain legal regulations force not to disinvestment.

4) Corporate level managers may wait for better valuation of their business to sell if they think so.

5) Even, that business might be converted or transformed into new products or services with same investment and infrastructure.