Presented below is a sample response to a question #B for the company American Entertainment, Inc. This is for guidance only. As stressed in class, each company and their situation is different and the answers to the final question will vary considerably.

B. What does this theory recommend for this company? Explain.

The company is a star. The BCG recommendation for stars is that "they represent probably the best profit growth and investment opportunities available to the company, and every effort should therefore be made to maintain and consolidate their competitive position. This will sometimes require heavy investment beyond their own generation capabilities and low margins may be essential at times to deter competition" (Hedley, 1977, p. 10).

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