BCG MATRIX OF

By:

Abhishek Chandran, Arushi Roongta, Inderveer Singh, Nikita Gupta, Venkatesh B

POINTS OF DISCUSSION

About Coca-Cola, India Its brands

BCG matrix What is and why, BCG Product portfolio

method

BCG for coca-cola

Conclusion SWOT analysis Benefits and limitations Bibliography

OVERVIEW:

The world’s largest selling soft drink concentrates since 1886

Operational Reach: 200+ countries

Returned to India in 1993 after 16 years  The country’s top international investors,

having invested more than US$ 1 billion in the first decade

Consumer Servings (per day): 1.75 billion

BRANDS OF COCA-COLA:

WHAT IS BCG MATRIX ?

The Boston Consulting Group

A chart that had been created by Bruce Henderson in 1968

To help corporations with analyzing their business units or product lines

This helps the company allocate resources and is used as an analytical tool in: Brand Marketing Product Management Strategic Management Portfolio Analysis

WHY BCG MATRIX ?

 A well known tool for the marketing manager

Simple and easy to understand

The 'area' of the circle represents the value of its sales

Offers a very useful ‘MAP’ of the organization's product (or service) strengths and weaknesses, at least in terms of current profitability

Easy to evaluate business units as well as product lining

BCG MATRIX- PRODUCT PORTFOLIO METHOD~

THE THEORY:

Assumes that: An increase in the relative share market will result in an

increase in cash generation Growing market requires investment in asset to increase

capacity and results in consumption of cash

The cash required by rapidly growing business could be obtained from the firm’s other business units that were at a more mature stage & generating enough cash

By investing to become the market share leader in a rapidly growing market the business unit could more along the experience curve & develop a cost advantage

THE BCG MATRIX

STARS:

High Growth, High Market Share

Generate large amount of cash due to strong relative market share

Also consume large amount of cash because high growth rate

If a star can maintain its large market share it will become a cash cow when the market growth rate declines.

Keep and build your stars

CASH COW:

Low Growth, High Market Share

Foundation of the company

Exhibit a return on assets that is greater than market growth rate– generate more cash than they consume

Provide cash required to turn question marks into market leaders

Investment needed should be low

DOGS:

Low Growth, Low Market Share

Avoid and minimize the number of ‘dogs’ in the company

Neither generate nor consume a large amount of cash

Are cash traps due to the money tied up in a business that has little potential

Deliver cash, otherwise liquidate

QUESTION MARKS:

High Growth, Low Market Share

? Products that grow rapidly and as a result consume large amounts of cash

? As they have low market shares they don’t generate much cash

? Need to be analyzed carefully to determine if they are worth the investment required to grow market share

? Potential to gain market share and become a star, and eventually a cash cow when the market growth slows if not then it will become a dog

BCG MATRIX FOR THE PRODUCT LINE OF COCA-COLA:

Stars:

Maaza

Coca-cola

Thums Up

Cash-cows:

Kinley

Limca

Dogs:

Georgia

Kinley club soda

Diet coke

Question mark:

? Sprite

? Minute maid

? Fanta

MARKET SHARE OF COCA-COLA PRODUCTS:

Coca

-cola

Diet

Coke

Fanta

Gerogia

Kinley

Kinley

club

soda

Limca

Maaza

Minute

maid

Sprite

Thum

s Up

0

2

4

6

8 8.25

3.3

6

1

5.6

3

5

7.56.7

5

7

Products

Market Share

(In %)

Simple and easy to understand

Once becomes a star, its destined to be profitable

Provides a base for management to decide & prepare for future actions

Applicable to large companies that seek volume and experience effects

Should be able to manufacture and sell new products at a low price and get early market share leadership

Helpful for mangers to evaluate balance in the firms current portfolio

BENEFITS OF BCG:

LIMITATIONS OF BCG:

There is no clear definition of what constitutes a “market”

This model uses only two dimensions- market share and growth rate

A business with a low market can be profitable too

High market share is not only success factor

Sometimes ‘dogs’ can earn more that ‘cash cows’

Neglects the effects of synergy between business units.

Neglects small competitors that have fast growing shares

Strengths: Improved quality control Heavy investment Strong advertising network Modified and attractive

packaging

Weakness: Unskilled labour Needs face-lift Fear of retrenchment of

workers

Opportunities: Global growth to more than $1

million Good rural market Direct distribution Make customers by more

Threats: Stiff competition Changing consumer Health and wellness has

created concern

SWOT- ANALYSIS

CONCLUSION:

Though BCG MATRIX has its limitations, but its one of the most EASY and SIMPLE portfolio planning matrix ,used by large companies having multi-

products.

Coca- Cola strategically positions their products in the peoples mind in order to maximize their

acceptance.

Dog strategy: Either invest to earn market share or consider disinvesting. Should come up with new innovation

Star strategy: Invest profits for future growth for earning more of profits and market share

Question mark strategy: Either invest heavily in order to push the products to star status or disinvest to avoid becoming a dog

Cash-cow strategy: Use profits to finance new products

BIBLIOGRAPHYGoogle Images

www.wikipedia.org

www.wikibook.org

www.coco-colaindia.com

Thank You