BCG Matrix on Nestle

Name Matrix Number

Lee Yean Yeon GM 05291

Loh Chee Kheong GM 05299

Chin Fui Yien GM 05287

Table of Content

Nestle Malaysia an Overview

Vision and Mission of Nestle

Categories of the products

BCG Matrix/ Growth Share Matrix

Products on BCG Dimension

Conclusion

Nestle Malaysia an OverviewStrength and Advantages of Nestle

Produce over 300 halal products in categories • Coffee and beverages, prepared foods, milk, liquid drinks, breakfast cereals, chilled dairy, ice-

cream, chocolate and confectionery

Brand names under Nestle• Maggi, Nespray, Kit Kat, Nestiva, Nestum, Bliss, Nutren, Cerelac, Power Bar & etc.

Milk

Produce over 300 halal products in categories

Dairy

Milk

Beverage

Nestle Professional

Food Business

Confectionary

Nestle Liquid DrinkNestle Ice-cream

Healthcare Nutrition

Chilled DairyMaternal & Infant Nutrition

Vision and Mission of Nestle

VisionGood Food Good Life

PositionAs a global, trusted and responsible food, nutrition, health and wellness company to be more proactive in providing healthy solutions and value

– added products to meet the needs of consumers

Categories of the products

BCG Matrix/ Growth Share Matrix

BCG Matrix was developed based on a company’s business units/product can be classified into four categories based on combinations or market growth and market share relative to the largest competitor.

BCG Matrix

Cash Cow

• As leader in a mature market, cash cow exhibit a return on assets that is greater than the market growth rate, and thus generate more cash than they consume.

• What do you think about the ‘Cash Cow’ for Nestle?

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Low

High

Market Share Rate (Relative Position)High Low

• Maggi Noodle (Food)• Introduced in 1969• Market share is still growing

• Milo (Beverage)• Introduced in 1950• Sponsor 200 sport events in one year

Brand name has been embedded into customer’s heart

Star

• Stars generate large amounts of cash because of their strong relative market share, but also consume large amounts of cash because of their high growth rate.

• What do you think about the ‘Star’ For Nestle?

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Low

High

Market Share Rate (Relative Position)High Low

• Nescafe • Launched in 1964• High in research and development (R&D)

cost• The coffee market is still growing,

increasing number of coffee shops in the country

Question mark/ Problem Child

• It grow rapidly and thus consume large amount of cash, but as they have low market share, they do not generate much cash. As a result, it is a large net cash consumption.

• What do you think about the ‘Question Mark’ For Nestle?

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Low

High

Market Share Rate (Relative Position)High Low

• Chocolate (Confectionery)• Introduced in 1995• It remained strong brand leader in the

market.• Rise of competitors and start lose the

grip in the market.

Dog

• It has low market share and a low growth rate and thus it neither generate nor consume a large of cash.

• Dogs are cash traps because of the money tied up in a business that has little potential.

• What do you think about the ‘Dog’ For Nestle?

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Low

High

Market Share Rate (Relative Position)High Low

• Mineral water (Beverage)

• Sterile Milk bear brand (liquid drink)• Launched in 2013• The concept of packaging is not

welcomed

Weak in market, difficult to make profit

Overall BCG Matrix

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Low

High

Market Share Rate (Relative Position)High Low

Conclusion

• BCG framework is needed to assume whether the product has an increment in relative market share as well as to increase in the cash generation.

• It is a simple tool to view a corporation’s portfolio at a glance and resource allocation among strategic business units.

• Example, the position of a business on the growth-share matric provides an indication of its cash generation and its cash consumption.