40330837-coke-bcg-stlyle-1
TRANSCRIPT
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