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TOPIC: BCG MATRIX OF COCa-COLA COMPANY

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Credits

SR.N O1 2 3 4 5 6

NAMES

ROLL NOS

NIRAJ BHAGAT HARDIK PANCHAL DHAIRYA PAREKH RISHI PARMAR CHIRAG RANA NIKUNJ SHAH

3 16 20 21 27 36

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AcknowledgementAny accomplishments requires the efforts of many people and this work is no different.The completion of the project not only brings an appreciated respite from many months of demanding effort, but also provides a welcome opportunity to acknowledge in writing the soul who helped all along the way, Miss Sweta who is our STRATEGIC MGMT MAM who provided overall guidence regarding the project.Her help was willingly and expertly given at the time of great pressure and need, so we am greatly thankful to her. And, we thank all those who have directly or indirectly helped us in presenting the project.Page | 4

IndexSr.n o1 About Coca-Cola Company

Particulars

Pg.N o7

2

Products and Brands

8

3 4

Various Products World-wide

9 10

Brands Names Of Coca Cola Products In India

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PRODUCT THAT SELL MORE IN MARKET ACCORDING TO DISTRIBUTORS

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6

BCG Matrix

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7

The BCG Matrix and the one size fits all strategies notion

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8

BCG Matrix of Coca Cola Company

18

9

Other Uses and Benefits of the BCG Matrix

19

10

Limitations of the BCG Matrix

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11

Conclusion

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About Coca-Cola CompanyAtlanta, Georgia. Its stock is listed on the NYSE and is part of DJIA and S&P 500. Its current president and CEO is Muhtar Kent. The Coca-Cola Company is the world's largest beverage company, largest manufacturer, distributor and marketer of non-alcoholic beverage concentrates and syrups in the world and is one of the largest corporations in the United States. The company is best known for its flagship product Coca-Cola, invented by pharmacist John Stith Pemberton in 1886. The Coca-Cola formula and brand was bought in 1889 by Asa Candler who incorporated The CocaCola Company in 1892. Besides its namesake CocaCola beverage, Coca-Cola currently offers nearly 400 brands in over 200 countries or territories and serves 1.5 billion servings each day. The company operates a franchised distribution system dating from 1889 where The Coca-Cola Company only produces syrup concentrate which is then sold to various bottlers throughout the world who hold an exclusive territory. The Coca-Cola Company is headquartered in Atlanta, Georgia. Its stock is listed on the NYSE and is part ofPage | 7

DJIA and S&P 500. Its current president and CEO is Muhtar Kent.

Products and BrandsThe Coca-Cola Company offers nearly 400 brands in over 200 countries, besides its namesake Coca-Cola beverage. This includes other varieties of Coca-Cola such as:

Diet Coke (introduced in 1982), which uses aspartame, a synthetic phenylalanine-based artificial sweetener in place of sugar Diet Coke Caffeine-Free Cherry Coke (1985) Diet Cherry Coke (1986) Coke with Lemon (2001) Diet Coke with Lemon (2001) Vanilla Coke (2002) Diet Vanilla Coke (2002) Coca-Cola C2 (2004) Coke with Lime (2004) Aquarius Mineral Water (2004) Diet Coke with Lime (2004) Diet Coke Sweetened with Splenda (2005) Coca-Cola Zero (2005)Page | 8

Coca-Cola Black Cherry Vanilla (2006) Diet Coca-Cola Black Cherry Vanilla (2006) Coca-Cola BlK (2006) Diet Coke Plus (2007) Coca-Cola Orange (2007) Diet Coca-Cola with Citrus Extract (2008)

Various Products World-wide

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Brands Names Of Coca Cola Products In India COCA-COLA THUMS UP SPRITE FANTA LIMCAPage | 10

MINUTE MAID PULPY ORANGE MAAZA KINLEY

PRODUCT THAT SELL MORE IN MARKET ACCORDING TO DISTRIBUTORS

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9 8 7 SELL IN MARKET 6 5 4 3 2 1 0 3 1 T H U M S - S P R IT E C O K E UP M A A ZA F A N T A 2 L IM C A 6 5 8

P RODUCTS

BCG MatrixThe BCG Matrix method is the most well-known portfolio management tool. It is based on product life cycle theory. It was developed in the early 70s by the Boston Consulting Group. The BCG Matrix can be used to determine what priorities should be given in the product portfolio of a business unit.

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To ensure long-term value creation, a company should have a portfolio of products that contains both high-growth products in need of cash inputs and lowgrowth products that generate a lot of cash. The Boston Consulting Group Matrix has 2 dimensions: market share and market growth. The basic idea behind it is: if a product has a bigger market share, or if the product's market grows faster, it is better for the company.

There are four segments of the BCG Matrix (presented above) where the various products

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are placed in the portfolio of the company. These are:1)Question Marks (high growth, low market share)o

Question

Marks and

have

the

worst low

cash

characteristics of all, because they have high cash demands generate returns, because of their low market share.o

If

the

market Marks

share will

remains simply

unchanged, great

Question

absorb

amounts of cash.o

These products are in growing markets but

have low market share.o

Question marks are essentially new products buyers yet to

where have

discover them.o

The

marketing

strategy is to get markets to adopt these products so as to convert them to Stars for the company.

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o

Question marks have high demands and low

returns due to low market share.o

These products need to increase their market

share quickly or they become dogs.o

The best way to handle Question marks is to

either invest heavily in them to gain market share or to sell them.

2)Stars (high growth, high market share)o

Stars are defined by having high market share

in a growing market.o

Stars are using large amounts of cash. Stars

are leaders in the business. Therefore they should also generate large amounts of cash.o

Stars are frequently roughly in balance on net

cash flow.o

Stars are the leaders in the business but still

need a lot of support for promotion and placement.o

If market share is kept, Stars are

likely to grow into cash cows.Page | 15

3)Cash Cows (low growth, high market share)o

Cash cows are in a position of high market

share in a mature market.o

If competitive advantage has been achieved, cows have high profit margins and

cash

generate a lot of cash flow.o

Because of the low growth, promotion and

placement investments are low.o

Investments into supporting infrastructure can

improve efficiency and increase cash flow more.o

Cash cows are the products that businesses

strive for.o

Cash Cows are often the stars of yesterday

and they are the foundation of a company.

4)Dogs

(low

growth,

low

market share)o

Dogs are in low growth and have low

markets

market share.Page | 16

o o

Dogs should be avoided and minimized. Expensive turn-around plans usually do not

help.o

Dogs must deliver cash, otherwise they must

be liquidated.

The BCG Matrix and the one size fits all strategies notionThe BCG Matrix method can help to understand a frequently made strategy mistake: having a one size that fits all strategy approach, such as a generic growth target (9 percent per year) or a generic return on capital of 9.5% for an entire corporation. In such a scenario:

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Cash Cows Business Units will reach their profit target easily. Their management have an easy job. The executives are often praised anyhow. Even worse, they are often allowed to reinvest substantial businesses. cash amounts in their mature

Dogs Business Units are fighting an impossible battle and, even worse, now and then investments are made. These are hopeless attempts to "turn the business around".

As a result all Question Marks and Stars receive only mediocre investment funds. In this way they can never become Cash Cows.

These inadequate invested sums of money are a waste of money. Either these SBUs (Small Business Units) should receive enough investment funds to enable them to achieve a real market dominance and become Cash Cows (or Stars), or otherwise companies are advised to disinvest. They can then try to get any possible cash from the Question Marks that were not selected.

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BCG Matrix of Coca Cola CompanyPage | 19

The BCG

C

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Other Matrix

Uses

and

Benefits of the BCGBCG matrix helps a company to use the

experience curve to its advantage, it enables the company to manufacture and sell new products at a price that is low enough to get early market share leadership. Once it becomes a star, it is destined to be profitable.

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BCG model is helpful for managers to evaluate balance in the firms current portfolio of Stars, Cash Cows, Question Marks and Dogs.

BCG method is applicable to large companies that seek volume and experience effects.

The model is simple and easy to understand. It provides a base for management to decide and prepare for future actions.

Limitations of the BCG MatrixSome limitations of the Boston Consulting Group Matrix include:

It neglects the effects of synergy between business units.

Market growth is not the only indicator for attractiveness of a market.

Sometimes Dogs can earn more cash than Cash Cows.Page | 22

The problems of getting data on the market share and market growth.

There is no clear definition of what constitutes a "market".

A high market share does not necessarily lead to profitability all the time.

The model uses only two dimensions market share and growth rate. This may tempt management to emphasize a particular product, or to divest prematurely.

A business with a low market share can be profitable too.

The model neglects small competitors that have fast growing market shares.

Thus, basically the BCG Matrix is useful for a company to achieve balance between the four categories of products a company produces. As a particular industry matures and its growth slows, all business units become either cash cows or dogs. The overall goal of this ranking is to help corporate analysts decide which of their business units to fund,Page | 23

and how much; and which units to sell. Managers are supposed to gain perspective from this analysis that allowed them to plan with confidence to use money generated by the cash cows to fund the stars and, possibly, the question marks.

ConclusionAny strategic decision making exercise cannot be successful unless the fact situation and the figures have been taken account of and the taken accordingly. The present attempt also follows the trend. In a field exercise, pertinent data has been collected as regards the different brands of Coca Cola as being offered in India and based on the facts collected, specific suggestions has been made for the promotion of the brands which are not performing well and also those which have already become the power brands. The aim of the exercise was not to highlight on the BCG matrix as such but to use BCG matrix as a tool towards analysis of Coca Cola India as an organization with all its products in particularPage | 24

as well as on a whole. Thus the suggestion generated are all brand specific and pertain to the factors behind each brand which contribute to its growth or lead to its fall. Also, one important fact has been witnessed by this study. It is not that organization name which is all for a product. This is to say that though Coca Cola is the leader is beverage products in the world and has dominating brands in India as well yet, its name is not sufficient to make all brands a success even though they may be related to the beverage business and thus within the core competency of Coca Cola. It is essentially only account of the fact that the present day consumers are changing. The colonial concept of a big name hides all has changed and unless the brand in particular comes up to the expectation in the subjective satisfaction of the consumer, it will not succeed, not matter how big the name of the organization is. Thus Coca Cola has to refocus on not so well performing brands and taking each of them in particular, in accordance with the plan of action as well the highlighted technique, decide to reposition its brands in the market. Escaping from the

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cumbersome task of repeating the observations made herein, it is only advisable to state that the present study has really come out with some glaring defects in the strategy followed in some of the products and Coca Cola has to revisit its plan of action in order to convert its dogs and question marks into stars.

Bibliography

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