Which aspects do you think these companies ignored?????

Product Portfolio

It shows the range of products a company has in development or available for consumers at any one time.

Product Portfolio

It shows the stages that products go through from development to withdrawal from the market

Product Life Cycle (PLC)

Product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller

Contributes to strategic marketing planning

Products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life cycle stage.

May help in forecasting and managing cash flow

Profits rise and fall at different stages of product life cycle

Product Life Cycle Diagram)

Introduction Stage

Slow sales volumes to startDemand has to be createdCustomers have to be prompted to try the

productMakes no money at this stage

Growth Stage

Costs reduced due to economies of scaleSales volume increases significantlyProfitability begins to risePublic awareness increasesCompetition begins to increase with a few

new players in establishing marketIncreased competition leads to price

decreases

Maturity Stage Costs are lowered as a result of production

volumes increasing and experience curve effects sales volume peaks and market saturation is

reached increase in competitors entering the market prices tend to drop due to the proliferation of

competing products brand differentiation and feature diversification is

emphasized to maintain or increase market share Industrial profits go down

Saturation and Decline Stage

Costs become counter-optimalSales volume decline or stabilizePrices, profitability diminishProfit becomes more a challenge of

production/distribution efficiency than increased sales

Market Share

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BCG Matrix:- Boston Consulting Group analysis

Created by Bruce Henderson in 1968

Introduction

BCG Matrix is also known as :o Portfolio Evaluation Matrixo Growth Share Matrixo Strategic Business Unit Analysis

Usage of BCG Matrix:o Provides a frame work for allocation of resources among different business unit.o Allows one to compare many business units at a glance

STARSHigh growth, High market share

Stars are leaders in business.

They also require heavy investment, to maintain its large market share.

It leads to large amount of cash consumption and cash generation.

They are foundation of the company

and often the stars of yesterday.

They generate more cash than required.

They extract the profits by investing as little cash as possible

CASH COWSLOW GROWTH, HIGH MARKET SHARE

Most businesses start of as question marks.

They will absorb great amounts of cash if the market share remains unchanged, (low).

Why question marks? Question marks have potential to become star and eventually cash cow but can also become a dog.

Investments should be high for question marks.

QUESTION MARKSHIGH GROWTH, LOW MARKET SHARE

Dogs do not have potential to bring in much cash.

Number of dogs in the company should be minimized.

Business is situated at a declining

stage.

DOGSLOW GROWTH, LOW MARKET SHARE

Product mix of Parle

BISCUITS

Hide & Seek

Parle-G

Hide & Seek Bourbon

Milk Shakti

BEVERAGES

Frooti

Bailley

Grapoo Fizz

LMN

Market Share

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STAR Question Mark

DogsCash Cows

Hide & SeekHide & Seek

Bourbon

Milk ShaktiParle-G

Biscuits

Market Share

Mar

ket

Gro

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STAR Question Mark

DogsCash Cows

Frooti Grapoo Fizz

LMNBailley

beverages

Sales

Time

Development Introduction Growth Maturity Saturation Decline

benefits

BCG MATRIX is simple and easy to understand. It helps you to quickly and simply screen the opportunities

open to you, and helps you think about how you can make the most of them.

It is used to identify how corporate cash resources can best be used to maximize a company’s future growth and profitability.

limitations

BCG MATRIX uses only two dimensions, Relative market share and market growth rate.

Problems of getting data on market share and market growth.

High market share does not mean profits all the time. Business with low market share can be profitable too.

Thank You