The competitive advantage earned by other SBUs because of the dogs is more than cash cows sometimes. These businesses usually follow stability strategies.
BCG matrix helps in doing a comparative analysis of business potential and the evaluation of environment. It has nearly 50 sales offices spread all over the country, more than wholesale dealers and more than retailers. However, if the sales figures do not increase, a probable course of action would be divestment of the pizza brand.
They are cash traps. The market share of these products is not likely to experience massive gains either, but the current position makes them a high revenue generator. The low chances of success suggests that the management needs to be careful with the decision of investing resources in such a product since it offers no significant benefit to the organization.
The BCG Matrix is not free from limitations. There is no specific strategy which can be adopted. Moreover it can also help in pointing out the products that hold no prominent growth chances in the future due to industry trends and market share.
That means other firms are weaker firms. Amul to augment its chocolate business by increasing its production capacity. The business unit of butter aims to cater to the needs of people seeking healthier eating options by producing Amul lite.
Investment in these businesses is not likely to yield much profits, therefore they are not seen as a useful source of earning. Dogs Dogs are those products that have low market share and at the same time have limited likelihood of growing into a profitable business unit for an organization.
This is very well observed in the Cash cow scenario, wherein the company reduces the amount of investment and tries to take out maximum cash flow from the said product which increases the overall profitability.
The fact is that most businesses start as question marks as the company tries to enter a high growth market in which there are already existing businesses. Amul has few products which have not been able to generate the expected sales and revenues. Stars There are some products which have high market share and have the potential to grow more in the future.
They require huge amount of cash for maintenance and to gain market share. However, ineffective management of these issues can make it difficult to expand the market share of the product. The key theory underlying this fact is existence of an experience curve and that market share is achieved due to overall cost leadership.
The modified strategy of managing the chocolate brand is expected to bring an increase in the market share of the product in the coming years, which suggests that the chocolate brand can become a star if profitability targets are achieved.
Each of these cells represents a particular pattern of business. Cash Cows When the market share of a product is high and it is being sold in an industry that had developed to such an extent that no significant growth is expected in future, then the product can be deemed as a Cash cow.
Amul chocolate, energy drink, infant milk range and pizza are examples of dog.
There are some products being managed by Amul that can be identified as a question mark as their potential as a source of profitability remains uncertain. By increasing investment, the product is given a thrust such that the product increases its market share. BCG matrix has four cells, with the relative market share and the vertical axis denoting market growth rate.
The health conscious consumers have been targeted by the ice cream providing them with the option of ice creams that do not contain sugar.
They usually generate cash because of fast growing market. BCG matrix classifies businesses as low and high, but generally businesses run on medium scales too. Cash cows require little investment but they generate steady cash that can be utilized for investment in other business units.
The ice cream with probiotics is another indication of the way the sweet milk based dessert has helped the company to achieve a high market share Kumar and Meenakshi, The limitations are defined hereby.
Question marks generally possess new goods and services which have a good commercial prospective. Many times, dogs may help other businesses in gaining competitive advantage. These products can be regarded as cash traps due to the low chances of becoming a significant source of profitability for the company.
The analysis requires that both measures be calculated for each SBU. An SBU can turn into dog because of high costs, poor quality, ineffective marketing, poor strategies etc. The industry has growth potential, thus making it possible for the products to have room for growth if the pertinent issues are effectively managed.India’s alcohol industry is the third largest in the world with a value of $35 billion.
The industry is divided into three categories: Indian Manufactured Foreign Liquor (IMFL), beer, and homemade liquor. BCG Matrix: The market growth rate measures industry attractiveness.
Because for the case of YUM Brand, all SBUs (KFC, Taco Bell, Pizza Hut, Long John Silver’s, A&W) are located in the same fast- food industry, the referent standard is the industry growth rate measured against the SBUs’ growth rate.5/5(24). Analyzing Market Share with BCG Matrix Boston Consulting Group’s BCG Matrix is a business analysis tool to evaluate the strategic position of the business in terms of its brand portfolio and its prospects.
The matrix classifies business portfolio into four categories based on two dimensions; industry attractiveness (growth rate of that.
Indian Spirits Sector - Overview Indian Liquor Industry with estimated market value of INR bn is growing at % over the last two years. What is a BCG matrix? Update Cancel. Answer Wiki.
7 Answers. What are some good examples of application of BCG matrix to Indian companies? In BCG Matrix where these products lie Dairy Milk, Oreo Biscuits, 5 Star?
One of their product is an ingredient in the paint industry. Amul BCG Matrix Analysis Amul brand is a renowned name in the dairy industry in India, supplying milk, butter and other dairy related products to the Indian.Download