BCG Matrix

Group MembersBatch 22-A Group No 3Amit Gupta 01Pooja Krishnan 33Prabir Ghosh 34Kalpana Sharma 36Mahesh Deshmukh 59Vijaylaxmi Naickar 64

INTRODUCTIONIn the commercial arena, the choice of an

effective strategy is perhaps the most important and the toughest decision to take.

The decision to select the best strategy to meet the enterprise’s objectives is rendered complex by multifarious considerations.

BCG Matrix developed by a group known as Boston Consulting Group, USA.

Contd…it seeks to place the different products of an

organization in different gridsIn terms such as:

Profitabilitypercentage growth in salesmarket share position

when all the products of the company are put in four cells that is the market standing of the company can be analyzed in four different classes namely, stars, cash cows, dogs and question marks.

BCG Matrix

Contd…Stars (=high growth, high market share)use large amounts of cash and are leaders in the business

so they should also generate large amounts of cash. frequently roughly in balance on net cash flow. However

if needed any attempt should be made to hold share, because the rewards will be a cash cow if market share is kept.

Cash Cows (=low growth, high market share)profits and cash generation should be high , and because

of the low growth, investments needed should be low. Keep profits high

Foundation of a company

Contd… Dogs (=low growth, low market share) avoid and minimize the number of dogs in a company. beware of expensive ‘turn around plans’. deliver cash, otherwise liquidateQuestion Marks (= high growth, low market share) have the worst cash characteristics of all, because high

demands and low returns due to low market share if nothing is done to change the market share, question

marks will simply absorb great amounts of cash and later, as the growth stops, a dog.

either invest heavily or sell off or invest nothing and generate whatever cash it can. Increase market share or deliver cash

Nestle IndiaNestle had established in 1866 Headquarters in Vevey, Switzerland Nestle has growth today to be the world’s biggest

food and beverages company.the company is known today by its several strong

brands which are dominating the markets the world over.

With six factories and a large number of co-packers, Nestle India is a vibrant company offering a number of products in the Indian market.

Nestle India and BCG MatrixNestle has a wide range of products and is

the market leader in food business over the world.

It has a limited number of brands on India.The peculiarity of these brands is that those

brands which are established ones are really ones which dominate the market while, the brands which are not so well established are not so on account of any qualitative deficiency.

Contd…

Contd…The diagram shows the construction of a BCG Matrix for

Nestle India. Each product in the matrix finds an explanation herein below:

Product: Nescafe : leading coffee brands dominance which is unparalleled by any other brand High market share and high growth rate Product: Ceralac : leading baby food products witnesses quite a long hold in its market share major contributor for Nestle India’s revenues.

Contd…Product: Maggi Noodles:First preference of Indian children in terms of

instant food.high market share but the market growth rate of

Noodle consumption is not very high.number of purchasers.Product: Milo:removed off the shelvespotential to expand importance to Milo

Contd…Product: Maggi Saucesignificant contender leader has been highlighted with top television

celebritieshuge potential to be converted into a star.Product: Maggi Pickleslimited varietysales of Maggi Pickles has never really triggedIt is not a dog

Contd…Product: Maggi Soup Packaged soup market in India has a good future. never been rejected demand for soup itself is underdevelopedProduct: Kit Kat has an upper edge over its competitors. has lost some of the prominent recognition lacks significant market shareProduct: Bar OneProduct: Nestle MilkProduct: Nestle ButterProduct: Nestle Fruit N’ Milk

Contd…Product: Nesteataste conscious Indian consumer.the diverse and typical taste tendered is not in favour.facts are not totally against Nestea.It’s a cash cowProduct: Milky Barstage of a power brand.primary acceptance of Milky barlack of core qualityIt’s a dog

Contd…Product: Nestle DahiUnaware of the productOffered in selected outletslack of a growing market

Product: Crunch and MunchSince both these chocolates of Nestle cater to

the same market and are also similar in composition and variety

SUGGESTIONSIt has to focus on its distribution system and

offer better incentives for retailers who have till date been clinging on to its products.

It has to stop adopting a brand focus promotion strategy.

trying to impose a foreign taste on the local consumers.

LIMITATIONSProper corroborative research is required

before taking any action.proper reporting of its figures is not

available. limited survey of one city (Mumbai).Not much data was available

ConclusionThis marks the ends of the construction and

the study of the BCG matrix for Nestle India. The attempt herein made was primarily to focus on each brand in particular, as offered by Nestle in India, to analyse its pros and cons, to look for prospects and to find solutions for them to perform better.

Bibliography BOOKS: L. M. Prasad, Business Policy: Strategic Management, 247,

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