JK Organization BCG Growth Share Matrix

HIGH
Market growth rate

LOW

Ag
ri

HIGH LOW
Relative Market Share

Stars

Here JK paper on the star position in the BCG Matrix because JK paper is Market leader in
Copier paper segment with 50% revenue and 23% market share. Top two in coated paper and
packing board segment with 16% and 11% market share respectively. For another 3-5 years, the
organization expects the demand scenario to continue at a growth rate of 6-7 percent. In India,
domestic demand for paper and paper boards is projected at 17.1 million tons in 2017-18 at a
maximum of 80,000 cr, increasing by 6.5% (most rapidly in the world) at CAGR. As the
company is a market leader and growing fastest in the world thus, it is in the star category. It
continuously improving its operation efficiency, having 1oo% Utilization of capacity, reduced
material cost through its farm programme, brought down fuel cost by using renewable resources
and having R&D expense of 4 Crore.
Cash Cow

The slower rate of Tyre demand is expected to rise by 3-5%, due to a decrease in sales of
MHCV following a shift in axle standards. The consumer emotions in Vehicles, UVs and 2Ws
were also reduced. Exports will increase by 3-5% as Indian tyres become more appropriate,
while imports are expected to decrease by 1-3% due to anti-dumping duty.
With the OEM and replacement sector rising at the same rate, Tyre demand is expected to rise by
7 to 9% till FY23, and currently, it is growing at a slower pace of 3 to 5 %. So we can say that
the market has the potential to grow in future, but at current it is growing slowly, so having low
market growth rate. So we have put JK tyre in the low market growth rate considering 7 to 9
percent as an average growth rate in future but as of now slow growth rate. The country’s
automobile industry reported a decline in growth, i.e. 6.5% in 2018-19 compared to 14.9% in
2017-18. 15% of JK organization revenue comes from JK tyre. A major player in the tyre
industry is MRF having the highest market share of 24% and compare to MRF JK tyre having
nearly half of market share of MRF. Having considerable market share compared to its most top
competitor and slow market growth rate.

Dog

JK Lakshmi Cement

UltraTechCement is the market leader in the cement industry with a sales turnover of 35,703.50
in FY 2018-19 and JK Laksmi Cement having the sales turnover of 3,882.34 cr. JK Laksmi
Cement has 11% relative market share of its major competitor UltraTechCement. So we can see
it has a low relative market share. India's cement, clinker and asbestos powder exportations
increased by 10.5% between FY12-FY20 and USD 177.9 million at CAGR (April-July 2019).
For FY20, it anticipates an eight percent rise in demand and this is possibly a 71 percent increase
in FY20 industry usage from 65 percent in FY18, given the limited capacity rise. In the forecast
period, 2020 to 2024, the world market size for concrete and cement is projected to rise at
"CAGR 7% with sales of USD 332.2 billion." At the end of 2024, the growth rate for "YOY
(year-by-year) for 2020 is forecast at 5.87%." Due low growth rate and market share it is in Dog
category

Umang Dairies

The company has delivered a poor growth of 0.75% over past five years. The dairy sector rises
by 15 percent
CAGR by 2020 according to the research agencies. It is interesting to note that in India, the per
capita consumption of milk is at CAGR of 3% from 1% worldwide. So we can clearly see the
potential of market in future. India's dairy industry expanded by 6.4% year-on-year over the past
four years against the 1.7% global growth. Umang dairies having a sales turnover of 244 crore,
which is relatively very low compared to its major competitors like nestle, Amul. Considering it
in dog category due to low market share and growth of the company.

JK Agri Genetic having sales 190.68 cr and its largets competitor Kaveri seed having a sales
turnover of rs. 768.99 cr. And if we see relative market share with respect to Kaveri seeds its
24% of Kaveri seeds. Agri industries see contraction this year and show a low growth rate.

Post analysis strategy

Build:

Increase investment in JK paper even it is in start category because in terms of cashflow it needs
to increase, so investing in this business will increase the further market share of the company as
it is already the market leader in this industry.

Hold:

JK TYRE is the cash cow, so it needs to hold the situation, and due to the other factors like
economic slowdown also the business is suffering. JK Lakshmi cement is in dog category, but it
can also hold on its position as it is contributing significantly in terms of revenue. And both
having significant cash flows, so it needs to maintain its position.

Harvest:

This strategy will be good for umang dairies because it is having weak cash flow and low
growth of .5% from last five years. So expenditures can slowly be decreases like in R&D,
equipment and new technologies

Divest :

Umang dairies and JK Agri genetic is in dog category having low growth and market share and
also contributing very low in terms of the overall revenue of the group, they can sell it and focus
on other businesses. And the resources can be utilized in other areas of business.