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Presented by Group 3

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BOSTON CONSULTING GROUP (BCG) MATRIX is developed by BRUCE HENDERSON of the BOSTON CONSULTING GROUP IN THE EARLY 1970s.

According to this technique, businesses or products are classified as low or high performers depending upon their market growth rate and relative market share.
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The B.C.G Matrix (Boston Box) The Boston Consulting Group developed a 2 x 2 matrix that allows the portfolio of products/SBUs to be positioned on the matrix according to: market growth rate relative market share (relative to the leading competitor) The value of the BCG matrix is that it examines the generation and management of cash within a business. Relative market share is seen as a predictor of the products capacity to generate cash and market growth is seen as the predictor of the products need for cash. This suggests that products with high market share will achieve high sales, but will need less investment in new brands and should have lower costs due to scale economies. Products in fast growing markets require higher levels of investment than those in slower growing markets. Products in low growth markets with a high market share will generate cash, which can be used to fund other products needing investment. Nb: Cash flow is not the same as profitability.

Question Marks

are at the introduction stage of the PLC, with high market growth and low market share. They are absorbing cash to fund developments in marketing in attempting to become future stars of the business. are the future of the organisation with high market share and high market growth. They are at the growth stage of the PLC but are still absorbing cash to sustain and develop market share

Stars

CASH COW

are at the maturity stage of the PLC and have high market share, but market growth is slowing. Marketing expenditure is limited so cash generated to fund other product areas of the business
are at the decline stage of the PLC having both low share and growth in the market. However, they are capable of generating cash in the short term.

DOG

Relative Market Share High Low

Question Mark Cash Generated + Cash Used -----Dog

High
Market Growth Low

Star Cash Generated ++++ Cash Needed ---0 Cash Cow

Cash Generated ++++ Cash Used +++

Cash Generated Cash Used

+ 0

10x

1x The BCG Matrix

0.1x

*BCG MATRIX
High
BUSINESS GROWTH RATE

Low

HIGH

LOW

MARKET SHARE

STAR
High growth , High market share
Amul Butter 86% market share Amul Lite 80% market share Amul Instant Full Cream Milk Powder80% market share Amul Milk 75% market share Ice Creams -37% market share (HUL-9%, Mother dairy and vadilal -7%)uld be made to hold the market share otherwise the star will become a CASH COW.

QUESTION MARKS

*NUTRAMUL 15% market share (CompetitorsBournvita, Horlicks, complan, boost)

*Amul Chocolates 10% market share

(Competitors Cadbury 70% market share, Nestle)

CASH COWS

Low growth , High market share

*Amul Spray 65% market sharear *Sagar Tea Coffee Whitener 40% market share * Processed Cheese -50% market shareocated in an
industry that is mature, not growing or declining.

10

Low growth, Low market share

* DOGS

*Amul Pizza 5% market share situated

at a declining stage.

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*Amul Product Portfolio

Category Chocolate Drink Butter, Ghee Cheese Sweets Milk Powder Ice-cream Chocolate Market Share 90% 85% 50% 50% 40% 37% 10% Market Position 1 1 1 1 1 2 3

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 companys 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.