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TOPIC:
BCG MATRIX OF
COCa-COLA
COMPANY
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Credits
SR.N
O
NAMES ROLL NO’S
1 NIRAJ BHAGAT 3
2 HARDIK PANCHAL 16
3 DHAIRYA PAREKH 20
4 RISHI PARMAR 21
5 CHIRAG RANA 27
6 NIKUNJ SHAH 36
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Acknowledgement
Any accomplishments requires the efforts of many people and this work is no different.The completion of the project not only brings an appreciated respite from many months of demanding effort, but also provides a welcome opportunity to acknowledge in writing the soul who helped all along the way, Miss Sweta who is our STRATEGIC MGMT MAM who provided overall guidence regarding the project.Her help was willingly and expertly given at the time of great pressure and need, so we am greatly thankful to her.
And, we thank all those who have directly or indirectly helped us in presenting the project.
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Index
Sr.n
o
Particulars Pg.N
o
1 About Coca-Cola Company 7
2 Products and Brands 8
3 Various Products World-wide 9
4 Brands Names Of Coca Cola
Products In India
10
5 PRODUCT THAT SELL MORE IN
MARKET ACCORDING TO
DISTRIBUTORS
11
6 BCG Matrix 12
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7 The BCG Matrix and the “one size
fits all strategies” notion
16
8 BCG Matrix of Coca Cola Company 18
9 Other Uses and Benefits of the BCG
Matrix
19
10 Limitations of the BCG Matrix 20
11 Conclusion 21
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About Coca-Cola
Company
Atlanta, Georgia. Its stock is listed on the NYSE and is part of DJIA and S&P 500. Its current president and CEO is Muhtar Kent.
The Coca-Cola Company is the world's largest beverage company, largest manufacturer, distributor and marketer of non-alcoholic beverage concentrates and syrups in the world and is one of the largest corporations in the United States. The company is best known for its flagship product Coca-Cola, invented by pharmacist John Stith Pemberton in 1886. The Coca-Cola formula and brand was bought in 1889 by Asa Candler who incorporated The Coca-Cola Company in 1892. Besides its namesake Coca-Cola beverage, Coca-Cola currently offers nearly 400 brands in over 200 countries or territories and serves 1.5 billion servings each day.
The company operates a franchised distribution system dating from 1889 where The Coca-Cola Company only produces syrup concentrate which is
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then sold to various bottlers throughout the world who hold an exclusive territory.
The Coca-Cola Company is headquartered in Atlanta, Georgia. Its stock is listed on the NYSE and is part of DJIA and S&P 500. Its current president and CEO is Muhtar Kent.
Products and Brands
The Coca-Cola Company offers nearly 400 brands in over 200 countries, besides its namesake Coca-Cola beverage. This includes other varieties of Coca-Cola such as:
Diet Coke (introduced in 1982), which uses aspartame, a synthetic phenylalanine-based artificial sweetener in place of sugar
Diet Coke Caffeine-Free Cherry Coke (1985) Diet Cherry Coke (1986) Coke with Lemon (2001) Diet Coke with Lemon (2001) Vanilla Coke (2002) Diet Vanilla Coke (2002) Coca-Cola C2 (2004)
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Coke with Lime (2004) Aquarius Mineral Water (2004) Diet Coke with Lime (2004) Diet Coke Sweetened with Splenda (2005) Coca-Cola Zero (2005) Coca-Cola Black Cherry Vanilla (2006) Diet Coca-Cola Black Cherry Vanilla (2006) Coca-Cola Bl ā K (2006) Diet Coke Plus (2007) Coca-Cola Orange (2007) Diet Coca-Cola with Citrus Extract (2008)
Various Products World-wide
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Brands Names Of
Coca Cola Products
In India
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• COCA-COLA
• THUMS UP
• SPRITE
• FANTA
• LIMCA
• MINUTE MAID PULPY ORANGE
• MAAZA
• KINLEY
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PRODUCT THAT SELL MORE
IN MARKET ACCORDING TO
DISTRIBUTORS
2
5
6
1
3
8
0
1
2
3
4
5
6
7
8
9
THUMS-UP
SPRITE COKE MAAZA FANTA LIMCA
PRODUCTS
SELL
IN M
ARKE
T
BCG Matrix
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The BCG Matrix method is the most well-known
portfolio management tool. It is based on product life
cycle theory. It was developed in the early 70s by the
Boston Consulting Group. The BCG Matrix can be
used to determine what priorities should be given in
the product portfolio of a business unit.
To ensure long-term value creation, a company
should have a portfolio of products that contains both
high-growth products in need of cash inputs and low-
growth products that generate a lot of cash. The
Boston Consulting Group Matrix has 2 dimensions:
market share and market growth. The basic idea
behind it is: if a product has a bigger market share,
or if the product's market grows faster, it is better for
the company.
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There are four segments of the BCG Matrix
(presented above) where the various products
are placed in the portfolio of the company.
These are:-
1)Question Marks (high growth, low market share)
o Question Marks have the worst cash
characteristics of all, because they have high
cash demands and generate low returns,
because of their low market share.
o If the market share remains unchanged,
Question Marks will simply absorb great
amounts of cash.
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o These products are in growing markets but have
low market share.
o Question marks are essentially new products
where buyers
have yet to
discover them.
o The marketing
strategy is to get markets to adopt these
products so as to convert them to Stars for the
company.
o Question marks have high demands and low
returns due to low market share.
o These products need to increase their market
share quickly or they become dogs.
o The best way to handle Question marks is to
either invest heavily in them to gain market
share or to sell them.
2)Stars (high growth, high market share)
o Stars are defined by having high market share in
a growing market.
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o Stars are using large amounts of cash. Stars are
leaders in the business. Therefore they should
also generate large amounts of cash.
o Stars are frequently roughly in balance on net
cash flow.
o Stars are the leaders in the business but still
need a lot of support for promotion and
placement.
o If market share is kept, Stars are
likely to grow into cash cows.
3)Cash Cows (low growth, high market
share)
o Cash cows are in a position of high
market share in a mature market.
o If competitive advantage has been achieved,
cash cows have high profit margins and
generate a lot of cash flow.
o Because of the low growth, promotion and
placement investments are low.
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o Investments into supporting infrastructure can
improve efficiency and increase cash flow more.
o Cash cows are the products that businesses
strive for.
o Cash Cows are often the stars of yesterday and
they are the foundation of a company.
4)Dogs (low growth, low
market share)
o Dogs are in low growth
markets and have low
market share.
o Dogs should be avoided and minimized.
o Expensive turn-around plans usually do not help.
o Dogs must deliver cash, otherwise they must be
liquidated.
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The BCG Matrix and
the “one size fits all
strategies” notionThe BCG Matrix method can help to understand a
frequently made strategy mistake: having a one size
that fits all strategy approach, such as a generic
growth target (9 percent per year) or a generic
return on capital of 9.5% for an entire corporation.
In such a scenario:
Cash Cows Business Units will reach their profit
target easily. Their management have an easy
job. The executives are often praised anyhow.
Even worse, they are often allowed to reinvest
substantial cash amounts in their mature
businesses.
Dogs Business Units are fighting an impossible
battle and, even worse, now and then
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investments are made. These are hopeless
attempts to "turn the business around".
As a result all Question Marks and Stars receive
only mediocre investment funds. In this way
they can never become Cash Cows.
These inadequate invested sums of money are a
waste of money. Either these SBUs (Small Business
Units) should receive enough investment funds to
enable them to achieve a real market dominance and
become Cash Cows (or Stars), or otherwise
companies are advised to disinvest. They can then
try to get any possible cash from the Question Marks
that were not selected.
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BCG Matrix of Coca
Cola Company
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Other Uses and
Benefits of the BCG
MatrixPage | 21
BCG matrix helps a company to use the
experience curve to its advantage, it enables the
company to manufacture and sell new products
at a price that is low enough to get early market
share leadership. Once it becomes a star, it is
destined to be profitable.
BCG model is helpful for managers to evaluate
balance in the firm’s current portfolio of Stars,
Cash Cows, Question Marks and Dogs.
BCG method is applicable to large companies
that seek volume and experience effects.
The model is simple and easy to understand.
It provides a base for management to decide
and prepare for future actions.
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Limitations of the
BCG MatrixSome limitations of the Boston Consulting
Group Matrix include:
It neglects the effects of synergy between
business units.
Market growth is not the only indicator for
attractiveness of a market.
Sometimes Dogs can earn more cash than Cash
Cows.
The problems of getting data on the market
share and market growth.
There is no clear definition of what constitutes a
"market".
A high market share does not necessarily lead to
profitability all the time.
The model uses only two dimensions – market
share and growth rate. This may tempt
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management to emphasize a particular product,
or to divest prematurely.
A business with a low market share can be
profitable too.
The model neglects small competitors that have
fast growing market shares.
Thus, basically the BCG Matrix is useful for a
company to achieve balance between the four
categories of products a company produces. As a
particular industry matures and its growth slows, all
business units become either cash cows or dogs.
The overall goal of this ranking is to help corporate
analysts decide which of their business units to fund,
and how much; and which units to sell. Managers are
supposed to gain perspective from this analysis that
allowed them to plan with confidence to use money
generated by the cash cows to fund the stars and,
possibly, the question marks.
ConclusionPage | 24
Any strategic decision making exercise cannot be
successful unless the fact situation and the figures
have been taken account of and the taken
accordingly. The present attempt also follows the
trend. In a field exercise, pertinent data has been
collected as regards the different brands of Coca
Cola as being offered in India and based on the facts
collected, specific suggestions has been made for the
promotion of the brands which are not performing
well and also those which have already become the
power brands. The aim of the exercise was not to
highlight on the BCG matrix as such but to use BCG
matrix as a tool towards analysis of Coca Cola India
as an organization with all its products in particular
as well as on a whole. Thus the suggestion generated
are all brand specific and pertain to the factors
behind each brand which contribute to its growth or
lead to its fall. Also, one important fact has been
witnessed by this study. It is not that organization
name which is all for a product. This is to say that
though Coca Cola is the leader is beverage products
in the world and has dominating brands in India as
well yet, its name is not sufficient to make all brands
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a success even though they may be related to the
beverage business and thus within the core
competency of Coca Cola. It is essentially only
account of the fact that the present day consumers
are changing. The colonial concept of a big name
hides all has changed and unless the brand in
particular comes up to the expectation in the
subjective satisfaction of the consumer, it will not
succeed, not matter how big the name of the
organization is. Thus Coca Cola has to refocus on not
so well performing brands and taking each of them in
particular, in accordance with the plan of action as
well the highlighted technique, decide to reposition
its brands in the market. Escaping from the
cumbersome task of repeating the observations
made herein, it is only advisable to state that the
present study has really come out with some glaring
defects in the strategy followed in some of the
products and Coca Cola has to revisit its plan of
action in order to convert its dogs and question
marks into stars.
BibliographyPage | 26
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