Corporation distributes its products in two hundred countries around the globe. PepsiCo has its own distribution network and bottling manufacturing units. Its main products are, breakfast bars, energy drinks, coffee drinks, snacks, soft drinks and sports nutrition. PepsiCo is famously known for its strategy of horizontal integration, in , it merged Tropicana; an orange juice company with Quaker oat.
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Dogs Question marks also known as Problem Childs In the BCG matrix, market growth and market share of the products or service of a company are compared to each other. This allows a company to determine whether they should invest in a product or whether they should de-invest, or even stop the product altogether.
View a BCG matrix example below. They have ended up in the so-called maturity stage of the product lifecycle. A product that can be classified as a cash cow in the BCG Matrix generally has a high market share, a reasonable margin, and limited growth or a slight decrease. The costs are low.
The production line is largely recouped, and there is a limited investment in marketing. With cash cows it is important that you as a company optimize the profit. So go see how you can, for example, optimize processes and thus reduce costs. The growth and market share are high.
Because the product is at the start of the product lifecycle, the margins are usually also high. A lot is being invested in marketing. It is important for a company to have stars.
Here you can earn big money. To get stars, for example, a company must invest in product development. If you have a star as a company, the strategy for this product must be aimed at gaining as much market share as possible.
The margins are low, the market share is low and the market barely grows or even shrinks. The company will no longer invest in marketing. Many companies will choose not to produce the product at all. The market growth is high, but the market share low. The strategy for products that have been designated as a question mark must either be focused on growth to turn the product into a star or on cost savings to turn the product into a cash cow. The market is growing very fast, but it takes a fortune in marketing to gain a large market share in this.
You need to focus on this and invest in it. You have to choose: will it be a dog or a star? How can you optimize the profit from this? DOGS Which products or services do not grow or show a shrinkage and the market is also no longer interesting, e. You must stop this! However, you can also use the model to determine the priority for other matters within a company.
For example, you can analyze your customer portfolio using the BCG matrix. How does this work? List all your customers, and determine the margin and potential growth per customer.
It will soon become clear which customers are making real money. The customers with whom a lot of money is earned and where much growth can be expected are your stars. Customers who do have a high turnover, but whose margins or growth are lower, can be qualified as cash cows. Customers who can potentially generate a lot of revenue for example because it is a large company , but where relatively little is earned can be qualified as question marks. You can qualify dogs that cost a lot of work, where there is little revenue, and where there is little potential to earn.
Maybe you should say goodbye to these customers and use your sales and marketing power to get more out of the question marks and the stars. Also make sure that your cash cows are not forgotten. Start thinking about how you can optimize the profit of these customers. Clients that you first qualified as a question mark and still fall into this segment after a year, you may have to qualify as dogs. Focus on customers that are making a profit or that can achieve growth!
Unfortunately, the implementation of the outcome did not go as planned and the company fell even further into the abyss. Read here the whole Nokia story. Article rating: 3.
What is a BCG Matrix? – Examples & How-To Guide
Introduction of Coca-Cola: Coca-Cola also known as Coke is a popular carbonated soft drink sold in stores, restaurants and vending machines in over two hundred countries. It is one of the worlds most recognizable and widely sold commercial brands. Although Coke has been the target of urban legends decrying the drink for its supposedly copious amounts of acid, or the "life-threatening" effects of its carbonated water but still it is the most in-style soft drink. About its safety and the ethics of the company that produces it, it is widely accepted as the most dominant soft drink in the world today. Originally intended as a patent medicine when it was invented in the late 19th century, Coca-Cola was bought out by shrewd businessman Asa Griggs Candler, whose aggressive marketing tactics led Coke to its dominance of the world soft drink market throughout the 20th century. Although faced with accusations of perverse side-effects on the health of consumers and monopolistic practices by its producing company, Coca- Cola has remained a popular soft drink well into the first decade of the 21st century.
Coca-Cola BCG Matrix
The investment strategy for these products has to be very well thought through by the management as there are chances that these businesses might not yield any profit for the organization. These business units or products are cash traps and therefore are not seen as a useful source of earning. Cash Cows These are the products which are in low growth markets with high market share. Products which are market leaders in their specific industry and their industry is not expected to see any major growth in the future are considered as Cash Cows.
BCG Matrix of PepsiCo
In this regard, there are specific ways or techniques which can be noted in order to emerge and continue to be competitive in the market environment. The marketing context have been noted as the key factor to achieve company objectives and the marketing aspect rests on customer-orientation, market focus and coordinated marketing as well as profitability. In profit making business, the firm obviously has to do their best to achieve the level of customer satisfaction as a manner of staying ahead of the competitive position and making a profit. In traditional ways, marketing has been used by different firms to be able to increase the capabilities of the company in the market. Its concept can be considered as one of the most essential element underpinning the success of business In the competitive market environment, connecting with the target market is getting more complicated for different industries Accordingly, it takes an effective management and approaches to win over the skeptical target market which suggest that it is the moment to forget everything that has been learned regarding marketing and branding
Dogs Question marks also known as Problem Childs In the BCG matrix, market growth and market share of the products or service of a company are compared to each other. This allows a company to determine whether they should invest in a product or whether they should de-invest, or even stop the product altogether. View a BCG matrix example below. They have ended up in the so-called maturity stage of the product lifecycle.