Purpose of BCG Matrix

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Purpose of BCG Matrix

  1. 1. BUSINESS POLICY Presented To : Mr. Husnain Manzoor
  2. 2. PRESENTED BY Tehreen Bint Ilyas (FA12-MBT-089) Mashal Mahmood ( FA12-MBT-113) Haseeb Baloch (FA12-MBT-031) Ata ul Hassnain ( FA12-MBT-027) Fraz Asmat ( FA12-MBT-015) M.Ubair ( FA12-MBT-063)
  3. 3. PURPOSE OF BCG MATRIX The Boston Consulting Group (BCG) Matrix is a simple tool to • Assess a company’s position in terms of its product range. • Company think about its products and services • make decisions about which it should keep, which it should let go and which it should invest in further.
  4. 4. STARS  Stars generate large sums of cash because of their strong relative market share, but also consume large amounts of cash because of their high growth rate.  If a star can maintain its large market share it will become a cash cow.
  5. 5. CASH COWS  As a leader in a mature market, cash cows exhibit a return on assets that is greater than the market growth rate – so they generate more cash than they consume.  They provide the cash required to turn question marks into market leaders.
  6. 6. QUESTION MARK  Question marks are products that grow rapidly and as a result consume large amounts of cash  Because they have low market shares they don’t generate much cash.  Produce large net cash consumption.  A question mark has the potential to gain market share and become a star, and eventually a cash cow.
  7. 7. DOGS  Dogs have a low market share and a low growth rate and neither generate nor consume a large amount of cash.  Dogs are cash traps because of the money tied up in a business that has little potential.
  8. 8. BETA Companies Interestrate ReturnRate Lipton 20% 21% 1% 0.01 Tetley 8% 21% 13% 0.13 Alokozay 15% 21% 6% 0.06 Supreme 18% 21% 3% 0.03 Tapal 17% 21% 4% 0.04 Beta 0.054
  9. 9. USE OF BETA  It minimizes the market share.  It also minimizes the risk in the market .
  10. 10. ALOKOZAY BCG TABLE Products IndustryGrowthMarketshare Tissues 17% 20% Cookingoil 10% 15% Tea 25% 30% Biscuits 8% 10% Propertyanddeveolpment 20% 25% Baverages 30% 35%
  11. 11. BCG MATRIX OF ALOKOZAY BCG MATRIX OF ALOKOZAY 30% Industry Growth Rate 8% 35% Baverages Organic, Question Mark Market share Stars Tea Inorganic Inorganic P & D Tissues Cows Organic Dogs Defensive Cooking oil 10% Biscuits
  12. 12. STARS  Beverages and tea of Alokozay are in Stars of BCG matrix.  Beverages have industry growth 30% and market share 35%.  Tea have Industry growth 25% and market share 20%.  If a beverages and tea maintain its large market share it will become a cash cow.  So Alokozay should use Organic and Inorganic strategies for betterment.
  13. 13. QUESTION MARK  Alokozay have no product in Question Mark.  Because Alokozay have no product with low industry growth and high market share.  If there is any product in question mark then company should use Inorganic strategy.
  14. 14. COWS  Product and development and tissues of Alokozay are in Cows of BCG matrix.  P&D have industry growth 20% and market share 25%.  Tissues have Industry growth 17% and market share 20%.  P&D and tissues exhibit a return on assets that is greater than the market growth rate  So Alokozay should use Organic strategies for betterment.
  15. 15. DOGS  Cooking oil and biscuits of Alokozay are in Cows of BCG matrix.  Cooking oil have industry growth 10% and market share 15%.  Tissues have Industry growth 08% and market share 10%.  Cooking oil and tissues are cash traps because of the money tied up in a business that has little potential.  So Alokozay should use Deffensive strategies for betterment.

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