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Portfolio matrix

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  • 1. PORTFOLIO ANALYSISPORTFOLIO ANALYSIS - By Prof. Purvish Shah BE ( Mech), PGDBM (Gold Medalist)
  • 2. -Product Life Cycle: It is a life span through which a product needs to move.   Introduction Growth Maturity Decline Product Few  products More  product/Mor e features differentiation  important Reduced Price High/Low Based on  demand price  reduction Low Distribut ion Selective More  intensive new channels  Selective Promoti on Building  awareness sales is  target brand loyalty Low
  • 3. Portfolio Matrix : Popularly known as BCG matrix -Developed based on product life cycle theory by Boston Consulting Group. -What are the priorities for a company in given product portfolios - Helpful in long term value creations for a company
  • 4. STARSTAR ? ? ?? ? ? Cash CowCash Cow DogsDogs Low LowHigh High Market Growth Rate Relative Market Share Cash Usage Cash Generation
  • 5. Dogs: -Low market share -Low Growth rate -Cash trap for companies Question Marks: -Fast growing -Consumes major cash -Either become Dog or Star ( high risk)
  • 6. Stars:Stars: - Generate CashGenerate Cash - High cash consumptionHigh cash consumption - If taken care becomes Cash cowIf taken care becomes Cash cow Cash Cow:Cash Cow: -Generate more cash than consumeGenerate more cash than consume - Help other business growHelp other business grow
  • 7. BCG matrix for ITC ltd.BCG matrix for ITC ltd. -ITC is formally known as Indian TobaccoITC is formally known as Indian Tobacco company.company. -Company is in to diverse business portfolioCompany is in to diverse business portfolio like Hotels, Greetings, Cigarettes, Agarbatti,like Hotels, Greetings, Cigarettes, Agarbatti, Specialty papers, Agricultural business,Specialty papers, Agricultural business, Cloths, Sports wear, FMCG products andCloths, Sports wear, FMCG products and Infotech businessInfotech business..
  • 8. STARSTAR Hotels, papers,Hotels, papers, Agri businessAgri business ? ? ?? ? ? Agarbatti,Agarbatti, ClothsCloths Cash CowCash Cow Cigarettes, FMCGCigarettes, FMCG DogsDogs InfotechInfotech Low LowHigh High Market Growth Rate Relative Market Share Cash Usage Cash Generation
  • 9. BCG matrix for MARUTI SUZUKIBCG matrix for MARUTI SUZUKI Models available:Models available: Swift, Zen estillo, Swift Desire, sx4,Swift, Zen estillo, Swift Desire, sx4, grand vitara, A STAR, ALTO, 800,grand vitara, A STAR, ALTO, 800, Wagon R, Versa, Baleno, OmniWagon R, Versa, Baleno, Omni
  • 10. STARSTAR SWIFT, ZENSWIFT, ZEN ESTILO, DESIREESTILO, DESIRE ? ? ?? ? ? SX4, GRANDSX4, GRAND VITARA, A STARVITARA, A STAR Cash CowCash Cow 800, ALTO,800, ALTO, WAGON RWAGON R DogsDogs BALENO,BALENO, VERSA, OMNIVERSA, OMNILow LowHigh High Market Growth Rate Relative Market Share Cash Usage Cash Generation
  • 11. LIMITATIONS:LIMITATIONS: -Only two factors taken in to consideration.Only two factors taken in to consideration. - Data accuracy becomes very importantData accuracy becomes very important - Business of low over all market share mayBusiness of low over all market share may also be profitable ( specialty/niche segments)also be profitable ( specialty/niche segments) - It ignores effect of synergy between differentIt ignores effect of synergy between different business.business.