1. BOSTON CONSULTING GROUP MATRIX (Matteo Biagini)
To make the Boston Consulting Group matrix regarding our company, Bank Pekao, we have
choosen to show where the brand is positioned respect one of our main competitors: PKO Bank
Polski.
The first action was to collect data about market share of Bank Pekao and PKO. We considere four
of the main businesses that Pekao offers: retail
loans,
corporate
loans,
retail
savings,
corporate
savings.
To
collect
data
we
used
the
financial
reports
of
the
year
2013
of
Bank
Pekao
and
PKO.
About loans and deposits Pekao is the market leader in Poland. So all the values about market share
are a little bit higher than PKO.
Pekao has the 24% of market share in retail loans, the 17% in corporate loans, 13% in corporate
deposits and 22% in retail deposits. Instead PKO has the 19% of market share in retail loans, the
13% in corporate loans, 21% in corporate deposits and 10% in retail deposits.
To find the relative market share that is the Pekao’s relative share to its largest competitor(PKO) we
used the formula: relative market share =1 + log (own business unit share/competitor’s business
unit share). We can see thanks to this where Pekao is positioned aginst PKO.
Thanks to financial reports was also easy to find data about revenue volume and market growth
rate. To find the market growth rate we applied the formula: Market growth rate= (market revenues
t1 – market revenues t0) x 100/market revenues t0.
Following the data and BCG matrix.
PKO
market
share:
retail loans 19%
corporate loans 13%
retail deposit 21%
corporate deposit 10%
Pekao Market share:
retail loans 24%
corporate
loans
17%
retail
deposit
22%
corporate
deposits
13%
Relative
market
share:
retail loans 1,101
corporate
loans
1,116
retail
deposit
1,02
corporate
deposits
1,113
3. Thanks to the graph, we can see the situation in the market of Bank Pekao is not so bad. All the
products we analyzed are positionated in a good position in the matrix.
Retail deposit(RD) and corporate loans(CL) are all “Cash Cows“: the growth is quite low but these
elements have anyway an high market share. Bank Pekao don’t need any investment promotion or
placement campains for these products. It means that the market is mature.
Interesting is also the position of retail loans and corporate deposits. In this case the market growth
is higher and goes from the 9,9% of retail loans to 13,4% of corporate deposits. These products can
be considered stars. They have an high market growth and an high market share. So for Bank
Pekao in these two fields is suggested an high level of investments but not forgetting support,
promotion and placement. Anyway we can consider these such a good products because there is an
high level of profits(especially in corporate deposits) and if market share is kept, Stars are likely to
grow into Cash Cows.
References:
http://www.pekao.com.pl/?s,main,language=EN
http://www.rns-pdf.londonstockexchange.com/rns/5961A_2-2013-3-21.pdf
http://www.pkobp.pl
http://www.pkobp.pl/pkobppl-en/investor-relations/financial-reports/
In particular, both Mobile unit and Fixed voice unit, are in the „Cash Cows“ square; this means that
for both the units the growth rate is low (infact we have 2% for Mobile and 4% for Fixed voice), but
the market share of Orange in this two sector is high: a little higher for Mobile unit that is around
27% respect to T-Mobile that has 26%; clearer is the situation of Fixed voice where Orange holds
a good part of the market with 42%, and its main competitor only 28%. Having a quite high shares
in business units characterized by a low market growth rates, it means that Orange polska doesn’t
need for more investments and promotion in these two sectors, because its positions are already
relevant and advantageous and the low level of growth in their respective markets shows that it
would not have more opportunities in these markets, that are already mature. As we can see from
the dimensions of the two circles, these situations let Orange polska record high profits (1584 Mio
for Mobile unit, 543 Mio for Fixed voice unit), these are infact the two main sources of profit for
the company.
Analysing the third business unit taken into account, Broadband, we can see in the graph that it
settles in the „Stars“ square. Infact this unit records a quite high market share 33% (it means one-
third of the market, instead T-Mobile has 23%), but also with a high growth rate in this unit (around
12%). This situation on one side is similar to the previous units settled in „Cash Cows“ square,
infact all three business units have an high market share, but on the other side Broadband unit is the
only one with also an high market growth rate. This means that in this case Orange polska should
invest more and continue to support the promotion of its product, because the market is not still
mature and the profit margin could be even higher than the current. The real challenge of Orange in
this situation is to face the high growth of this business unit, trying to mantain an high market share
compared to the competitors, and particularly its main one, T-Mobile. If our company succeeds in
doing this, its Broadband unit will likely grow from „Stars“ into „Cash Cows“ square, ensuring still
high profits to Orange, but, now, in a mature market.
