The BCG Matrix is a matrix created by Boston Consulting Group. It is a simple tool to identify which sector of your business needs attention and which can be ignored or closed.While Domestic is a star with high market share (8.75%) and high market growth rate (35%). The “?” is exports, while the market is growing at 40% , the revenue share for exports is only 1%. This needs to be focused upon as there is opportunity to tap on the increasing growth rate as currently XYZ generates very low revenues (5 cr.) through its export division.
Production statistics of poultry obtained from : PFI (Poultry Federation Of India)
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Sync Quest Case Study Competition<br />Contact details <br />Email id : email@example.com<br />firstname.lastname@example.org<br />Phone No. : 7873223326, 8018424757<br />Prepared by<br />Amit Kaundinya (XIM B 2010- 12)<br />Kumar Gaurav (XIM B 2010-12)<br />
Business Focus Area : Exports <br />The BCG matrix for XYZ company in the frozen goods market : showing exports, institutional and domestic revenue shares plotted against market growth rate.<br />Domestic market is the star. Exports is the “?” <br />XYZ must focus on exports as it has potential to gain market share and increase revenues.<br />Refer Appendix 1 for BCG Matrix<br />
SWOT Analysis For Exporting <br /><ul><li> Is in the exports business and is aware of the logistics needed for distribution in outside countries.
Leverage its export business knowledge and services to improve logistics efficiency and reduce costs.
Competition from already established players in the overseas market.
Limited product portfolio :chicken which is the staple diet in UK is not produced by XYZ company.</li></li></ul><li>The Export Strategy<br /><ul><li>Leverage the export business knowledge acquired and use it for effective and efficient logistics and distribution management in the overseas market.
Target the NRI market : concentrate on the “Indianness” of the XYZ brand. Provide Indian recipes on the product packaging to enhance the “India” factor in the product.
Ensure product quality is of superior level. Have quality adherence processes in place.
Imperative to enter the UK market as it is 70% of the total frozen food export business. Hence act fast and with pace to get the UK certification. Refer appendix 2 for revenues expected from UK
Identify target areas of high consumption of frozen goods. Subdivide this into areas depending on the variety of foods.
Two subdivided categories would be vegetarian and non vegetarian foods. Subdivision of areas will be based on consumption trends and eating habits in the area..
Identify distributors and large retail houses in this areas for a smooth distribution process.</li></li></ul><li> The OODA Strategy for Quick Action In Export Market<br />We suggest the OODA loop generally used in defense strategies for making an entry in the export market. Once the segmentation of the market is done based on consumer preferences. Follow the OODA loop.<br />Observe – check how well your products are doing in each segment. Note and track the top, medium and low performing products.<br />Orient – based on your observations, orient the business.<br />Decide – Take a decision on what would be the best possible product mix for maximum profitability.<br />Act – exit certain areas, expand in others. Act and act fast. Pace a key criteria between winning and losing.<br />The OODA loop is a continuous process and will lead to targeting the right segments and will lead to providing the market what it needs. <br />
Brand Awareness<br />Issues<br /><ul><li> Lack of brand recognition in major meat eating and heavy consumption parts of India.
Brand issues with restaurants recently due to quality issues.</li></ul>Branding : Efficient and Effective <br />Offline Branding : Use of traditional media. Majorly targeted to domestic and institutional markets.<br />Online Branding : Branding and marketing of services on the internet. Majorly target to the NRI, export audience.<br />
Building Brand Awareness<br />Offline Brand Awareness<br /><ul><li>Provide refrigerators at discounted rates to select retailers who attract large customers. Display the XYZ company advertisements on these refrigerators.
Advertise at hoardings near fast food joints, super markets and malls containing high target group of customers.
Get associated with new fast food restaurants entering domestic market and leverage their brand equity for XYZ frozen products.
Get involved in CSR activities e.g. planting of trees, etc. around your market area to build brand awareness and develop a social positioning for your products.</li></ul>All the above methods are comparatively of a lower cost compared with other traditional advertising forms. If budgets permit :<br /><ul><li>Advertise on newspapers and magazines in proximity to the food section : restaurant reviews, food joint reviews, recipes.</li></li></ul><li>Building Brand Awareness<br />Online Brand Awareness : Social Media Marketing<br /><ul><li>Build a website and have a strong online presence.
Have an online company blog as an interaction with end customers.
Targeted geographic advertising for UK markets through Google Adwords, Facebook ads, Unruly media.
Upload frozen product recipe videos on sites like youtube.com, dailymotion.com. Viral market the frozen good products and increase your brand equity.
Get your frozen foods reviewed on blogs and video reviewed on sites like Freezer Burns
Keep monitoring how your website is faring in terms of traffic, geographical reach, conversion of visitor to customer, etc.. This can be easily done through analytics tools such as Google Analytics.
Keep innovating and improvising your web strategy based on technological and market changes. Let the market drive your changes.</li></li></ul><li>Distribution Issues<br /><ul><li>Current distribution chain of XYZ ineffective for market expansion.
Competition is growing due to use of an effective supply chain. XYZ company is lacking behind.
Need to act fast as competition is spreading fast and establishing their brand presence.</li></ul>Attract Retailers And Wholesalers By Giving Discounts<br />The discounts depend on the annual turnover of the retailer, the cabinet space allocated to XYZ company products, and the frequency and size of deliveries.<br />
Distribution Strategy : The IT Way<br />Goal : An efficient supply chain and excellent customer satisfaction.<br /><ul><li> Learn from past mistakes of competitor who had used RapidBuy.
Maintenance for the online packaging system be given to a reputable company.
Measure various KPI’s (Key performance indicators) using BI reporting tools.
Dashboards should be presentable quickly to management to take corrective/preventive actions on any issues.
Continuously monitor and track reports to ensure leaner processes and principles and move towards a state of improved operational efficiency.</li></li></ul><li>Location Issue <br />Highest poultry is in South India. As the feed ingredients for breeding poultry, corn and soya bean are found highly there. This is followed by West and North India. East India ranks last.<br />Similarly for bread products, raw materials in Northern India is highest.<br />“East India Location A Major Disadvantage”<br />High investment needed to set up a new plant.<br />Suitable location is either North India or West India.<br />Logistics costs 1.5 times competitors. Current logistic costs can be reduced by around 5 cr. yearly if location is shifted to a suitable area.<br />But current financial condition of XYZ not healthy enough to allow to move to West or North India. <br />Shift of location a long term strategy and should be looked at after another 3-5 years for reduction of costs and expanding domestic market.<br />The internet ordering and packaging systems performance will further aid us to determine the need for shift of location <br />
XYZ Company Road Map<br />Objectives <br /><ul><li>Reach turn over of 500 cr. in next 5 years.
Profitable in next 2 years.</li></ul>Key Goals<br /><ul><li>Tap export market ( short term)
Assumptions<br /><ul><li> Each business unit : domestic, institutional and exports functions independently of each other i.e. revenue increase/decrease of one does not affect the other. This is because all the markets are different and assumed to be unrelated to each other.
The XYZ company has a suitable credit rating to get loans from the market, banks, etc.
XYZ’s decision to stay out of the meat manufacturing business is not due to moral or religious reasons.</li></li></ul><li>Appendix<br />Appendix 1 : BCG Matrix from Market Share and Market Growth<br /><ul><li> Appendix 2 : Export Market Potential and expected revenues</li>