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Sinhgad Collage of Commerce <ul><li>Subject- Strategic Management </li></ul><ul><li>Topic  - BCG MATRIX </li></ul><ul><li>...
INDEX <ul><li>Definition </li></ul><ul><li>History </li></ul><ul><li>Diagram & its Explanation </li></ul><ul><li>Strategic...
AKNOWLEDMENT <ul><li>I WOULD LIKE TO THANK TO MY COLLEGE , MY BMS CO-ORDINATOR PROF. RITIKA HEMDAVE AS WELL AS TO PROF.VIJ...
GROUP MEMBERS 30 VIJAY MOURYA 43 BHAVESH SINGH 33 ATUL PATHAK 23 RAKESH MALPEDI SIGNITURE ROLL NO. NAME
WHAT IS BCG MATRIX ? <ul><li>BCG Growth share matrix developed by Boston consulting group of USA and popularly known as BC...
History <ul><li>In 1970,  Bruce Henderson  of Boston Consulting Group {BCG} created a chart for the corporation to analyse...
BCG Growth - Share Matrix
Stars <ul><li>Stars are the unit with a high market share in a fast growing industry. </li></ul><ul><li>Star represent the...
Cash Cows <ul><li>A cash cow is a product or a business unit that generates unusually high profit margins. </li></ul><ul><...
Question Marks <ul><li>Question Marks are the units with low market share in a fast growing industry. </li></ul><ul><li>Th...
Dogs <ul><li>Dogs often have little future and are big cash drainer on the company. </li></ul><ul><li>Generating cash just...
Strategic Implication Of BCG MATRIX <ul><li>BCG Matrix helps in determining the competitive advantage of each SBU  </li></...
Advantages <ul><li>Diversification with sustainable profits. </li></ul><ul><li>Allocation of Scarce Resources of the compa...
Disadvantages <ul><li>Other important dimensions which are also significant apart from relative market share and growth ra...
BCG OF M&M INTRODUCTION <ul><li>Mahindra Group is one of the largest corporate groups of India. It is a US $6.3 billion co...
SBU OF M&M   <ul><li>Tractors </li></ul><ul><li>Two Wheelers </li></ul><ul><li>Utility Vehicles </li></ul>
Place of Tractor <ul><li>AMGR of Tractor industry = 18% </li></ul><ul><li>Market share of M&M = 29% (Market Leader) </li><...
10% 12% 14% 16% 18% 20% 8% 6% 4% 2% 0% 0.1x 0.2x 1x 0.5x 0.4x 0.3x 10x 4x 2x Business growth Rate TRADITIONAL BCG MATRIX R...
Place of Two Wheelers <ul><li>AMGR of two wheelers industry = 12% </li></ul><ul><li>Market Share of M&M two Wheelers = 1% ...
10% 12% 14% 16% 18% 20% 8% 6% 4% 2% 0% 0.1x 0.2x 1x 0.5x 0.4x 0.3x 10x 4x 2x Business growth Rate HIGH LOW TRADITIONAL BCG...
Place of Utility Vehicles <ul><li>AMGR of Utility vehicle industry = 8.7% </li></ul><ul><li>Market Share of M&M Utility Ve...
10% 12% 14% 16% 18% 20% 8% 6% 4% 2% 0% 0.1x 0.2x 1x 0.5x 0.4x 0.3x 10x 4x 2x Business growth Rate TRADITIONAL BCG MATRIX R...
Conclusion SBU AMGR M&M mkt Share (a) Largest Competitor Mkt. share (b) X = a/b TRACTORS 18% 29% 23%  (TAFE) 1.26 TWO WHEE...
10% 12% 14% 16% 18% 20% 8% 6% 4% 2% 0% 0.1x 0.2x 1x 0.5x 0.4x 0.3x 10x 4x 2x Business growth Rate HIGH LOW TRADITIONAL BCG...
APPROPRIATE STRATEGIES <ul><li>TRACTORS  (STAR) </li></ul><ul><li>HOLD STRATEGY (Invest to protect)  </li></ul><ul><ul><li...
CONT… <ul><li>TWO WHEELERS (QUESTION MARK ?) </li></ul><ul><li>Exceptional case (Money hogger) </li></ul><ul><li>Product i...
CONT… <ul><li>UTILITY VEHICLES (CASH COW) </li></ul><ul><li>HOLD STRATEGY (INVEST TO PROTECT) </li></ul><ul><ul><li>Increa...
CONCLUSION <ul><li>Though BCG MATRIX has its limitations it is one of the most FAMOUS AND SIMPLE portfolio planning matrix...
Reference <ul><li>www .Google. com </li></ul><ul><li>Strategic Management- by Anita Bo bade </li></ul><ul><li>www.  Wikipe...
 
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Bcg matrix

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Bcg matrix

  1. 1. Sinhgad Collage of Commerce <ul><li>Subject- Strategic Management </li></ul><ul><li>Topic - BCG MATRIX </li></ul><ul><li>Class – SYBMS </li></ul><ul><li>Submitted to – Prof. Vijay Kapoor </li></ul>
  2. 2. INDEX <ul><li>Definition </li></ul><ul><li>History </li></ul><ul><li>Diagram & its Explanation </li></ul><ul><li>Strategic Implication </li></ul><ul><li>Advantages & Disadvantages </li></ul><ul><li>BCG OF M&M </li></ul>
  3. 3. AKNOWLEDMENT <ul><li>I WOULD LIKE TO THANK TO MY COLLEGE , MY BMS CO-ORDINATOR PROF. RITIKA HEMDAVE AS WELL AS TO PROF.VIJAY KAPOOR .FOR GIVING SUCH KIND OF OPPORTUNITY FOR DOING THIS PROJECT OR PRESENTATION . </li></ul>
  4. 4. GROUP MEMBERS 30 VIJAY MOURYA 43 BHAVESH SINGH 33 ATUL PATHAK 23 RAKESH MALPEDI SIGNITURE ROLL NO. NAME
  5. 5. WHAT IS BCG MATRIX ? <ul><li>BCG Growth share matrix developed by Boston consulting group of USA and popularly known as BCG Matrix takes a two dimensional views. </li></ul><ul><li>Industry growth rate. </li></ul><ul><li>Relative market share. </li></ul>
  6. 6. History <ul><li>In 1970, Bruce Henderson of Boston Consulting Group {BCG} created a chart for the corporation to analyses their business units {products and brands} on the basis of their relative market share and industry growth rate. </li></ul><ul><li>The terms in the BCG Matrix like Stars, Cash Cows, Question marks, Dogs became commonly used terms in business meetings as they became very popular. </li></ul>
  7. 7. BCG Growth - Share Matrix
  8. 8. Stars <ul><li>Stars are the unit with a high market share in a fast growing industry. </li></ul><ul><li>Star represent the best profits and growth opportunities in the organizations. </li></ul><ul><li>Generates high revenues and also requires huge cash for sustaining the STAR position. </li></ul><ul><li>Product is in growth stage. </li></ul><ul><li>For e.g.: Nescafe, caracal. </li></ul>
  9. 9. Cash Cows <ul><li>A cash cow is a product or a business unit that generates unusually high profit margins. </li></ul><ul><li>They are the business with low growth rate and high market share. </li></ul><ul><li>Generating cash more than its requirement which can be used by other units. </li></ul><ul><li>Product in maturity Stage. </li></ul><ul><li>For e.g.: Maggie Noodles </li></ul>
  10. 10. Question Marks <ul><li>Question Marks are the units with low market share in a fast growing industry. </li></ul><ul><li>They required large amount of cash to grow their market share. for e.g.: Promotional expenses. </li></ul><ul><li>They have the potential to generate profits and achieve a dominant position in market. </li></ul><ul><li>Product is in introduction stage, in a fast growing market. </li></ul><ul><li>For e.g.: kit Kat, Nestle butter &milk etc. </li></ul>
  11. 11. Dogs <ul><li>Dogs often have little future and are big cash drainer on the company. </li></ul><ul><li>Generating cash just to BREAK-EVEN. It is a self sustaining unit. </li></ul><ul><li>They do not generate any profit for the overall business and hence can be sold off and hired off. </li></ul><ul><li>Product is in decline stage, with no chance of revival. </li></ul><ul><li>For e.g.: Nestea, Milky Bar, Munched etc. </li></ul>
  12. 12. Strategic Implication Of BCG MATRIX <ul><li>BCG Matrix helps in determining the competitive advantage of each SBU </li></ul><ul><li>BCG Matrix will work when: </li></ul><ul><li>Market of each Division / SBU is well defined. </li></ul><ul><li>Relative market share is an indication of an SBU’s competitive position. </li></ul><ul><li>Market growth, cash investment and profits of the SBU are positively co-related. </li></ul>
  13. 13. Advantages <ul><li>Diversification with sustainable profits. </li></ul><ul><li>Allocation of Scarce Resources of the company. </li></ul><ul><li>Higher profits and Growth rates </li></ul><ul><li>Raising Equity Capital only when necessary. </li></ul>
  14. 14. Disadvantages <ul><li>Other important dimensions which are also significant apart from relative market share and growth rate are the product life cycle, presence of competitive advantage, etc. </li></ul><ul><li>Long term profitability is influenced to a great extent by controlling costs and overheads. </li></ul><ul><li>Value of a business is often linked to other factors like synergy, competitive advantage etc </li></ul><ul><li>Instead of 4 cells there should be 6 cells –high, medium and low. </li></ul>
  15. 15. BCG OF M&M INTRODUCTION <ul><li>Mahindra Group is one of the largest corporate groups of India. It is a US $6.3 billion conglomerate with employee strength of over 50,000. </li></ul><ul><li>It is ranked amongst Forbes Top 200 list of the World's Most Reputable Companies and in the Top 10 list of Most Reputable Indian companies. </li></ul>
  16. 16. SBU OF M&M <ul><li>Tractors </li></ul><ul><li>Two Wheelers </li></ul><ul><li>Utility Vehicles </li></ul>
  17. 17. Place of Tractor <ul><li>AMGR of Tractor industry = 18% </li></ul><ul><li>Market share of M&M = 29% (Market Leader) </li></ul><ul><li>2 nd largest player is Tafe group (messy tractor) </li></ul><ul><li>Market share of Tafe group = 23% </li></ul><ul><li>RMS of M&M Tractor = 1.26x </li></ul>
  18. 18. 10% 12% 14% 16% 18% 20% 8% 6% 4% 2% 0% 0.1x 0.2x 1x 0.5x 0.4x 0.3x 10x 4x 2x Business growth Rate TRADITIONAL BCG MATRIX Relative Market share
  19. 19. Place of Two Wheelers <ul><li>AMGR of two wheelers industry = 12% </li></ul><ul><li>Market Share of M&M two Wheelers = 1% </li></ul><ul><li>Market Share of Hero Honda = 52% </li></ul><ul><li>RMS of M&M two wheelers = 0.02x </li></ul>
  20. 20. 10% 12% 14% 16% 18% 20% 8% 6% 4% 2% 0% 0.1x 0.2x 1x 0.5x 0.4x 0.3x 10x 4x 2x Business growth Rate HIGH LOW TRADITIONAL BCG MATRIX Relative Market share
  21. 21. Place of Utility Vehicles <ul><li>AMGR of Utility vehicle industry = 8.7% </li></ul><ul><li>Market Share of M&M Utility Vehicle = 42% (Market Leader) </li></ul><ul><li>Market Share of Tata Motors in UV = 21% </li></ul><ul><li>RMS of M&M Utility Vehicle = 2x </li></ul>
  22. 22. 10% 12% 14% 16% 18% 20% 8% 6% 4% 2% 0% 0.1x 0.2x 1x 0.5x 0.4x 0.3x 10x 4x 2x Business growth Rate TRADITIONAL BCG MATRIX Relative Market share
  23. 23. Conclusion SBU AMGR M&M mkt Share (a) Largest Competitor Mkt. share (b) X = a/b TRACTORS 18% 29% 23% (TAFE) 1.26 TWO WHEELERS 12% 1% 52% (HERO HONDA) 0.02 UTILITY VEHICLES 8.7% 42% 21% (TATA MOTORS) 2.00
  24. 24. 10% 12% 14% 16% 18% 20% 8% 6% 4% 2% 0% 0.1x 0.2x 1x 0.5x 0.4x 0.3x 10x 4x 2x Business growth Rate HIGH LOW TRADITIONAL BCG MATRIX Relative Market share
  25. 25. APPROPRIATE STRATEGIES <ul><li>TRACTORS (STAR) </li></ul><ul><li>HOLD STRATEGY (Invest to protect) </li></ul><ul><ul><li>Build capacity expansion </li></ul></ul><ul><ul><li>Increase investment </li></ul></ul><ul><ul><li>Increase advertisement and promotion </li></ul></ul><ul><ul><li>Increase market reach </li></ul></ul>
  26. 26. CONT… <ul><li>TWO WHEELERS (QUESTION MARK ?) </li></ul><ul><li>Exceptional case (Money hogger) </li></ul><ul><li>Product is in early stage </li></ul><ul><li>Try to build it and turn in to STAR </li></ul><ul><li>Invest intensively </li></ul>
  27. 27. CONT… <ul><li>UTILITY VEHICLES (CASH COW) </li></ul><ul><li>HOLD STRATEGY (INVEST TO PROTECT) </li></ul><ul><ul><li>Increase advertisement and promotion </li></ul></ul><ul><ul><li>Increase market reach </li></ul></ul><ul><ul><li>Increase Investment </li></ul></ul>
  28. 28. CONCLUSION <ul><li>Though BCG MATRIX has its limitations it is one of the most FAMOUS AND SIMPLE portfolio planning matrix ,used by large companies having multi-products. </li></ul>
  29. 29. Reference <ul><li>www .Google. com </li></ul><ul><li>Strategic Management- by Anita Bo bade </li></ul><ul><li>www. Wikipedia . com </li></ul><ul><li>www. Dog pile. com </li></ul><ul><li>5. www. M&M . com </li></ul>

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