PRINCIPLE OF MANAGEMENT

BCG MATRIX
ASSIGNMENT #2

PRESENTED TO:
PRESENTED BY:
SAP ID-
COURSE: M.COM
The BOSTON CONSULTING GROUP MATRIX is very well-known analysis tool.

The BCG Matrix is used if there is more than one product in a company’s portfolio.

BCG Matrix Quadrant are:

1) Question mark
2) Star
3) Cash Cow
4) Dog

Question mark:
This product has a high growth rate but a low market share. BCG analysis suggests that there is
no long-term future for this product if it has only a small market share. Suppliers who have
large market shares have much greater economies of scale and could easily dominate the small
supplier.

Star:
If the quest by the Question mark products for high market share is successful, the product will become
a star. This isn’t as good as it sounds. Although now they have a high market share ,because now having
one of the highest market shares, and highest profiles, competitors will be trying to steal market share
from this firm. If the market has a high growth rate this product is perceived as a product with a future
and many companies will be anxious to get a large share of the action.

Cash Cow:
The initially high growth rate of products will always slow down, perhaps to zero or even
becoming negative as a declining market. The product then becomes a cash cow. It’s a cash cow
because firm still have a high market share ,Because this is now perceived as an old product,
competitors will not be keen in stealing market share . Essentially they leave them alone.
Therefore firm will enjoy high cash inflows without having to spend a lot on promotion, or
research and development, or defending there market share.
Dog:
Cash cow products do not turn into dogs! This is a product which has a low growth rate and
firm don’t have much of a market share. There is no point spending time effort and money
achieving a high market share in an old product. So best decision is to close down the
production facilities or try to sell them to another company.

I am choosing Nestle organization and performing BCG Matrix Analysis and

placing its product in different quadrants according to my knowledge.

Question Mark:
● Nestle Chocolates can be placed in the Question Mark quadrant of the BCG Matrix of
Nestle. Because of high competition and small market share of the product in the
industry.

Star:
● Nestle Mineral Water and Nestle Nescafe Coffee fall in the Star quadrant of the
BCG Matrix of Nestle.

Cash Cow:
● For Nestle, there is one product that has undoubtedly been the Cash Cow and it is
Nestle Maggi Noodles. Maggi Noodles holds a very strong hold in the market and
have high customer loyalty.

Dog:
● Nestle Milo was launched as mix of chocolate powder, Milk and water. However, the
product failed to create any big impact on the business and is placed in the Dog
Quadrant of BCG Matrix of Nestle.