NAME : MUHAMMAD WASIM

ID : 12742
SECTION : A
ASSIGMENT NO 1.
PRINCIPAL OF MARKETING
BOSTAN CONSULTING GROUP (BCG}
Nestle PRODUCT:
Nestlé’s products include baby food, medical foods, bottled water,
breakfast cereals, coffee and tea, confectionery, dairy, ice cream, frozen
foods, pet food, and snacks. Twenty-nine of Nestlé’s brands have annual
sales of over CHF1 billion (about US$1.1 billion), including Nespresso,
Nescafé, Kit Kat, Smarties, Nesquik, Stouffer’s, Vittel and Maggi. Nestlé
owns 447 factories, operates in 189 countries and employs about
339,000 people. Nestlé is one of the major shareholders of L’Oreal, the
world’s largest cosmetics company.

BCG Matrix of Nestle :

BCG Matrix of Nestle contains the Dogs, Stars, Cash Cows, and the
Question Mark. In this reading of the BCG Matrix of Nestle, we will
analyse the company’s low growth products, products that attract sales,
high growth products, and products that may attract sales or may
become low growth products in future.
DOGS:
Dogs are the products that were thought to have the potential to grow
but were unable to work any magic due to slow market growth.

The failure to produce the expected results makes the product a source of
loss for the company and causes the management to withdraw future
investments in the company. With no significant return on investment
expected from the product, future investments are seen as a waste of
company resources that could instead be invested in a question mark or
star category.

Nestle’s Milo was launched as a chocolate and malt powder for milk and
water. However, the product did not have a significant impact on the
business and is placed in the dog quadrant of Nestle’s BCG matrix.

STARS:

The products or business units that have a high market share in a high-
growth industry are the stars of the company. In Nestle’s case, Nestle’s
mineral water and Nestle’s Nescafe coffee fall into the star quadrant of
Nestle’s BCG matrix.

The growing trend towards healthier lifestyles and emerging markets has
led the brand to invest heavily to differentiate itself from competitors in
mature markets and increase brand awareness in emerging markets.
CASH COWS:

Cash cows are those products that have a high market share in a low
growth market. For Nestle, there is one product that is undoubtedly a
cash cow and that is Nestle’s Maggi Noddles. With a market share of 80-
85%, Maggi Noddles has a very strong position in the market and has
high customer loyalty.

The product requires very little investment to maintain its market share
and fend off competition.

QUESTION MARK

There are products that formulate a part of the industry that is still in the
development stage, and yet the company has not been able to establish a
significant position in this industry. Due to the small market share that
the company has achieved, the future prospects for the product are
uncertain and therefore investing in such areas is considered a risky
decision.

With increasing competition and the growing need for consumers to

consume healthy products, the Nestle brand needs to make significant
investments in the dairy and nutrition sector in order to maintain and
grow its market share.

Nestle’s chocolates and confectionery is another business unit that can be

classified in the question mark quadrant of Nestle’s BCG matrix. The high
competitive pressure and low market share of the product in the industry lead it
to be placed in this quadrant.