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AU ENT 430 - BCG MATRIX COCA-COLA

Course: Ent 430-
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Useh 1Uyai Lizamay UsehENT 430Dr. Farouk Musa13/11/20 CLASSIFICATION OF COCA-COLA DRINKS IN THE BCG MATRIX “The BCG matrix is defined as a “is a planning tool that uses graphical representations of a company’s products and services in an effort to help the company decidewhat it should keep, sell, or invest more in.” (Hayes, 2020). It was created by Bruce Henderson in 1968, to help organisations analyse their portfolio or product/services lines.” “The BCG Matrix describes products on two main sections. On the Y- Axis, it shows the “Market Growth” of various products/services while; on the X-Axis, it shows the “Market Share” of the various Products/Services. Furthermore, the matrix is divided into four sections; the Star, the Question Mark, the Cash Cow and finally; the Dog or Pet.” “The Stars are products who have fast market growth and a large market share in the industry. They consume a lot of investments for their production, but they also make a lot of profit from sales.” “The Question Marks also referred to as Problem Child are products who; have rapid market growth but they, don’t have a large market share in the industry. They consume a lot of money and time in production, but they make less profit than required/ expected.” “The Cash Cows are products which have low market growth, but high market share. They consume fewer resources in production than Stars, and they make large profits for the firm. They are mostly sold milked to finance Stars.” “The least on the matrix are the Dogs. Also referred to as Pets, they have low market share and market growth. They don’t consume resources in production, and they don’t make much profit either, they usually break even. Most of the time, they end up being Cash Traps for the company/business, and should be sold, liquidated or improved upon.” “For the company in this assignment; Coca-Cola, the products chosen to be analysed are;Coke, Fanta, Sprite and Schweppes.”Useh 2 “Coke is a cash cow product for the Coca-Cola Company. Being the first drink produced in the coca cola company, it has become popular, and amassed a large customer base and loyalty. Sold in over 200 countries worldwide and with a large profit from sales, coke has accumulated a vast market share and thus become a large profit making product for the Coca-Cola Company. The profits from Coke are used to finance Stars and Question marks of the Coca-Cola Company.” “The question mark products in the Coca-Cola Company are Fanta and Sprite. They are not become as popular and loved as Coke, so they have less market share and more market growth than coke. This means that they generate less profit than coke, while using more investments and resources in production. Most of their financing comes from the constant high profits Coke makes. They can however become Stars, if the Coca-Cola Company improves the marketing strategies of this product. For e.g. they could improve their features, price, promotion strategies, etc.” “Schweppes is the Dog of the Coca-Cola Company’s BCG Matrix. It has neither the large market growth nor large market share to become a STAR, CASH COW or QUESTION MARK product of Coca-Cola Company. They are not popular in the market; they lack a large customer base, so they don’t sell/make profit as much as Coke, Fanta and sprite do. They alsodon’t require many resources in their production, or promotion/advertisement strategies, sincethey have a low market base. They may upgrade to question marks if the Coca-Cola Company uses better market strategy for them. E.g. Promotion, product and price strategy.” “In this assignment; there is no STAR product but, the Coca-Cola company has Star products namely: The Kinley and Dasani bottled water, and the Maaza fruit drink. Water is very important for the body; there has been a growing need for clean bottled water by consumers and customers. The Maaza fruit drink is being widely sought because of it ingredients and has a large customer base in the Middle East, Africa, Eastern Europe and Asia. Kinley has a large consumer base in Asia and Europe, while Dasani has a large customer base in the US and UK.” “The Coca-Cola Company has been able to use their marketing strategies to successfully gather a large customer base for these products, while still using a large amount of cash and resources to produce them. Profits from Coke (the cash cow), are often used to finance their production and delivery.” “In conclusion, the BCG Matrix is used to help companies decide what goods or services they should sell, keep or invest in. They’re four groups in the matrix namely: The Star, the Question mark, The cash cow, and the Dog. In this assignment, Coke is the Cash cow, Fanta and Sprite are the Question Marks, and Schweppes is the Dog. There is no Star in the list of drinks provided for discussion in this assignment.”Useh


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