portfolio Analysis through BCG model

                             

                      BCG MODEL

BCG Model can be used to identify the current strength and weaknesses of the portfolio and that is used to analysis the decisions are made about selection,prioritation and alignment for build a balance among risk and performance of any strategic Business Units.

For instance, Let's we discusses how global energy drink  like  Red bull product portfolio based on BCG model.

                                                                                                                                                                                                                                                

                               

                                        RED BULL PRODUCT PORTFOLIO

Cash cows (High relative market share, Low market growth)

In this sector is expressed the mature or saturation phase of strategic business units in Red Bull company.The Red Bull regular and Sugar free products are became as the cash cow of their business and those SBUs have good cash flow and high profit. In this quadrant due to low market growth there   none or small investments is needed.

Question marks (Low relative market share, High market growth)

In this sector SBU s have low relative market share with attractive markets and growth rate. The Red Bull Total Zero product has become as question mark in Red Bull business. Due to low relative market share there is needed to have financial support to boost Red Bull’s Total Zero product from question mark to star. Therefore it is needed to use cash cows quadrant cash flow to question mark quadrant and convert them into stars. For instance, they can invest cash flow of cash cows for promotion campaigns and market researches to promote their product which has high market growth rate.

Stars (High relative market share, High market growth)

In this quadrant SBU s have high relative market share and market growth. The Red Bull editions has become as star in Red Bull business. As a renowned company Red Bull has to invest more money to sustain their star quadrant SBU’S position. Therefore they can invest cash for product modification and innovations to sustain their position. Another important thing is this quadrant market is growing at a fast rate. Therefore it is needed to invest more cash for create entry barriers for new entrance, increase the capacity according to the demand and increase the customer awareness for the product. The Red Bull can be used the cash flow of cash cow to invest capacity management and market activities of stars. Because sustaining the current star position is the most essential strategy to optimize the company profit and revenue.

Any type of company holding or sustaining the current star position strategy is the most suitable one for earn highest possible revenue from a star quadrant.

 

Dog (Low relative market share, Low market growth)

In this quadrant has a low relative market share and growth rate and expressed the decline phase of a market. The Red bull cola has become as dog in Red Bull business. Another important thing is particular product/brand which is nominated as star also can convert in to dog due to the poor effort on holding or sustaining the current position, lack of attention on new entrants. Those points are directly affected to reduce the relative market share and market growth.

The recommended strategy for a product or brand which is placed in dog quadrant is divestment.  Because by using divestment strategy any type of company can invest more capital on the markets which having a high growth rate and can use the company resources and capabilities to generate more revenue to the business.