Presentation - BCG and GE matrix - Product and Brand Management
- 1. SBU strategies, portfolio analysis, (BCG / GE multifactor matrix) Presented By: Akhilesh Tonpe(38) Mohit Rohera(43) Nikhil Hirani(46)
- 2. Strategic Business Unit A fully functional and distinct unit of a business that develops its own strategic vision and direction. A strategic business unit or SBU operates as an independent entity, but it has to report directly to the headquarters of the organisation about the status of its operation. The best example of SBU are companies like Proctor and Gamble, LG etc. These companies have different product categories under one roof.
- 3. Strategic Business Unit - examples
- 4. Strategies used by Strategic Business Units Cost Leadership: A cost leadership strategy works if the company can produce its products at the lowest cost in the industry. This strategy is commonly used in markets with products that are not distinctly different from each other. Differentiation Strategy: A differentiation strategy requires the company to offer products with unique characteristics that consumers believe have value and are willing to pay more for them. Cost Focus: A cost focus strategy centers on a limited market segment or a particular niche. It requires the company to understand the market and the unique needs of those specific customers. Differentiation Focus: The differentiation focus approach aims for a narrow niche market. In this case, the company finds unique features of its products that appeal to a particular group of customers.
- 5. Portfolio Analysis Strategic portfolio analysis involves identification and evaluation of all products or service groups offered by company on the market and preparing specific strategies for every group according to its relative market share and actual or projected sales growth rate. It can be also used to make strategic decision about strategic business units. Portfolio analysis in strategic management allows to answer key questions how to shape the present and future business portfolio (of product or services) in order to reduce the risk of functioning in a changing environment, and increase the effects of the implemented strategy.
- 6. Methods of portfolio analysis used in strategic analysis Technological portfolio ADL matrix BCG matrix Hofer matrix McKinsey matrix
- 7. BCG Matrix The BCG Matrix, otherwise known as the growth share matrix, is a portfolio management framework that helps companies decide how to strategically manage a portfolio of products or services.
- 8. The Four Quadrants Dog Products: These are products with low growth and market share. Question Mark Products: These products often require significant investment to push them into the star quadrant. The challenge is that a lot of investment may be required to get a return. Star Products: Can be the market leader though require ongoing investment to sustain. They generate more ROI than other product categories. Cash Cow Products: The simple rule here is to ‘Milk these products as much as possible without killing the cow’. Mature, well-established products comes under this category.
- 9. BCG Matrix of Coca Cola Company
- 10. GE McKinsey Matrix The GE/Mckinsey 9 cell matrix, named after General Electronics was first developed by Mckinsey. The objective of this matrix is to assess the industry attractiveness and competitive strength of strategic business units.
- 11. • Patanjali’s Dantkanti, Honey and Ghee operate in the green segment giving the organization opportunities to go ahead and grow & build the product. The green zone pushes an organization for expansion strategies. • Patanjali’s Candy, Fruit juice, and medicines takes place in yellow category signifying that brand should hold the product for some time and makes necessary developments. The yellow area suggests making strategies aimed at maintaining stability. • Patanjali’s Home care category like agarbatti, dish wash bar etc comes under red area due to the presence of other strong competitors. The red segment signifies that company should start harvesting the brand. McKinsey matrix of Patanjali
- 12. Difference between BCG and GE-McKinsey matrix The GE-McKinsey matrix indicates in which Product, Service or Business Unit of your Portfolio it is worth investing. Its purpose is to manage the economic resources of the company. On the other hand, the BCG matrix categorizes products based on their growth potential. It is a more “passive” approach: what you should expect from a product.
- 13. Thank You