The ppt gives details info about BCG Matrix as well as Product Life Cycle.
The ppt project is on study of Automobile industry, done during my MBA (M.U).
To Create Your Own Wig Online To Create Your Own Wig Online
Product life cycle (PLC) & Boston Consultancy Group (BCG) MBA ppt
1. PRESENTED TO
PROF. RAFANA KAZI
FROM: PRATIK THAKKAR (MMM-14)
ALLANA INSTITUTE OF MANAGEMENT STUDIES
CG MATRIX & PRODUCT LIFE CYCLE OF
MAHINDRA & MAHINDRA
2. BOSTON CONSULTING GROUP (BCG) MATRIX is
developed by BRUCE HENDERSON of the
BOSTON CONSULTING GROUP IN THE EARLY
1970’s.
According to this technique, businesses or products
are classified as low or high performers depending
upon their market growth rate and relative market
share.
3. It is a portfolio planning model which is based
on the observation that a company’s business
units can be classified in to four categories:
Stars
Question marks
Cash cows
Dogs
It is based on the combination of market growth
and market share relative to the next best
competitor.
5. The Boston Matrix
The Boston Matrix:
◦ A means of analysing the product portfolio and informing
decision making about possible marketing strategies
◦ Developed by the Boston Consulting Group – a business
strategy and marketing consultancy in 1968
◦ Links growth rate, market share and cash flow
6. The Boston Matrix
Classifies Products into four simple categories:
Stars – products in markets experiencing
high growth rates with a high or increasing share
of the market
- Potential for high revenue growth
7. The Boston Matrix
Cash Cows:
◦ High market share
◦ Low growth markets –
maturity stage of PLC
◦ Low cost support
◦ High cash revenue –
positive cash flows
8. Dogs:
◦ Products in a low growth
market
◦ Have low or declining
market share (decline
stage of PLC)
◦ Associated with negative
cash flow
◦ May require large sums
of money to support
The Boston Matrix
Is your product starting to
embarrass your company?
9. Problem Child:
- Products having a
low market share in a
high growth market
- Need money spent to
develop them
- May produce
negative cash flow
- Potential for the
future?
The Boston Matrix
Problem children – worth spending
good money on?
10. Mahindra Group is one of the largest corporate
groups of India. It is a US $6.3 billion conglomerate
with employee strength of over 50,000.
It is ranked amongst Forbes Top 200 list of the
World's Most Reputable Companies and in the Top
10 list of Most Reputable Indian companies.
11. The origin of Mahindra group can be traced back
to Oct 2, 1945, when Mahindra brothers J.C.
Mahindra & K.C. Mahindra joined hand with
Ghulam Mohammad, there after Mahindra &
Mohammad was set up as a franchise of
assembling JEEPS from WILLYS, USA.After
independence of India in 1947 , Mahindra &
Mohammad changed its name to Mahindra &
Mahindra.
12. Automobiles
Farm equipment
Trade & finance
Infrastructure
IT
Other specialty business
13. Mahindra Automobiles have a strong
and growing presence in international
markets
◦ Yugoslavia,
◦ Bangladesh
◦ Sri Lanka
◦ Australia
◦ Uruguay
◦ South Africa in 2004 (Mahindra South Africa)
◦ Europe in 2005 (Mahindra Europe)
15. AMGR of Tractor industry = 18%
Market share of M&M = 29% (Market Leader)
2nd
largest player is Tafe group (messy tractor)
Market share of Tafe group = 23%
RMS of M&M Tractor = 1.26x
23. Product Life Cycle
Product Life Cycle – shows the stages that
products go through from development to
withdrawal
from the market
Product Portfolio – the range
of products a company has in development or
available for consumers at any one time
Managing product portfolio
is important for cash flow
24. Product Life Cycles
Product Life Cycle (PLC):
◦ Each product may have a different life cycle
◦ PLC determines revenue earned
◦ Contributes to strategic marketing planning
◦ May help the firm to identify when
a product needs support, redesign, reinvigorating,
withdrawal, etc.
◦ May help in new product development planning
◦ May help in forecasting and managing cash flow
25. Product Life Cycles
The Stages of the Product Life Cycle:
◦ Development
◦ Introduction/Launch
◦ Growth
◦ Maturity
◦ Saturation
◦ Decline
◦ Withdrawal
26. Product Life Cycles
The Development Stage:
Initial Ideas – possibly large number
May come from any of the following –
◦ Market research – identifies gaps in the market
◦ Monitoring competitors
◦ Planned research and development (R&D)
◦ Luck or intuition – stumble across ideas?
◦ Creative thinking – inventions, hunches?
◦ Futures thinking – what will people be
using/wanting/needing 5,10,20 years hence?
27. Product Life Cycles
Product Development: Stages
◦ New ideas/possible inventions
◦ Market analysis – is it wanted? Can it be produced at a
profit? Who is it likely
to be aimed at?
◦ Product Development and refinement
◦ Test Marketing – possibly local/regional
◦ Analysis of test marketing results and amendment of
product/production process
◦ Preparations for launch – publicity, marketing campaign
28. Product Life Cycles
Growth:
◦ Increased consumer awareness
◦ Sales rise
◦ Revenues increase
◦ Costs - fixed costs/variable costs, profits may be made
◦ Monitor market – competitors reaction?
29. Product Life Cycles
Maturity:
◦ Sales reach peak
◦ Cost of supporting the product declines
◦ Ratio of revenue to cost high
◦ Sales growth likely to be low
◦ Market share may be high
◦ Competition likely to be greater
◦ Price elasticity of demand?
◦ Monitor market – changes/amendments/new strategies?
30. Product Life Cycles
Saturation:
New entrants likely to mean market is ‘flooded’
Necessity to develop new strategies becomes more pressing:
◦ Searching out new markets:
Linking to changing fashions
Seeking new or exploiting market segments
Linking to joint ventures – media/music, etc.
◦ Developing new uses
◦ Focus on adapting the product
◦ Re-packaging or format
◦ Improving the standard or quality
◦ Developing the product range
31. Product Life Cycles
Decline and Withdrawal:
◦ Product outlives/outgrows its usefulness/value
◦ Fashions change
◦ Technology changes
◦ Sales decline
◦ Cost of supporting starts to rise too far
◦ Decision to withdraw may be dependent on availability of
new products and whether fashions/trends will come
around again?
32. Product Life Cycles
SALES
Development Introduction Growth Maturity Saturation Decline
35. The Product Life Cycle and the
Boston Matrix
SALES
Time
A
B
C
D
The product
portfolio – four
products in the
portfolio
(1)
(1) ‘A’ is at
maturity stage –
cash cow.
Generates funds for
the development of
‘D’
(2)
(2) Cash from ‘B’
used to support
‘C’ through growth
stage and to
launch ‘D’. ‘A’ now
possibly a dog?
(3)
(3) Cash from ‘C’
used to support
growth of ‘D’ and
possibly to finance
extension strategy
for ‘B’?
Importance of
maintaining a
balance of products
in the portfolio at
different stages of
the PLC – Boston
Matrix helps with the
analysis
37. TWO WHEELERS (WEEK ?)
Exceptional case (Money hogger)
Product is in early stage
Try to build it and turn in to STAR
Invest intensively
FINDINGSFINDINGS
38. • UTILITY VEHICLES (STRONG CASH COW)
HOLD STRATEGY (INVEST TO PROTECT)
Increase advertisement and promotion
Increase market reach
Increase Investment
SUGGESTIONSSUGGESTIONS