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Boston Matrix

Transcript: Bevwire., 2011. Red Bull to discontinue energy shots and cola. [online] [viewed 10th January 2014] Available at:http://bevwire.wordpress.com/2011/07/25/red-bull-to-discontinue-cola-and-energy-shots/ Caffeine Informer., 2014. Top 15 Energy Drinks Brands. [online] [viewed 7th February 2014]. Available at: http://www.caffeineinformer.com/the-15-top-energy-drink-brands Cooper, L & Nakanishi, M., 1988. Market share analysis: Evaluating competitive marketing effectiveness. New York: Springer Publishers Crowe, A., 2010. Business Objective. [online] [viewed 7th January 2014]. Available at:http://www.slideshare.net/Alistercrowe/business-objective J, XU., 2005. Market Research Handbook: Measurement approach and practise. Indiana: IUniverse Publishers Narole, M. 2013. Business strategy and strategic management: BCG matrix. [online] [viewed 13th February 2014]. Available at: http://www.slideshare.net/9579764806/bcg-matrix-with-example Red Bull,. 2014. Red Bull our story. [online] [viewed 16th February 2014]. Available at: www.redbull.co.uk • Most business' start off as question marks • They will absorb great amounts of cash if the market share remains unchanged (low) • Question marks have all the potential to become either star, cash cow, or dog • Investment should be high for question marks RMS= Business unit sales this year/leading rivals sales this year. Relative market share is the share of the market commanded by a firm’s product or brand. Market Growth Rate. The potential to expand production across Asia is a huge opportunities for Red Bull; the expansion would be purely marketing based. This would turn the red bull energy drink back into a star allowing them to experience high growth rates. Tomorrow step's: - Asia (future) - Brazil (Today) - World Cup (Today) - Olympics (Today) - Future X games Massive opportunity for the company. Why Asia is Red Bulls next target market: -India boasts the highest number of 20-24 year olds at 98million - China is at 82million - Indonesia at 21million - A total potential market of 201million in just these 3 parts of Asia Fitting Red Bulls target market perfectly, it would be a huge threat if a competitor were to establish themselves in the Asian market before Red Bull. Developed by Bruce Henderson of the Boston Consulting group in the 1970’s. According to this technique, business or products are classified as low or high performance. This depends on their market growth rate and relative market share. To understand Boston Matrix you need to understand how market share and market growth are interrelated... Dog (Low Growth, Low Market share) Pros & Cons Boston Matrix Relative Market Share. • Stars are leaders in business • They require heavy investment to maintain their large market share • They lead to large amounts of cash consumption and cash generation • Attempts should be made to hold the market share otherwise the star will became a cash cow Cash cow (Low growth, High market share) STAR (High growth, high market share) k Boston Matrix allows Red Bull to profile their products and Identify where each product is in its product life style. Benefits of Red Bull using Boston Matrix. It also allows Red Bull to Identify the cash demands of the product and in turn, through other models such as Ansoff, consider how to grow the business through their existing products; or by the addition of new ones which would become Question Marks. Limitations of Red Bull using Boston Matrix. The Boston Matrix is a Portfolio planning model based on the observation that a companies business unit can be classified into 4 categories -Question Marks (Problem Child) -Stars -Cash Cows -Dogs Boston Matrix The Boston Matrix • Dogs are the cash traps • Dogs do not have potential to bring • High cost – low quality • Business is situated at a declining stage Mission Statement: “To spread our wings over the world” The Boston Matrix is Based on the combination of growth and Market share relative to its competitors Red Bull Problem child / Question mark (High Growth, Low Market share) Only uses two dimensions- relative market share and relative market growth rate. There can be problems gathering data on other companies market share and market growth. High market share does not necessarily mean profit all of the time Business' with low market share can be profitable too. MGR= Individual sales shown in yearly graphs or charts; This years individual sales/ Last years individual sales and so on. Market growth rate is a key indication of the products stage in its product life cycle. Future provision for Red Bull History: Inspired by functional drinks from the Far East, Dietrich Mateschitz founded Red Bull in the mid 1980's. In 1987, on April 1, Red Bull Energy Drink was sold for the very first time in its home market Austria. This was not only the launch of a completely new product; it was, in fact, the birth of a totally new product category. About the can: Today Red Bull is available in more than 165 countries 35

Boston matrix

Transcript: Market Share High High Focus strategy (Washington ) (GYMBABY) Market Growth Narrow Cost leadership Strategy Porter's Generic Strategies (Hess) (Kid Castle) (YOYO) Scope Question mark Differentiation Strategy Stars Dogs Source of competitive advantage Broad Low Low cost Cash Cows It is hoped that by focusing your marketing efforts on one or two narrow market segments and tailoring your marketing mix to these specialized markets, you can better meet the needs of that target market. Uniqueness The Boston Matrix

Boston Matrix

Transcript: Prep - Revise F291 in preparation for a 40 minute examination tomorrow. Reminder - There is a drop in session on every Wednesday afternoon. Any topic or aspect of examination technique can be covered. Other times are available - Just ask. Topics - Measuring a size of business HR Supply/Demand Oligopoly Business Plan Boston Matrix Please get into groups with those who have the same Boston Matrix quarter as you. 2 Mins As a group come up with ideas of products that you think represent the market growth and market share that is typical for your quarter. 4 Minutes Pick a product each to draw and cut out. On the back write whether the market growth and market share is high or low. 7 Minutes High Market Growth Low Market Growth Low Market Share High Market share

Boston matrix

Transcript: 1. Introduction 2. Scheme of the Boston matrix and its elements 3. Applying the Boston Matrix: Strategies Examples 4. Problems with this model Are there any problems with the BCG matrix model? The first problem can be how we define market and how we get data about market share A high market share does not necessarily lead to profitability at all times The model employs only two dimensions – market share and product or service growth rate Low share or niche businesses can be profitable too (some Dogs can be more profitable than cash Cows) The model does not reflect growth rates of the overall market The model neglects the effects of synergy between business units Market growth is not the only indicator for attractiveness of a market Plan: How it can be applied to digital marketing strategies? Boston matrix How it can be applied to digital marketing strategies? • Cash Cows Example: Classic range. Low growth and high market share, the M&S Classic range has strong supporters. STARS Example: Lingerie. M&S was known as the place for ladies underwear at a time when choice was limited. In a multi-channel environment, M&S lingerie is still the UK’s market leader with high growth and high market share. How it can be applied to digital marketing strategies? Applying the BCG Matrix • QUESTION MARKS Example: Food. For years M&S refused to consider food and today has over 400 Simply Food stores across the UK. Whilst not a major supermarket, M&S Simply Food has a following which demonstrates high growth and low market share. Stars: High market growth High market share Cash neutral Hold Question marks: High market growth Low market share Cash absorbing Build Cash cow: Low market growth High market share Cash generating Harvest of milk Dog: Low market growth Low market share Cash neutral Divest How it can be applied to digital marketing strategies? • Dogs Example: Autograph range. A premium priced range of men’s and women’s clothing, with low market share and low growth. Although placed in the dog category, the premium pricing means that it makes a financial contribution to the company. Strategies to apply: • Build market share which means making further investments, • Hold or maintain the same status, • Harvest which means reducing investment, increasing cash flow and maximizing profit, • Divest which usually involves removing dogs and investing in other units such as problem children or stars.

Boston matrix

Transcript: 2. Cash cows: high percentage market share in a low growth market often found in more established markets which and have "reached maturity" often discourages new businesses from joining the market - this means that there isnt as much demand for advertisement, which saves money high proportions of cash cows is ideal for companies seeking high profits companies with cash cows will want to develop new products so that they can enter high-growth markets. What is the Boston Matrix ? 4. Dogs products with low percentage market share in a low-growth market businesses think carefully about maintaining these products because there is little opportunities for profit making - especially in a recession, these products often get forgotten some companies have dogs which still bring in a lot of sales despite having such a low market share 1. Star : high percentage market share in a high grown market competitors will be encouraged to focus on this market stars need a substantial amount of promotion - this means short term they cause a larger outflow of cash than the inflow, but eventually they will bring in enough profit to support the companies other products. 3. Problem children relates to goods or services with a low percentage market share in a high-growth market already competing in a competitive market there are opportunities for future sales even if the product does not increase the market share most companies new products will be problem children when they're first released often needs a large amount of market research - however if these products succeed they're likely to become stars or cash cows Boston matrix The best section would be star as there still at a high rate of market growth and they hold the percentage for the highest market share, hence, they'll have the most customers than all the other segments Best section and why The different types of products identified in the Boston Matrix The Boston Matrix is a tool used by businesses to categorize products into different segments according to the market share of the product and the rate of growth of the particular market in which the product is sold.

Boston Matrix

Transcript: The Boston Matrix Done By: Haitham Mohammed Abdullah Al-Owais Saeed Shuhai Saif Saeed Abdelaziz Abdul. In this presentaion, we would like to present our results and suggestions after deeply studying the data provided by ISCS Tech. As shown in the matrix, Smartphones are the stars. It has a hight market share which is 50%. Its market has a hight growth percentage which is 29%. This definetly makes it a star product on the Boston Matrix. -We suggest that you invest more money and time on this product. -As the time flows and the market matures, this product will eventually turn into a steady source of money (Cash Cow), Smartphone Tablet The tablet is the Problem Child in the Boston Matrix. It has a low market share of 5%. Its market is growing at a very high rate of 37%. We have 2 suggestions for this product. 1- to stop the production of this product as a loss might be taken place because it has a low market share. Since we don't know the cost, we cannot confirm this. 2- To improve this product by conducting more surveys and enhancing more research to adapt to the market and to take in mind the customer's ideas and wants. If the company succeeds, this product will turn into a Star product. Laptop Laptops are the Dogs on the Boston Matrix. They have a very low market share of 15%. Their market growth rate is very low(7%) We suggest that the company has to come up with a strategy to reduce the costs and increase the sales to turn this product into a cash cow as the market already matured. Desktop Desktops are a permanent source of money because they have a high market share of 40 %. They have a very low market growth of 5ri%. This makes Desktops the Cash Cows on the Boston Matrix We suggest that the company keeps the budget for this product as it is a constant cash source for the company. Thank You For Listening First, we would like to present the Boston Matrix of the 4 products.

BOSTON MATRIX

Transcript: weak market share low profit marketing mix it start in 1985 with consulting in marketing and management theories great market share low market profit BOSTON MATRIX cashcows 1-stars 2-cash cows 3-question mark 4-dogs STARS The history of the institution question mark small market share good profit Dogs large market share gaining mor profit

BOSTON MATRIX

Transcript: Khadijaa, Kirsty, Louise, Lucy, Medina and Nathan boston matrix! BOSTON MATRIX What is it? A useful tool for analyzing product portfolio Only a snapshot of the current position. Little or no predictive value. Does not take into account environmental factors. There are flaws which flow from the assumptions on which the matrix is based. MAIN VALUES Market growth is an inadequate measure of a market's attractiveness. Market share is an inadequate measure of a products ability to generate cash. The focus on market share and market growth ignores issues such as developing a sustainable competitive advantages. The product life cycle varies. CRITICISM Low growth products with a high market share. Mature and successful Relatively little need for investment. Need to be managed for continued profit. CASH COW CASH COW EXAMPLES: (Samsung) Washing Machines Fridges Air Conditioners Problem child PROBLEM CHILD Low market share, high market growth. Likely to generate revenue, may become a net consumer as struggles to retain market share. May be unaffordable considering consumer income. EXAMPLE: (SAMSUNG) Printers RISING STAR RISING STAR High market growth and high market share products. Well established and fantastic opportunities. Require heavy investment. EXAMPLES: (Samsung) TV Mobile Phone Tablets Low market growth products with a low market share. Cash neutral Divested - not worth investing in. Often products that have failed (e.g. Amazon's Fire Phone). Usually in maturity stage of the product life cycle. DOGS DOGS EXAMPLE: (Samsung) Smart Watches The Boston Consulting Group ( BCG ) matrix has no consideration of future trends - a major weakness . It is focused purely on the present and not the future. ACTIVITY ACTIVITY (A) CASH COW (C) RISING STAR (D) DOG (B) PROBLEM CHILD High High Low Low Market growth (%) Market Share (%)

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