Growth matrix structure

B.C.G. (this analysis was originally developed by the Boston Consulting Group in the 1960s) analysis or Growth Matrix Structure is a technique used in brand marketing, product management, and strategic management to help a company decide what products to add to its product portfolio. It involves rating products according to their market share and market growth rate. The products are then plotted on a two dimensional map. Products with high market share but low growth are referred to as ‘cash cows’. Products with high market share and high growth are referred to as ‘stars’. Products with low market share and low growth are referred to as ‘dogs’ and should usually be discontinued. Products with low market share but high growth are referred to as ‘question marks’ or ‘problem children’ or ‘wild cats’. The technique can also help companies think about the priority and resources that they should give to the different businesses in their portfolio. A ‘question mark’ has the potential to become a ‘star’ in the future if it is developed. A company should have a balanced portfolio. This implies having at least one ‘cash cow’ which can generate revenue that can be used to develop one or more ‘question marks’. This process is referred to as ‘milking your cash cow’.

►Explain B.C.G. analysis in the form of a scheme or chart.

►Team up with your classmate. Think of a well-known and familiar company with a wide product line (a group of related products intended to be used for similar purposes or be sold in similar types of shops) under a household brand. Rate these products according to their market share and market growth rate by placing each in the B.C.G. scheme or chart that you devised for ‘B.C.G.’ Point. Now with the help of the other teammates decide what products would you add to the company’s product portfolio and what ‘maneuvers’ would you follow to have a more balanced portfolio.

‘SHOW-1’ POINT

Nike does not sell sports shoes. IBM does not sell computers. Nokia does not sell mobile phones. Harley-Davidson does not sell motorcycles. Starbucks does not sell coffee. Club Med does not sell vacations. And Guinness does not sell beer. Then what do they sell and what do we buy?

►Comment enthusiastically (!) on the given companies, using specific reasons and examples from your own experience, observations, or reading. Give a small talk. Use your initiative! And don’t hesitate to root for your performance by using visual aids.

‘THEORY-5’ POINT

Branding is simple. Branding is impossible.

An extract from Re-imagine by Tom Peters

(1) Branding is not about marketing tricks. It is about answering a few simple (and yet impossible) questions:

WHO ARE YOU?

WHY ARE YOU HERE?

HOW ARE YOU UNIQUE?

HOW CAN YOU MAKE A DRAMATIC DIFFERENCE?

And the most important WHO CARES? (DO YOU CARE?) (Starting point.)

WHO ARE YOU? (I really wanna know)

The top management of a Giant American Company invited me to speak with them. They had experienced a couple of decades of exceptional growth, and it seemed to be slowing. Employee morale, surveys showed, was slipping a bit, resulting in higher than usual turnover. Their formerly awesome customer service ratings were a bit wobbly. No, the world hadn’t come to an end, but it was suddenly (to them) ‘uncertain’. And talented, brass-knuckled competition with an investment cache to die for made the issue even more worrisome and urgent.

I studied like hell. Talked to customers. Talked to vendors. Talked to front-line employees. I had but three hours to spend with the Top 50, and my pride and professionalism insisted that I make each moment count. The first half was to be a presentation; I’d parade my ‘insightful’ PowerPoint slides for 90 minutes. Then we’d talk for the second half of the ‘show’.

As usual, I was suffering from pre-presentation insomnia. It was 4 a.m. The speech would begin at 7 a.m. And, yes, I had those slides ready … 127 of them. I thought. I fretted. And then I did something strange: I deleted 126 of the 127 slides. Just one remained. It read:

‘WHO ARE YOU [THESE DAYS]?

The company had made several acquisitions in the last half-dozen years. Though I’m publicly avowed enemy of most big acquisitions, I had no complaint with what this firm had done; each purchase had filled a gaping hole in its portfolio, relative to its most powerful competitors. But somewhere … somehow … the firm’s True Identity seemed to have slithered away, deep into the bushes. So I said: ‘You can have your fee back if you want, but we’re going to spend the entire three hours talking about ‘WHO ARE YOU?’