BCG’s Business Portfolio Analysis
Fig. 1. The BCG matrix.
Coca-Cola Company is a good example that can be used to elaborate on the operation of BCG business portfolio. The company is effective as it operates in various product lines, all related to soft soda. The brands of soft drinks include Coke, Fanta, Krest, and Stoney.
Coke brand is the star for Coca-Cola. It is the biggest brand for the company and has the largest market share in the world. Coke also produces the highest level of revenue for the company. The Coca-Cola Company can, therefore, comfortably survive on the brand even when the market for the other brands shrinks (Mohajan 2017). The best strategy to maintain the position of the profitable brand could be market development, where customers are enhanced on the benefits of Coke more than any other brand.
Fanta is a cash cow for the company. It occupies a significant market share across the world and comes second to Coke. However, it operates in a low market growth box. It provides enough cash to keep the company ‘on its toes’. It is a source of money for the company in the long run. Market penetration is the best strategy to apply to push Fanta to the stars box. This calls for the penetration of new markets that have not been occupied.
Stoney brand is the dog for the company. The product line attracts a slow market growth and low market share. The company makes losses while investing in the product. There is a need for market penetration to increase market share. There is also a need for horizontal integration to increase the rate of market growth.
Krest takes the position of question marks. This is a brand that has a high rate of market growth but has low market share. Penetration would help such a brand to increase the market share, and therefore, push towards a cash cow.
Current Trends and Formative Forces
Various trends have an impact on marketing. The tendencies will have affect marketing today, five years, and even ten years later. Some of the significant ones include social and technological trends.
Social Trend: Personalization of Products and Communication. The mode of marketing is shifting to the personalization of products to meet the individual needs of the customers. This will determine the number of clients that a firm will win and those that it will lose. Also, businesses prefer addressing customers at personal levels, and therefore, reaching them through personal means such as emails. This will impact marketing today and ten years later. Customers will prefer firms that accord their needs a special hearing. They will want their requirements to be addressed at a personal level rather than being generalized in the market.
Technological Trend: Mobile Communications. The mode of communication has applied paid adverts in the past. Many of the organizations have used paid media to reach more significant markets. However, technology has made it possible for many people to own personal phones. Firms have shifted their mode of marketing to telemarketing. Many of them prefer sending text messages to their customers as well as interacting with them over social media (Hamilton 2017). Direct communication has enhanced immediate feedback on the parts of the firm and the consumers. The trend may not stop anytime soon. Technology is changing daily. More firms will have to engage in mobile marketing with their customers in the next five to ten years to ensure that they retain their market share.
Hamilton, James F. “A New Take on Digital Advertising: Theory, History, and Society.” Advertising & Society Quarterly, 18.1 (2017).
Mohajan, Haradhan. “An Analysis on BCG Growth Sharing Matrix.” (2017): 1-6.