Taking A Look At The BCG Matrix

BCG Matrix

The Boston Consulting Group (BCG) Matrix known as the Growth Share Matrix or 2 by 2 Matrixes and it allows a multidivisional organization to manage its portfolio of businesses by examining the relative market share position and the industry growth rate of each division relative to all other divisions in the organization.

The relative market share defined as: Relative market share position defined as the ratio of a division’s own market share or revenues in a particular industry to the market share or revenues held by the largest rival firm in that industry.

The relative market share is an indicator of an organization’s business strength because a high market share indicates that the organization has high-accumulated volume

This idea select based on the product life cycle concept which suggests that when a business is in the growth stage, there is a great potential in attracting other people to join in the business, particularly when the growth rate is increasing at an increasing rate. The demarcation between low and high market growth rate can be based on the average growth rate in the industry, or GNP growth rate, or a weighted average of all the growth rates in multi-businesses in a particular country. BCG recommended a 10% rate of growth because that was the growth rate of the American economy at that time. In Malaysia, one may choose 7% to 9% as reasonable growth rates as the Malaysian GNP growth rate was in that range in the last

Accordingly, PepsiCo is consisted of 5 major brands: Gatorade, Quaker, Pepsi products, Frito-Lay and Tropicana. As mentioned the assessment has been based on each products provided by the company. With this, it shows that the products that belong to the question mark are Gatorade and also Tropicana. Because of the emergence of different healthy drinks and beverages in the global market, the market share of Tropicana and Gatorade are being threatened. Although these brands have already established in the marketplace, the company still needs to have an effective marketing approach to increase the sale of these brands or brands. Accordingly, question mark category means that these products have a low share of a possible high growth market and may become a star product because of the positive response of the customers. The services that fall in star category are is the pay-is Pepsi brands. The star category shows the products with a high share of a gradual growth of market and these products have a tendency to produce high amount of profits. The next category that can be seen in the figure is the cash cows. Herein, the products are considered to have a high share of a slow growth market (2005). With regards to the PepsiCo, services that can be considered in the cash cows are the Quaker. Lastly, it can be seen that Tropicana, Gatorade and Frito-Lay are products that can be considered in the