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ASSIGNMENT NO.

2
BCG MATRIX ANALYSIS OF:
NESTLE
PEPSI
BY: SUMBUL MUGHAL
BCG ANALYSIS OF NESTLE

BCG MATRIX
STARS QUESTION MARK

CASH COWS DOGS


1. STARS
The products or business units that have a high market share in
high growth industry are the stars of the organization. In the case of
Nestle, Nestlé’s Mineral Water and Nestlé’s Nescafe Coffee fall in
the Star quadrant of the BCG Matrix of Nestle. Growing healthier
lifestyle trends and emerging markets have prompted the brand to
invest large amounts of investments in order to differentiate the
bottled water brands from competitors in mature markets and
grow brand awareness in emerging markets.

2. QUESTION MARK ?
There are products that formulate a part of the industry that is still
in the phase of development, yet the organization has not been
able to create a significant position in that industry. Nestle’s
Chocolates and confectionaries is a business unit that can be
placed in the Question Mark quadrant of the BCG Matrix of Nestle.
High competition and small market share of the product in the
industry is what makes it place in this quadrant.

3. CASH COWS

Cash cows are the products that have a high market share in a market
that has low growth.  For Nestle, there is one product that has
undoubtedly been the Cash Cow and its Nestlé’s Maggi Noodles.
With a market share of 80-85 %, Maggi Noodles holds a very strong
hold in the market and have high customer loyalty.
The product requires very less investment to maintain its market share
and fight off any competition.

4. DOGS

Dogs are those products that were perceived to have the potential to
grow but however failed to create magic due to the slow market growth.
Failure to deliver the expected results makes the product a source of loss
for the organization, propelling the management to withdraw future
investment in the venture. Nestlé’s Milo was launched as chocolate and
malt powder for Milk and water; however, the product failed to create
any significant impact on the business and is placed in the Dog Quadrant
of BCG Matrix of Nestle.
BCG ANALYSIS OF PEPSI

BCG MATRIX

STARS QUESTION MARK

CASH COWS DOGS


1. STARS
In the case of PepsiCo, Pepsi falls in the Star quadrant of the BCG
Matrix of Pepsi. Because of stiff competition from Coca-Cola and
changing customer preferences towards healthy and low-calorie
drinks, Pepsi is seeing a shift from STAR quadrant to Dogs
quadrant. Aquafina is the brand which can be placed in star
quadrant, Aquafina holds 15% of bottled water market share and is
second to Bisleri which has 36% market share.

2. QUESTION MARK ?
There are products that formulate a part of the industry that is still
in the phase of development, yet the organization has not been
able to create a significant position in that industry. Diet Pepsi was
launched with an aim to help PepsiCo regain their market share but
failed to capture the desired response from the customers and one
of the major reasons for that was tough competition from Diet
Coke.

3. CASH COWS

Cash cows are the products that have a high market share in a
market that has low growth. For Pepsi, Frito Lays is undoubtedly
the Cash Cow for the company.  Frito Lays dominates the savory
snacks market in the U.S with a 36.6% market share. The next
biggest manufacturers in this sector are Kellogg’s and Mondelez
with much smaller 7% and 5.6% share respectively.

4. DOGS

Seeing Pepsi in Dog quadrant will shock a lot of people but


considering the present and future scenario, Pepsi will see a shift
from Star to Dog quadrant. Pepsi’s has dropped from 10.3% to
8.4%. Declining carbonated soft drinks segment share due to
increasing demand for low calorie and healthy beverages and
snacks is what is attributing the diminishing sales of Pepsi brand.

SUMMITTED TO: SIR MASROOR


DATE: 22/7/2019