'Bcg on Hul Essay\r'

'Once you acknowledge which occupancyes domiciliate where in your business portfolio, you also come to know which businesses need enthronisations, which necessitate harvesting ( qualification money), which needs divesting (reducing investment) and which needs to be exclusively outputn push through of the business portfolio. For a major organization corresponding HUL, ITC etc which take a shit multiple categories and within the categories, they wee multiple lines of fruits; the BCG abstract becomes really important. At a holistic level, they lead to make a decision on which crop to continue and which proceedsion to be divested.\r\nWhich carre foursome rear end interpret newfangled returns with substantially investment, and which products atomic number 18 stretch the apex of securities industry component part. BCG Growth Sh atomic number 18 intercellular substance †The BCG maturation shargon intercellular substance was developed by Henderson of the BC G group in 1970? s. The matrix classifies businesses / SBU’s by 1) Relative grocery store Sh are †The food tradeplace make do of the business / SBU / Product in the trade as compared to its competitors and general product / category. 2) Market ontogenesis gait †The exploitation target of the industry as a whole is taken into consideration from which the reaping commit of the product is extrapolated.\r\nThis growth wander is then toss on the graph. thusly by having 2 raw material but at the same magazine very important factors on X axis and Y axis, the BCG matrix makes sure that the classifications are concrete. Calculating the Market growth lay out comprises of both industry growth and product growth rate thereby adult a fair knowledge of where the product / SBU stands in comparison to the Industry. The merchandise role on the early(a) hand comprises of the competition and the product potential in the filthet.\r\n gum olibanum when we consider growth rate and market share together, it automatically gives us an overview of the competition and the industry standards as well as an idea of what the forthcoming capacity bring for the product. Once the businesses puzzle been classified, they are placed into four different quadrants of the matrix. The quadrants of the matrix are divided into 1) Cash cattle †High market share but let out growth rate (most profitable). 2) Stars †High market share and High growth rate ( extravagantly competition) 3) distrust marks †diminished market share and blue growth rate (uncertainty) ) Dogs †Low market share and woeful growth rate (less profitable or may even be oppose profitability) On the basis of this classification, strategies are distinct for all(prenominal) SBU / Product. Let’s discuss the characteristics and strategies of each quadrant in detail. Explanation: 1) Cash Cows †The cornerstone of all multi product business, gold moo- appals are products which are having a high market share in a low suppuration market. As the market is non growing, that currency cow earns the upper limit advantage by generating maximum revenue enhancement out-of-pocket to its high market share.\r\nThus for any high society, the specie cows are the ones which require to the lowest degree investment but at the same while give high returns. These higher returns enhance the overall profitability of the firm because this excess revenue thunder mug be used in other businesses which are Stars, Dogs or Question marks. In the show window of HUL avocation are the Cash cows like visual sense Soaps, Beverages, oral examination care and Laundry which are runway very well in the market today, Oral and Mass soap today is doing very good hence it is the coin cows for HUL today.\r\nStrategies for cash cow †The cash cows are the most abiding for any business and hence the strategy broadly includes retention of the market share. As the market is not growing, acquirement is less and retention is high. Thus client satisfaction programs, loyalty programs and other much(prenominal) promotional methods form the core of the marketing plan for a cash cow product / SBU. 2) Stars †The best product which comes in mind when thinking of Stars is the telecommunication products.\r\nIf you watch at any top 5 telecom social club, the market share is good but the growth rate too is good. Thus because these two factors are high, the telecom companies are always in militant mode and they urinate to juggle between investment and harvesting vis investing money and taking out money time to time. Unlike cash cows, Stars hobonot be complacent when they are top on because they flock immediately be overtaken by another caller-out which capitalizes on the market growth rate. However, if the strategies are successful, a Star can become a cash cow in the long run.\r\nJust like the products from HUL like Hair condole with products, Skin Care products, Premium Soaps & Laundry products, Deodorants and it’s recently write brand Water (PureIt) Strategies for Stars †All types of marketing, gross revenue promotion and advertising strategies are used for Stars. This is because in cash cow, already these strategies have been used and they have resulted in the formation of a cash cow. withal in Stars, because of the high competition and rising market share, the concentration and investment needs to be high in marketing activities so as to augment and retain market share. ) Question Marks †some(prenominal) times, a company susceptibility come up with an innovative product which immediately gains good growth rate. However the market share of such a product is unknown. The product big businessman lose customer interest and might not be bought any longer in which case it will not gain market share, the growth rate will go down and it will ultimately become a Dog. On the other hand, th e product might sum up customer interest and more and more pack might buy the product thus making the product a high market share product. From here the product can move on to be a Cash Cow as it has lower competition and high market share.\r\nThus Question marks are products which may give high returns but at the same time may also flop and may have to be taken out of the market. This uncertainty gives the quadrant the name â€Å"Question Mark”. The major line of work associated with having Question marks is the amount of investment which it might need and whether the investment will give returns in the end or whether it will be completely wasted. Processed foods and Color Cosmetics are few of the Question Marks for HUL since it is very rare found in the market ascribable to the reason that it is not fully grown results as much expected in the consumer market today.\r\nStrategies for Question marks †As they are new entry products with high growth rate, the growth r ate needs to be capitalized in such a manner that question marks turn into high market share products. New Customer acquisition strategies are the best strategies for converting Question marks to Stars or Cash cows. Furthermore, time to time market look also helps in determining consumer psychology for the product as well as the possible future of the product and a hard decision might have to be taken if the product goes into cast out profitability. ) Dogs †Products are classified as dogs when they have low market share and low growth rate. Thus these products neither generate high amount of cash nor require higher investments. However, they are considered as negative profitability products mainly because the money already invested in the product can be used someplace else. Thus over here businesses have to take a decision whether they should divest these products or they can revamp them and thereby make them saleable once more which will subsequently increase the market sh are of the product. Dogs for HUL are its Sea Products which is definitely and alarm for HUL to pour down it.\r\nStrategies for Dogs †Depending on the amount of cash which is already invested in this quadrant, the company can either divest the product altogether or it can revamp the product through rebranding / innovation / adding features etc. However, moving a dog towards a star or a cash cow is very difficult. It can be go only to the question mark part where again the future of the product is unknown. Thus in cases of Dog products, divestment strategy are used. Sequences in BCG intercellular substance [pic] winner Sequence in BCG Matrix †The Success episode of BCG matrix happens when a question mark becomes a Star and eventually it becomes a cash cow.\r\nThis is the best time which really gives a shape up to the company’s profits and growth. The success sequence unlike the disaster sequence is entirely bloodsucking on the right decision making. Disaster s equence in BCG Matrix †Disaster sequence of BCG matrix happens when a product which is a cash cow, due to competitive pressure might be moved to a star. It fails out from the competition and it is moved to a question mark and finally it may have to be divested because of its low market share and low growth rate. Thus the disaster sequence might happen because of wrong decision making.\r\nThis sequence affects the company as a lot of investments are doomed to the divested product. Along with this the money coming in from the cash cow which is used for other products too is lost. Results on the strategies for HUL based on the BCG Matrix. There are four strategies possible for any product / SBU and these are the strategies which are used after the BCG analysis. These strategies are 1) Build †By increasing investment, the product is given an impetus such that the product increases its market share. Example †Pushing a Question mark into a Star and finally a cash cow (Succe ss sequence) ) Hold †The company cannot invest or it has other investment commitments due to which it holds the product in the same quadrant. Example †dimension a star there itself as higher investment to move a star into cash cow is currently not possible. 3) Harvest †vanquish observed in the Cash cow scenario, wherein the company reduces the amount of investment and tries to take out maximum cash flow from the said product which increases the overall profitability. 4) Divest †Best observed in case of Dog quadrant products which are generally divested to release the amount of money already stuck in the business.\r\n'