The BCG (Boston Consultancy Group) Matrix in the 1970s with an overriding goal in mind, to help organizations differentiate between profitable and non-profitable ventures, developments and innovations. Companies with this knowledge about the market share and growth potential of their product helps the management make calculated investment decisions and provides reasonable facts persuading them to refrain from spending resources on products that are not likely to give favorable results. The BCG Matrix has allowed one to analyze the product portfolio of Cadbury and is presented below:
• Several companies today have certain products which are financially viable for the company and are the reason for the financial success of the company, and these products are regarded as cash cows. These high performing products have resulted in massive market share gains over the years for the company. Once the product reaches maturity, this is the products peak, and therefore further development and success of the product is now skating on thin ice. The cash cows benefit an organization as they provide companies with a continuous stream of sales and capital. The dairy milk line has been a cash cow for Cadbury in the past decades as there was a high demand for chocolate. Present day has seen the situation shift and dairy based sweets and chocolates have lost their place as a cash cow. Recently Cadbury has experienced stable financial growth through Bournvita brand which has created a better sales outlook for the company.
• Products that are referred to in the star category can be differentiated from the cash cows based on the growth potential of the industry and not necessarily the financial success, however, with that said, both do work hand in hand with one another. With or without a significant hold in market share, an industry is periodically growing and is therefore prone to further increases in sales and revenues from the star product. Consequently, to obtain the target of a higher market share, continued production of the star product must take place, which is supported by the high demand from consumers. How then, might one ask, does cash cows and star products complement one another? As star products develop
Hershey’s and Cadburys are moving towards the premium chocolate market through the acquisition or upmarket launches (Zietsma, 2007). The profit potential present in this sector supported by its 20% annual growth rate make it very attractive for large organizations to come forward and avail this opportunity. There is a low threat of new entrants prevailing in this chocolate industry because of the high capital requirements and expected retaliation by current manufacturers. Current players in the industry also possess some barriers to entry for new entrants by maintaining economies of scales with their large production capacity and keeping their product differentiation with their specialized and novelty chocolate products. Even though there are low switching costs and easy access to distribution channels, but still the brand loyalty of the customers including the Rogers’ Chocolate itself make it harder for new firms to come into the competition.
Although Norwalk Division of Chadwick is not dominate the industry of personal consumer products and pharmaceuticals , it earns a high market share and is successful rely on the well –managed and its high quality product . In order to maximum its profit in modern market , a balanced scoredcard can be used to support its “Product differentiation ” strategy .
2. Kraft’s marketing strategy will benefit significantly from buying Cadbury in two different ways. Firstly, when we look at the brand portfolio of Kraft, which is the world’s second biggest food company. It is clear that there are plenty of old-timer cash cows, such as cheese, Nabisco and Suchard, but there are only very few rising stars. According to the Boston Matrix, cash cow means a product with a high share of a slow growth market, which can generate a stable
The strategic issue facing Roger’s Chocolate is how to grow the company by being able to gain new customers and
Cadbury uses market penetration strategies to keep people aware of their brand. They do this all in their current market. They do this by selling more to existing customers, like selling their products in multi-packs. This means that the customers can buy their products in larger quantities and it will encourage them to do so as they can have more of the product instead of buying it individually. They also use product development strategies such as selling new products in an existing market.
1, What are the strategic options for product and/or market development for the organisation? – Ansoff’s product-matrix
The BCG matrix portrays the perspective of the product portfolio, which is the growth-share matrix. This framework of tool categorizes products within a company's portfolio or within the business units as stars, cash cows, dogs, or question marks according to growth rate, market share, and positively or negative cash flow. By using positive cash flows a company can capitalize on growth opportunities. From this analysis, it can be seen that the products that is growing
The premium chocolate industry is having an intensive competition in Canada with the strong growth potential. Industry growth opportunity imposes increasing competition from rivals and threats of new entrance that adds pressure on overall profitability. Even though Roger’s has been able to establish its place in the chocolate industry with its strong brand recognition and products’ quality, it still needs to be on top of ever- going market changes, by continuously
The BCG Matrix composes organizations along two measurements—business development rate and market share. Business development rate relates to how quickly the whole business is expanding. Market share characterizes whether a specialty unit has a bigger or littler share than competitors.The question mark exists in another, quickly developing industry, however has just a little market share. The question mark status in the BCG matrix is dangerous: It could turn into a star, or it could come up short. ConocoPhillips has needed to carve its capital venture through the downturn, going from $17 billion in 2014, to $10 billion in 2015, at last arriving at $5 billion this year. “That’s the amount of transformation you had to make in this
To develop such strategy mix of strategic options will be applied including Integration to deal with competition and Intensive + Diversification strategies for product and market development.
To facilitate the valuation aspect of the analysis, free-cash-flow forecasts are provided in case Exhibit 10 for Hershey as a stand-alone entity. Most students should find it easy to calculate a value for Hershey using the discounted-cash-flow (DCF) method and industry-comparable multiples, which also are provided. As with any valuation case, students must make judgments about the appropriate capital structure, the weighted average cost of capital (WACC), sales growth, and the terminal growth rate. Once students have explored the value drivers for Hershey though sensitivity analysis, they may then evaluate the bids from both Nestlé S.A.–Cadbury Schweppes PLC (NCS) and the Wm. Wrigley Jr. Company. They will want to examine whether the bids are fair from the perspective of HFC shareholders and whether the synergies assumed by the bidders in their offer prices are reasonable.
Industry Analysis: Cadbury Schweppes (CS) is comprised of a global confectionery and beverage company. For the purpose of this case we will maintain our focus on the confectionery business and the assessment of adding to their sugar confectionery portfolio. CS is number three in the beverage business but see the opportunity to become the largest confectionery in the world. The categories are chocolates, sugar and chewing gum. At this time Adams is the number two sized in the gum business. This industry operates on “bigger is better in confectionery”. Their strategic discussions and ambitions appear to stay true, in mentality, to this mantra. This mantra could be potentially dangerous to the business. CS had a presence in over 70
To achieve success and gain approval for the launch of Cadburys confectionary in Poland, an entrance strategy is vital in being able to predict how successful the venture will be for Cadburys. It is in the interests of all stakeholders that a detailed plan is delivered; where shareholders are concerned it helps ensure that there is no capital wasted and that the venture guarantees a return on investment.
This paper critically analyses the past and the current market trend, operations, and marketing strategies of Sainsbury’s Company. Different models of analysis were employed to clearly understand the current and previous state of Sainsbury’s. Some of these models include SWOT analysis, PEST analysis, CORE analysis, Porter’s Five Forces model, Key Success Factors, and Ansoff’s Matrix These models help in understanding all aspects that play a role for the success and the failures of the company that include its strengths, weakness, opportunities, threats, and several factors that bolster of hinders the success of the company. I also looked at deep analysis of the success of introducing “Dark
Some of the critical strengths of Cowgirl Chocolates that determine the success of this small business include product differentiation, quality, flexible return policy, and personalization. Cowgirl Chocolates is very modern creation since it meets the needs of a specific market of spicy and chocolate fans by combining both cayenne, a spice, and chocolate, a sweetener. The business also is known for using premium ingredients in all of the chocolates it offers. The business not only offers a flexible return