BOSTON CONSULTING GROUP MATRIX (Matteo Biagini) To make the Boston Consulting Group matrix regarding our company, Bank Pekao, we have choosen to show where the brand is positioned respect one of our main competitors: PKO Bank Polski. The first action was to collect data about market share of Bank Pekao and PKO. We considere four of the main businesses that Pekao offers: retail  loans,  corporate  loans,    retail  savings,  corporate  savings.  To  collect  data  we  used  the  financial  reports  of  the  year  2013  of  Bank  Pekao  and  PKO.  About loans and deposits Pekao is the market leader in Poland. So all the values about market share are a little bit higher than PKO.  Pekao has the 24% of market share in retail loans, the 17% in corporate loans, 13% in corporate deposits and 22% in retail deposits. Instead PKO has the 19% of market share in retail loans, the 13% in corporate loans, 21% in corporate deposits and 10% in retail deposits. To find the relative market share that is the Pekao’s relative share to its largest competitor(PKO) we used the formula: relative market share =1 + log (own business unit share/competitor’s business unit share). We can see thanks to this where Pekao is positioned aginst PKO. Thanks to financial reports was also easy to find data about revenue volume and market growth rate. To find the market growth rate we applied the formula: Market growth rate= (market revenues t1 – market revenues t0) x 100/market revenues t0. Following the data and BCG matrix.  PKO  market  share:                                                                                                                                                                            retail loans 19% corporate loans 13% retail deposit 21% corporate deposit 10% Pekao Market share: retail loans 24% corporate  loans  17%  retail  deposit    22%  corporate  deposits  13%    Relative  market  share:   retail loans 1,101 corporate  loans  1,116  retail  deposit    1,02  corporate  deposits  1,113            

 Revenue  volume  pekao:                                                                                                    retail  loans        44,475  mln  PLN  corporate  loans                                    65,077  mln  PLN  retail  deposits                                              67,828  mln  PLN  corporate  deposits                            71,444  mln  PLN                                                                        Market  growth  Pekao  rate:                                    Retail  loans                                      +9,9%  Corporate  loans                        +3,8%  Retail  deposits                              +4,8%  Corporate  deposits            +13,4%                                                                        20              MARKET  GROWTH                                                                                                          10                                                                        0                                               10                                                                                        1                                                                                                          0,1                      

   

   

RELATIVE MARKET SHARE

RL  

CL  

CD  

RD  

Thanks to the graph, we can see the situation in the market of Bank Pekao is not so bad. All the products we analyzed are positionated in a good position in the matrix. Retail deposit(RD) and corporate loans(CL) are all “Cash Cows“: the growth is quite low but these elements have anyway an high market share. Bank Pekao don’t need any investment promotion or placement campains for these products. It means that the market is mature. Interesting is also the position of retail loans and corporate deposits. In this case the market growth is higher and goes from the 9,9% of retail loans to 13,4% of corporate deposits. These products can be considered stars. They have an high market growth and an high market share. So for Bank Pekao in these two fields is suggested an high level of investments but not forgetting support, promotion and placement. Anyway we can consider these such a good products because there is an high level of profits(especially in corporate deposits) and if market share is kept, Stars are likely to grow into Cash Cows. References: http://www.pekao.com.pl/?s,main,language=EN http://www.rns-pdf.londonstockexchange.com/rns/5961A_2-2013-3-21.pdf http://www.pkobp.pl http://www.pkobp.pl/pkobppl-en/investor-relations/financial-reports/ In particular, both Mobile unit and Fixed voice unit, are in the „Cash Cows“ square; this means that for both the units the growth rate is low (infact we have 2% for Mobile and 4% for Fixed voice), but the market share of Orange in this two sector is high: a little higher for Mobile unit that is around 27% respect to T-Mobile that has 26%; clearer is the situation of Fixed voice where Orange holds a good part of the market with 42%, and its main competitor only 28%. Having a quite high shares in business units characterized by a low market growth rates, it means that Orange polska doesn’t need for more investments and promotion in these two sectors, because its positions are already relevant and advantageous and the low level of growth in their respective markets shows that it would not have more opportunities in these markets, that are already mature. As we can see from the dimensions of the two circles, these situations let Orange polska record high profits (1584 Mio for Mobile unit, 543 Mio for Fixed voice unit), these are infact the two main sources of profit for the company. Analysing the third business unit taken into account, Broadband, we can see in the graph that it settles in the „Stars“ square. Infact this unit records a quite high market share 33% (it means one-third of the market, instead T-Mobile has 23%), but also with a high growth rate in this unit (around 12%). This situation on one side is similar to the previous units settled in „Cash Cows“ square, infact all three business units have an high market share, but on the other side Broadband unit is the only one with also an high market growth rate. This means that in this case Orange polska should invest more and continue to support the promotion of its product, because the market is not still mature and the profit margin could be even higher than the current. The real challenge of Orange in this situation is to face the high growth of this business unit, trying to mantain an high market share compared to the competitors, and particularly its main one, T-Mobile. If our company succeeds in doing this, its Broadband unit will likely grow from „Stars“ into „Cash Cows“ square, ensuring still high profits to Orange, but, now, in a mature market.