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8/14/2019 Mahindra n Mahindraa
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BCG MATRIX
Boston consulting group (BCG) matrix is developed
by Bruce Henderson of the Boston consulting group in
the early 1970s
It provides a graphic representation
According to this matrix, business could be classified
as high or low
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Relative Market Share
Market Growth Rate
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BCG Matrix
High Low
Relative Market Share
High
Low
10%
8%
6%
4%
2%
0
12%
14%
16%
18%
20%
| | | | | | | | | | | | | | | |10 4 2 1. 5 1 0.5 0.4 0.3 0.2 0.1
Star Question Mark
Cash Cow Dog (Cash Traps)
1
2
3
4
5
67
8
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STARS High growth, High market share Stars
Leaders in business.
They also require heavy
investment, to maintain its largemarket share.
It leads to large amount of cash
consumption and cash generation.
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CASH COWS Low growth , High marketshare
They are foundation of the
company and often the stars
of yesterday.
They generate more cash than
required.
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DOGSLow growth, Low market share
Dogs are the cash traps.
Dogs do not have potential to
bring in much cash.
Business is situated at a declining
stage.
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QUESTION MARKS High growth , Low market
Most businesses start of as question
marks.
They will absorb great amounts of
cash if the market share remains
unchanged, (low).
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WHY BCG MATRIX ?
To assess : Profiles of
products/businesses.
The cash demands ofproducts .
The development cycles of
products.
Resource allocation anddivestment decisions
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BENEFITS BCG MATRIX
It is simple and easy to understand.
It helps you to quickly and simplyscreen the opportunities open to
you, and helps you think abouthow you can make the most ofthem.
It is used to identify howcorporate cash resources can best
be used to maximize a companysfuture growth and profitability.
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LIMITATIONS BCG MATRIX
It uses only two dimensions.
High market share does not
mean profits all the time.
Business with low market
share can be profitable too.
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SBU (Mahindra Spares BusinessUnit OF M M Tractors
Two Wheelers
Utility Vehicles
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PLACE OF TRACTOR
Market share of M&M = 29% (Market Leader)
2 nd largest player is Tafe group (messy tractor)
Market share of Tafe group = 23% .
RMS of M&M Tractor = 1.26x
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10%
12%
14%
16%
18%
20%
8%
6%
4%
2%
0%
0
.1
x0
.2
x
1x
0
.5
x0
.4
x0
.3
x
10x
4x
2x
BusinessgrowthRate
Relative Market share
http://images.google.co.in/imgres?imgurl=http://www.the-aps.org/education/sixstarscience/images/star_hg_clr.gif&imgrefurl=http://www.the-aps.org/education/sixstarscience/index.htm&h=350&w=350&sz=98&hl=en&start=1&usg=__9F2mqYWPLQz02f8MtJrP-LGth6o=&tbnid=dVZnU7Ol_pZeNM:&tbnh=120&tbnw=120&prev=/images?q=Star&gbv=2&hl=enhttp://images.google.co.in/imgres?imgurl=http://www.taurangaboatsales.co.nz/uploads/images/Art%20Text/Green%20Question%20mark.jpg&imgrefurl=http://www.taurangaboatsales.co.nz/&h=320&w=304&sz=9&hl=en&start=7&usg=__Vqz3vv0aQ9fJV_SJNCWD4LAQjEc=&tbnid=3VgDMoM_z16TCM:&tbnh=118&tbnw=112&prev=/images?q=question+mark&gbv=2&hl=en&sa=Ghttp://images.google.co.in/imgres?imgurl=http://www.sustainabletable.org/blog/archives/cash%20cow.jpg&imgrefurl=http://www.sustainabletable.org/blog/?m=200611&h=144&w=216&sz=59&hl=en&start=16&usg=__peX80hboFJDZ3xfmeSXcEYco3Nc=&tbnid=uc7P_VNxGME8gM:&tbnh=71&tbnw=107&prev=/images?q=cash+cows&gbv=2&hl=enhttp://images.google.co.in/imgres?imgurl=http://www.doggonebizzy.com/images/sad_dog.jpg&imgrefurl=http://www.doggonebizzy.com/wst_page3.html&h=479&w=500&sz=118&hl=en&start=5&usg=__tMJrla81ESmpHRqF3WmE2hid5lQ=&tbnid=blWuZhsleF6iSM:&tbnh=125&tbnw=130&prev=/images?q=sad+dog&gbv=2&hl=en8/14/2019 Mahindra n Mahindraa
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PLACE OF TWO WHEELERS
Market Share of M&M two Wheelers = 1%
Market Share of Hero Honda = 52%
RMS of M&M two wheelers = 0.02x
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10%
12%
14%
16%
18%
20%
8%
6%
4%
2%
0%
0
.1
x0
.2
x
1x
0
.5
x0
.4
x0
.3
x
10x
4x
2x
Businessg
rowthRate
HIGH
LOWTR
ADITIONALBCG
MATRIX
Relative Market share
http://images.google.co.in/imgres?imgurl=http://www.the-aps.org/education/sixstarscience/images/star_hg_clr.gif&imgrefurl=http://www.the-aps.org/education/sixstarscience/index.htm&h=350&w=350&sz=98&hl=en&start=1&usg=__9F2mqYWPLQz02f8MtJrP-LGth6o=&tbnid=dVZnU7Ol_pZeNM:&tbnh=120&tbnw=120&prev=/images?q=Star&gbv=2&hl=enhttp://images.google.co.in/imgres?imgurl=http://www.taurangaboatsales.co.nz/uploads/images/Art%20Text/Green%20Question%20mark.jpg&imgrefurl=http://www.taurangaboatsales.co.nz/&h=320&w=304&sz=9&hl=en&start=7&usg=__Vqz3vv0aQ9fJV_SJNCWD4LAQjEc=&tbnid=3VgDMoM_z16TCM:&tbnh=118&tbnw=112&prev=/images?q=question+mark&gbv=2&hl=en&sa=Ghttp://images.google.co.in/imgres?imgurl=http://www.sustainabletable.org/blog/archives/cash%20cow.jpg&imgrefurl=http://www.sustainabletable.org/blog/?m=200611&h=144&w=216&sz=59&hl=en&start=16&usg=__peX80hboFJDZ3xfmeSXcEYco3Nc=&tbnid=uc7P_VNxGME8gM:&tbnh=71&tbnw=107&prev=/images?q=cash+cows&gbv=2&hl=enhttp://images.google.co.in/imgres?imgurl=http://www.doggonebizzy.com/images/sad_dog.jpg&imgrefurl=http://www.doggonebizzy.com/wst_page3.html&h=479&w=500&sz=118&hl=en&start=5&usg=__tMJrla81ESmpHRqF3WmE2hid5lQ=&tbnid=blWuZhsleF6iSM:&tbnh=125&tbnw=130&prev=/images?q=sad+dog&gbv=2&hl=en8/14/2019 Mahindra n Mahindraa
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PLACE OF UTILITY VEHICLES
Market Share of M&M Utility Vehicle = 42%(Market Leader)
Market Share of Tata Motors in UV = 21%
RMS of M&M Utility Vehicle = 2x
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APPROPRIATE STRATEGIES
TRACTORS (STAR)
HOLD STRATEGY (Invest toprotect)
Build capacity expansion
Increase investment
Increase advertisement andpromotion
Increase market reach
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CONT
TWO WHEELERS (QUESTION MARK ?)
Exceptional case (Money hogger)
Product is in early stage Try to build it and turn in to STAR
Invest intensively
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CONT
UTILITY VEHICLES (CASH COW)
HOLD STRATEGY (INVEST TO PROTECT)
Increase advertisement and promotion Increase market reach Increase Investment
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CONCLUSION
SBU M&M mkt
Share (a)
Largest
CompetitorMkt. share
(b)
X = a/b
TRACTORS 29% 23% (TAFE) 1.26
TWO WHEELERS 1% 52% (HEROHONDA)
0.02
UTILITYVEHICLES
42% 21% (TATAMOTORS)
2.00
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