Mahindra n Mahindraa

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=en


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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=en


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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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Mahindra n Mahindraa