BCG Matrix of ITC
BCG Matrix also known as the growth-share matrix is used by organizations to classify their business units or products into 4 different categories: Dogs, Stars, Cash Cows and Question Mark.
Growth rate of an industry and the market share of a respective business relative to the largest competitor present in the industry are taken as the basis for the classifications, for that reason, BCG Matrix is also called as Growth-Share Matrix.
These are the products with low growth or market share
These are low growth or low market share products and have very few chances of showing any growth.
The investment strategy for these products has to be very well thought through by the management as there are chances that these businesses might not yield any profit for the organization.
These business units or products are cash traps and therefore are not seen as a useful source of earning.
These are the products which are in low growth markets with high market share.
Products which are market leaders in their specific industry and their industry is not expected to see any major growth in the future are considered as Cash Cows.
These products are the money churners for the company and require very low investments to sustain their leadership and profitability in the market.
These are the products which are in high growth markets with a high market share.
Products or Business Units which hold a high market share and are also considered to grow in the future are positioned as Stars.
As a result, companies are interested to invest in developing these units further to gain a larger market share and attain a stronger position in the market.
These products have the potential of being positioned as cash cows in the future owing to the industry growth prospects.
Products in high growth markets with a low market share.
Products or business units of the company that are still in the nascent stage of their product lifecycle and can either become a revenue generator by taking the position of a Star or can become a loss-making machine for the company in the future.
The industry has high potential to grow hence giving the room to the products to grow as well only if the pertinent issues are managed effectively.
Let’s check out the BCG Matrix of ITC and what products of the company fall under what Quadrant.
Cashcows are the products that have a high market share in a market that has low growth. For ITC, there is one product that has undoubtedly been the Cash Cow and its FMCG Cigarettes.
Having a market share of 80-85 %, ITC Cigarettes holds a very strong hold in the market.
The product requires very less investment to maintain its market share and fight off any competition.
High market share product in high growth industry are considered Stars of the organization.
ITC’s paperboard and packaging business, Agribusiness and Hotels are the Stars of the organization.
There are products that formulate a part of the industry that is still in the phase of development, yet the organization has not been able to create a significant position in that industry. The small market share obtained by the organization makes the future outlook for the product uncertain, therefore investing in such domains is seen as a high-risk decision.
With stiff competition and the growing demand for ayurvedic products has prompted ITC to go back to the drawing board, invest in R&D and look out for improvements in their products
ITC’s FMCG business, Personal Care business, are placed in the Question Mark quadrant of the BCG Matrix of ITC.
Decreasing market share due to new entrants to the market and the introduction of new ayurvedic products and their growing demand are the main reasons that these business units have become Question Marks.
Dogs are those products that were perceived to have the potential to grow but however failed to create magic due to the slow market growth.
Failure to deliver the expected results makes the product a source of loss for the organization, propelling the management to withdraw future investment in the venture. Since the product is not expected to bring in any significant capital, future investment is seen as a wastage of company resources, which could be invested in a Question mark or Star category instead.
ITC Infotech a specialized global full service IT consulting & outsourcing solutions provider focused on creating value for Supply Chain based Industries etc.
Heavy competition from the likes of Infosys, TCS, Accenture, HCL etc have led to a decrease in the market share of ITC Infotech and made it tough for the organization to survive in such tough market scenario.
Read about the Brand Positioning of Samsung and understand its Segmentation, Targetting and Positioning
Learn about the Positioning of Apple and understand its Segmentation, Targetting and Positioning
What is Marketing Mix of Apple and how it’s helping in creating worlds most valuable brand?
What is the Marketing Mix of Amul?
Understand the Marketing Mix of Google and its 4ps of Marketing Mix.
Learn the BCG Matrix of Samsung and understand different business units which fall under different quadrants.
Learn the BCG Matrix of Nestle and understand different business units which fall under different quadrants.
Check out the BCG Matrix of Apple
What is the Marketing Mix of Nike
What is Marketing Mix of Samsung
Check out the Marketing Mix of Adidas
Learn more about the 4ps of Marketing Mix
Understand the BCG Matrix of Amul