BCG Matrix of Samsung | BCG Matrix Analysis of Samsung

BCG Matrix of SAMSUNG

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

                                                                                                                Dogs

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.

Cash Cows

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.

Star

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.

Question Mark

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.

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Let’s check out the BCG Matrix of Samsung and what products of the company fall under what Quadrant.

Cash Cows:

Samsung Home appliances which include Samsung AC’s, Refrigerators, Washing Machines and Cooking Appliances are the Cash Cows for the company.

Over the years, Samsung Home Appliances have become a household name and stand for quality and trust. Samsung has been able to attain a good market share across different industry segments and still holds a good potential to grow in the coming future.

stars:

The products or business units that have a high market share in high growth industry are the stars of the organization. In the case of Samsung, Mobile phones, Tab, and TV business fall in the Star Category of the BCG Matrix of Samsung.

Mobile phones: Samsung Galaxy and Note Series are quite a hit among customers and have their own base of loyal customers. In order to maintain its market share and ward off the competition, Samsung launches new smartphones with new features and design.

Samsung TV:  LED and OLED TV from Samsung are gaining good traction from the global market and can be considered as the Stars of the company. The company is experimenting with new technologies and it coming up with new TV’s with technologically advanced features to gain customers.

Question Mark:

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.

Considering the performance of all the products that Samsung to offer, Samsung Printer is one such product which can be placed in the Question Mark quadrant of the BCG Matrix of Samsung.

High competition and small market share of the product in the industry is what makes it place in this quadrant.

DOGS:

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.

With an aim to cater to the growing need of the digital world, Samsung launched it’s Samsung Smartwatch but the product failed to achieve the success that it was expected to achieve.

Samsung Smartwatch: Tough competition from competitors like Apple watch led to the downfall of the product.

Hence Samsung Smartwatch can easily be placed in the Dog quadrant of the BCG Matrix.

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