Bcg Matrix for Cocacola

BCG Matrix for Coca-Cola Company

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BCG Matrix for Coca-Cola Company

The BCG matrix was named after its founder Boston Consulting Group. The matrix is based on the fact that the business units of a company can be classified into four different categories of market growth and market share that is about the largest market competitor. The categories of the BCG matrix classification include the stars, question marks, Cash cows and the dogs (NetMBA.com, 2010). The stars indicate a company that generate and consume large amounts of cash because of its large market share. The question marks denote a company that is rapidly growing and consumes large amounts of cash but generate less due to their low market share. The cash cows generate more cash than they consume because they are mature and exhibit a higher return on assets than their market growth rate. The dogs denote a company with low market share, low growth rate and do not generate nor consume large amounts of cash (NetMBA.com, 2010). Therefore, the matrix maps the different business unit positions that are the key determinants of a company’s profitability.

The Coca-Cola Company is a good example to apply the BCG matrix because it has experienced a significant growth over the past few years. The company’s growth has made it command a significant market share in the non-alcoholic beverage industry. The competitiveness and the growth rate of the company are based on its ability to expand globally, to play healthy cards and introduce new brands to the market. The BCG matrix of the Coca-Cola Company consists of cash cows and the Stars (Lussier, 2011). The company belongs to the cash cow part of the BCG matrix because it has products that generate larger amounts of cash than it consumes. In other words, a variety of the brands of the Coca-Cola Company exhibits a higher return on assets than the company’s growth rate. Examples of cash cows in the...