TERMS OF REFERENCE

Using the BCG matrix go out to a company of your own choice and find out the different product
portfolio stating why you think that they are in that position of Dogs, Cash cow and Stars.

SEND by: ESD DEPARTMENT, Mr. Masvimbo

INTRODUCTION

BCG matrix of Coca-Cola is seen as a tool used for planning and utilizes graphical
representation of Coca-Cola services and products to help them make informed decisions. It is
mainly a tool to help with long-term strategic planning and help a business consider growth
opportunities. To do this, it reviews its portfolio of products and decides on where to invest,
discontinue, or develop products. Additionally, it is also known as the Growth/Share Matrix.

In general, the BCG matrix is a planning tool that uses graphical representations of a company’s
services and products to help the company decide what it should sell, keep, or invest in.

The Coca-Cola Company, incorporated under Delaware's General Corporation Law, is a

multinational beverage corporation headquartered in Atlanta, Georgia. The company is interested
in retailing, manufacturing, and marketing non-alcoholic and alcoholic beverage concentrates
and syrups. The company produces Coke, the sugary drink it is best known for and was invented
in 1886 by pharmacist John Stith Pemberton. At the time of production, Coca-Cola used kola
nuts, which added caffeine, and coca leaves, that brought in an amount of cocaine to the drink.
The coca and the kola together provided a stimulative effect. However, this stimulative effect is
the main reason the drink was sold to the public as a healthy "tonic," and the coca and the kola
are also the sources of the product's name and the company.

DEFINATION OF TERMS: BCG MODEL OVERVIEW

The BCG model is a portfolio analysis is tool that classifies a company’s business units into four
categories based on their market growth rate and relative market share. These categories are
known as stars, question mark, cash cows, and dogs. Stars represent business units with high
market share in rapidly growing markets, question marks are units with low market share in high
growth markets, cash cows are units with high market share in law-growth markets. The BCG
model provides a visual representation of an organization’s portfolio and aids in strategic
decision making.

PROCEDURE

The information was obtained through interviews with Mr Andrew Chinamasi, Commercial
Strategy Manager, and Dorothy Makwalo, the Assistant Brand Manager at Coca-cola Central
Africa. Coca-cola holdings limited is a manufacturer and marketer of quality beverage products.
The company is listed on the Zimbabwe stock exchange. Coca-cola is one of the largest
manufacturing and marketing companies in Zimbabww. The products are distributed through a
wide network of channels such as retailers, wholesalers, franchisees, street vendors and company
owned sales shops throughout Zimbabwe

COCA COLA BCG MATRIX

The Coca-Cola BCG matrix shows the different Coca-Cola products in four quadrants: the Dogs,
Stars, Cash Cows, and the Question Mark. This matrix will analyze its slow growth, low growth,
high growth, high selling, and high predictive selling products.

DOGS

Dogs are referred to as a company's products with no chances of promising growth and low
growth and market share. Additionally, management does not show any interest in these products
and does not invest in these products due to low chances of benefits or profit.

In the BCG matrix of Coca-Cola, you can see declining demand for carbonated soft drinks in
favor of increasing demand for low-calorie beverages or healthier options. However, if these
factors keep increasing, Coke and the cash cow can become a low market share product.

STAR

The Star of a business is the products or business units having a high market share in a high-
growth industry. In the BCG matrix of Coca-Cola, the segment of bottled water is its star
product. There are two leading bottled water brands from the house of Coca-Cola called Kinley
and Dasani, operating in separate geographical locations.

The Kinley brand is offered in European markets, while Dasani is dominant in the US. However,
as the demand for healthy drinks and bottled water keeps expanding, this segment of Coca-Cola
is expected to attain a more significant market share and a better opportunity for further
investment. Thus, the primary reason why Coca-Cola invests in more brands such as flavored
and sparkling water.

CASH COWS

Cash Cows, in simple terms, are products with high market share but low growth markets.
However, the forecasts suggest low chances of significant growth in the future, and they have a
high market share in the industry. Also, you can get maximum revenue from these products with
meager investment to sustain profitability.

In the Coca-Cola BCG matrix, you can see that Coke has been the market leader and a
significant revenue generator in the carbonated soft drink industry. It has been an established
brand for years and has a global presence, making Coke a cash cow for the Coca-Cola company.

QUESTION MARK

As you can guess, Question Marks are the products currently in the development stage. Also, the
market's response to these products is still not very well established. In addition, these products
would have achieved a small market share but a risky investment decision. Thus, the outcome
could either turn into stars or cash cows.

RECOMMENDATIONS

Based on the analysis of the Coca cola product portfolio, BCG matrix, the following
recommendations can be made

Zico (Dog)

Considering that Zico is classified as a dog with low market share in low-growth markets, it is
recommended for Coca cola to evaluate the viability of the product. Options such as divestment
or restructuring should be explored to minimize losses associated with Zico. The company can
redirect resources and investments from Zico to more promising products within its portfolio.

Coke(Cash cow)

Coke is identified as identified as a cash cow with high market share in low-growth markets,
Coca cola should continue to invest in and leverage this product. The stable cash flows generated
by Coke can be utilized to support other products or ventures within the company’s portfolio.
Coca cola should focus on maintaining its market dominance by ensuring product quality,
expanding distribution channels, and implementing effective marketing strategies

Minute maid(question mark)

Considering minute maid as a question mark with low market share in high-growth markets,
Coca cola should conduct a thorough market analysis and competitive assessment to determine
the best course of action. The company should consider increasing investments in Minute Maid
to capture a large market share. This can be achieved through product enhancements, targeted
marketing campaigns, and strategic partnerships to leverage market opportunities. Coca cola
should closely monitor the performance of Minute Maid and be prepared to make adjustments
based on market dynamics.

Kinley(star)

As Kinley is identified as a star with high market share in rapidly growing markets, Coca cola
should continue to invest in this product to sustain its growth trajectory. The company should
allocate resources for product innovation, expanding distribution networks, and strengthening
market initiatives to capitalize on the high-growth potential of Kinley. Coca cola should also
monitor market trends and consumer preferences to stay ahead of the competition and maintain
its market leadership position.

CONCLUSION

The application of the BCG matrix to Coca cola product portfolio provides insights into the
strategic positioning of Zico, Coke, Minute maid, and Kinkey. While Zico is a dog that may
require divestment or restructuring, Coke stands as a cash cow generating stable cash flows.
Minute Maid represents a question mark that necessitates further evaluation and strategic
decision-making, while Kinley shines as a star, demanding continued investment to leverage its
high-growth potential. By utilizing the BCG matrix, Coca cola can make informed decisions
regarding resource allocation, product development and portfolio management to optimize its
overall business performance and ensure long-term success.

REFERENCE LIST

Boston Consulting Group. (2019). What is the BCG Growth-share Matrix? Retrieved from
https://www.bcg-com/en-mx/about/our-approach/matrices-models/bcg-growth-share-matrix
Brynjolfsson, E., & Macfee, A. (2014). The second machine age: Work, progress, and prosperity
in a time of brilliant technologies. W. W. Norton & Company. Available from:
http://www.cocacola.com/companyoverview/#:-:text=cocacola%20Holding%20Limited%20is
%20a,zimbzbwe%20stock%20Exchange%20(ZSE).