Strategic business unit (SBUs) a single business or collection of related business that can be planned separately from the rest os company, with its own set of competitors and a manager who is responsible for strategic planning and profit performance. Question Marks- Build Strategy, Stars-Hold Strategy, Cash Cows-Harvest Strategy, Dogs-Divest Strategy. In the commercial arena, the choice of an effective strategy is perhaps the most important and the toughest decision to take. The decision to select among the grand strategies and deciding upon which strategy will best meet the enterprise’s objectives is rendered complex by multifarious considerations.
The beauty of BCG Matrix, a Matrix developed by a group known as Boston Consulting Group, USA, is that it seeks to place the different products of an organization in different grids such as to analyze them in a comparative manner in terms of profitability or in terms of (a) percentage growth in sales and (b) market share position, to be exact. Thus it gives an opportunity of self-assessment to the organization to reassess its product positioning and thus come out with alternative solution if the original placement of the products in the market does not meet the desired level of growth.
The objectives of the present study are,
✓ To place the various brands of Nestlé Bangladesh Limited in the matrix as suggested by the Boston Consultancy Group, as based upon the data empirically collected.
✓ To analyze the brands so placed and critically compare their placement.
This study aims to study the products offered by Nestle in Bangladesh by placing them on the BCG matrix. The placement of the products on the matrix shall be on the basis of the empirical data collection which place Nestle products for sale.
Nestlé - the world's largest food & beverages company in terms of sales as well as product range and geographical presence. Nestlé covers nearly every field of nutrition: infant formula, milk products, chocolate and confectionery, instant coffee, ice cream, culinary products, frozen ready-made meals, mineral water etc.
Nestlé Bangladesh Limited, a wholly owned subsidiary of Nestlé S.A., started its commercial production in 1994 and currently employs 400 people directly in the company and another 1000 people indirectly in the industry. Today Nestlé Bangladesh Limited is strongly positioned to grow through its policy of constant innovation and renovation, concentrating on its core competencies and commitment to high quality, with the aim of providing the best quality food to the people of Bangladesh. Riding on the growth of its power brands, Nestle has extended its dominance in food business in Bangladesh as well. However, a number of its brands require a repositioning. Nestlé Bangladesh's vision is to be recognized as the most successful food and drink Company in Bangladesh, generating sustainable, profitable growth and continuously improving results to the benefit of shareholders and employees
Designed to develop business strategy in 1960 by Bruce Henderson, president of the Boston Consulting Group, BCG Matrix places products according to market share and market growth rate in the four-celled matrix.
Henderson noted that companies that dominated their markets tended to be more profitable and businesses that were in this category were termed “cash cows.” It followed logically that if companies could dominate a growing market, they would have both growing profits an assured future. Companies that were in this category of the four-celled quadrant were classified as “stars”. Obviously, strategists should allocate resources to these businesses to enable them to capture and retain shares of a market with a high growth rate. Figure: The Boston Consulting Group’s Growth-Share Matrix
1) Stars (high growth, high market share)