The objective of these 2 exercises corrected on the BCG matrix (Boston consulting group) is an initiation to the acquisition of basic techniques allowing to highlight the transfers and the techniques implemented at the course level and to adapt the supports pedagogical according to the techniques studied
Table de matières
Corrected exercise 1 on the BCG matrix
Using the information below, build and interpret a BCG matrix situating the different DAS of Cherry, an agri-food company specializing in the exploitation of fresh red fruits.
| SAR | CA Cherry | CA Main competitor | Growth (excluding inflation) |
| Frozen red fruits | 200 | 50 | 3% |
| D esserts made with red fruits (crumbles, tira misus, etc.) | 30 | 60 | 10% |
| Red fruit aromas | 50 | 100 | 0% |
| Yoghurts with red fruits | 60 | 180 | 8% |
| Red fruit ice cream | 100 | 50 | 12% |
| Collective catering | 40 | 50 | 10% |
- Answer
The different DAS can be presented in a BCG matrix:
Interpretations and recommendations of the BCG matrix
| SAR | Area | Recommendations |
| Collective catering Red fruit dessertsFruit yogurts | DAS Dilemma | DAS in the launch phase: high growth:Invest more in these DAS to support them in order to get out of the dilemma zone and move into the star zone.Seek differentiation and strengthen communication.To avoid its descent into the deadweight zone, investment efforts must be multiplied for DAS Yoghurt with fruits, which has a small market share compared to its competitor, but the market remains promising. |
| Red fruit ice cream | DAS Stars | DAS which generates considerable revenue. The market is attractive due to its strong growth:strengthen the leader’s position by investing in communication to reach more customers and keep sales up.product improvements help it stay ahead of the competition |
| Frozen red fruits | DAS cash cow | The DAS holds 40% of the market far ahead of the direct competitor. He alone generates 40% of the turnover of the Cherry company. But the market growth rate remains low (3%) compared to the average (7%):Build customer loyalty through aggressive advertising and promotions and maintain leadership position.Use DAS revenue to accelerate transition from dilemma DAS to star DAS area. |
| Red fruit aromas | SAR deadweight | The market is not changing for this DAS:Prepare to abandon it: divestment / liquidation of stock / end-of-series promotions…Keep DAS to complement Cherry’s range and hinder competition and keep the company’s image in the market (DAS based on research and innovation) |
Corrected exercise 2 on the BCG matrix
Company X specializes in the marketing of mid-range biscuits. Over the years, it has diversified into biscuits from other regions and other countries, more top-of-the-range biscuits, but also dairy products and cereals. She would like to take stock of her various activities.
| Activities | Market growth rate (in %) | Turnover of the activity (in euros) | Main competitor turnover (in euros) | Size of the total market (in euros) | Net margin (in %) |
| premium cookie | 7 | 5,000,000 | 4,000,000 | 50,000,000 | 15 |
| mid-range cookie | 2 | 10,000,000 | 20,000,000 | 100,000,000 | 2 |
| entry-level dairy product | 5 | 25,000,000 | 100,000,000 | 300,000,000 | 5 |
| premium dairy product | 12 | 12,000,000 | 15,000,000 | 50,000,000 | 20 |
| cereal growers | 1 | 5,000,000 | 80,000,000 | 150,000,000 | -2 |
| Cookies from the South of France | 5 | 35,000,000 | 90,000,000 | 1,200,000,000 | 1 |
| Mid-range Bordeaux | 3 | 15,000,000 | 60,000,000 | 500,000,000 | 2 |
| South African cookies | 2 | 2,000,000 | 50,000,000 | 250,000,000 | -5 |
| chile cookies | 7 | 8,000,000 | 4,000,000 | 40,000,000 | 7 |
Task : With reference to the previous table, construct a BCG matrix and develop strategic recommendations for each activity
- Answer
| Activities | Weight in turnover (in %) | Market share (in %) | Main competitor market share (in %) | Relative market share |
| 1/ top-of-the-range biscuit | 4.27 | 10.00 | 8.00 | 1.25 |
| 2/ mid-range biscuit | 8.55 | 10.00 | 20.00 | 0.50 |
| 3/ entry-level dairy product | 21.37 | 8.33 | 33.33 | 0.25 |
| 4/ high-end dairy product | 10.26 | 24.00 | 30.00 | 0.80 |
| 5/ cereal growers | 4.27 | 3.33 | 53.33 | 0.06 |
| 6/ Cookies from the south of France | 29.91 | 2,917 | 7.50 | 0.39 |
| 7/ Mid-range Bordeaux | 12.82 | 3.00 | 12.00 | 0.25 |
| 8/ Cookies from South Africa | 1.71 | 0.8 | 20.00 | 0.04 |
| 9/ Chili cookies | 6.84 | 20.00 | 10.00 | 2.00 |
The median growth rate is (15 + 2 +… – 5 + 7) = 45/9 or 5%.
Interpretation and recommendation:
The company does not have a cash cow product, which risks weighing on its cash flow.
The high-end dairy product business (4) is clearly buoyant: this is where massive investment is needed.
Regarding the high-end biscuits (1) and Chilean biscuits (9) activities, they still need to be developed: they are currently stars.
The objective is to further gain market share. These activities will then be called upon to become cash cows.
Activities 5 and 8 (cereals and biscuits from South Africa) are in a dead weight situation and contribute negatively to the margin: they must be abandoned.
The other activities are to be maintained as they are by limiting investments as much as possible.
