BCG MATRIX

Coca-Cola is a multinational beverage company that offers a wide range of products, including carbonated and non-carbonated soft drinks, fruit juices, sports drinks, and ready-to-drink teas and coffees. As of 2021, the company had more than 200 products in its portfolio.

To determine which products should be supported, we can apply the BCG matrix to Coca-Cola's product portfolio. The BCG matrix is a tool used in strategic management to evaluate the relative market position and potential of a business unit or product line. It is based on the idea that a business should allocate resources to products or business units based on their potential for growth and relative market share.

The BCG matrix consists of four quadrants: high market growth and high market share (stars), high market growth and low market share (question marks), low market growth and high market share (cash cows), and low market growth and low market share (dogs).

Stars are products or business units with high market growth and high market share. These are typically the most valuable and require significant investment to maintain their market position. Examples of stars within Coca-Cola's product portfolio might include popular carbonated soft drinks with high consumer demand and growth potential, such as Coke and Sprite.

Question marks are products or business units with high market growth but low market share. These may have the potential to become stars, but they require significant investment to increase market share and establish a dominant position. Examples of question marks within Coca-Cola's product portfolio might include emerging products or product categories with high growth potential but low market share, such as plant-based beverages or functional drinks.

Cash cows are products or business units with low market growth and high market share. These are typically mature products or business units that generate steady cash flow but require minimal investment to maintain their market position. Examples of cash cows within Coca-Cola's product portfolio might include established non-carbonated beverages with a large and stable consumer base, such as Minute Maid orange juice.

Dogs are products or business units with low market growth and low market share. These are typically products or business units that do not have a strong market position and do not generate significant cash flow. Examples of dogs within Coca-Cola's product portfolio might include niche or niche products with low consumer demand and little potential for growth, such as specialty syrups.

Based on this analysis, Coca-Cola should prioritise investment in its star products, such as Coke and Sprite, to maintain their market position and support their growth potential. The company should also consider investing in question marks, such as emerging product categories with high growth potential, to try to increase their market share and turn them into stars. Coca-Cola should also continue to harvest its cash cows, such as established non-carbonated beverages, for steady cash flow, and consider divesting or discontinuing its dogs if they do not have the potential to improve their market position.

It is important to note that the BCG matrix is just one tool that Coca-Cola's management can use to make strategic decisions about its product portfolio. Other factors, such as market trends, consumer preferences, and the company's overall business strategy, may also impact which products the company chooses to support.