The article details the BCG Matrix analysis of Amul, an acclaimed dairy brand in India. Readers can glean insights into the growth potential by studying Amul’s cash cows, stars, question marks, and dogs.
This blog post will examine Amul’s BCG Matrix, which helps this brand hold the title of “Taste of India” by analyzing its product portfolio and market share.
Introduction of Amul
Amul, a renowned brand in India since 1946, is recognized for its exceptional dairy products. It has earned a spot among the household names of the country by providing premium quality edibles.
The primary motive behind creating this iconic brand was to ensure security to both consumers and milk producers in India.
The Kaira District Co-operative Milk Producers’ Union, jointly owned by 3.6 million milk producers in Gujarat, has established itself as the backbone of dairy products in India.
The Union pioneered and catalyzed India’s White Revolution that made the country the largest producer of milk and its related products globally.
Amul’s satirical billboards cleverly comment on current affairs and have effectively captured the attention of its audience. Amul brand, known for its reliability, quality, and value for money has diversified into different milk and milk product markets.
The competition has intensified, and new revenue streams are available due to Amul’s ability to tap into niche sectors like camel milk. By establishing a solid foundation of quality, innovation, and customer satisfaction, Amul exemplifies the authentic Indian spirit.
Understanding the Four Quadrants of the BCG Matrix
Companies use the BCG growth-share matrix as a management tool to evaluate their business units or products based on relative market share and growth rate.
The matrix classifies each unit or product into one of four quadrants: Cash Cow, Star, Question Mark, and Dog. Each specific quadrant signifies a distinct combination of market share and growth potential.
The business units that bring in the most consistent profits are those with high market share in markets with low growth. These Cash Cow units can be sustained profitably, requiring little investment.
The high market share of Star products in expanding markets suggests promising growth prospects, making them a potential Cash Cow in the future.
The high-growth markets with low market share are where the Question Mark products thrive. However, these products require more investment and attention to remain successful. On the other hand, Dog products hold low market share in areas with slow growth and do not generate significant revenue for the company.
By understanding the four quadrants, companies can prioritize their investment and attention to business units or products that require improvement. This analysis also helps identify reliable sources of revenue. while determining areas where more resources are needed for further growth.
Quadrants BCG Matrix Of Amul
Question Marks
Question Mark products have the potential for growth but require meticulous planning and attention to succeed. These products primarily operate in markets that are expanding quickly, yet represent a small proportion of the overall market share.
Amul’s Lassi product has successfully caught the attention of customers despite being in a highly saturated market. Competing with big players like Aarey and Govardhan. Amul is investing in targeted advertisements to accelerate its growth rate.
Amul recently introduced a new product named “Amul Kool Koko”. However, it is still struggling to establish its position in the market as it hasn’t been well-received yet.
Amul recently launched a new line of ice creams labeled “Amul Happy Treats,” adding to their growing product range. This exemplifies the adoption of question marks in labeling and packaging by the company.
Companies often use funds to research the potential of their Question Mark products. By investing in these products and providing proper attention, companies can turn them into promising ventures. To assess and prioritize their different businesses based on market share and growth potential, many companies rely on the BCG matrix.
Dogs
In a sluggish market, “Dogs” – the low-growth business units or products that have minimal market share tend to generate less revenue for companies. As a result, businesses typically invest little in these units.
Amul produces various products, including Amul Cookies and Amul Pizza which are classified under a particular category. However, these categories face stiff competition and limited innovation. Which negatively impacts Amul’s market share and revenue generation prospects from these products.
Amul produces certain products despite their low revenue and profits to satisfy the demands of its diverse customer base.
In the BCG matrix, landing in the Dog quadrant may appear unfavorable at first glance. However, it presents a chance for firms to revamp their products or business units through sound investments and strategies.
Stars in BCG Matrix of Amul
Amul is a renowned brand in the Indian milk industry, widely recognized and trusted by families across the country. In fact, several Amul products fall under the Stars quadrant of the BCG Matrix. These products have high market share and growth potential, making them a compelling choice for consumers seeking quality and value.
1. Amul Ice Cream
The product has a significant market share in an expanding market. And prompting the company to allocate resources from its Cash Cow products toward promoting and developing Amul Ice Creams. Advertisements for this product are strategically directed at making it more attractive to consumers.
2. Amul Ghee
Amul has launched a product with high market potential, which aims to increase its market share and face tough competitors. This persuasive marketing strategy has helped the product secure a significant share of the growing market.
3. Amul Mithai Mate
Many Indian desserts rely on a popular milk-based sweetener. This ingredient has captured a significant share of the dessert market. It also holds potential for further growth through effective marketing and product innovation.
Benefits of BCG Matrix for Amul
The benefits of the BCG matrix for Amul are numerous. By classifying its products. Amul can easily identify and prioritize cash cows, which are its most profitable products. This allows Amul to focus on generating maximum revenue by leveraging these highly valuable sources.
The matrix helps to identify stars with high growth potential. It is a guide to invest in these stars so they can continue growing and generating revenue.
By analyzing their question mark products, Amul can identify untapped markets and invest in those areas to promote growth.
Identifying Amul’s dogs products enables them to phase out unprofitable items, thus decreasing costs and boosting profitability.
Successful implementation of BCG Matrix by Amul
Amul effectively implemented the BCG matrix to prioritize product investment and expand into new markets. As an illustration, Amul milk, butter, and cheese are classified as cash cows since they dominate the market share and generate substantial revenue for the company.
Amul successfully introduced new product variants to target different customer segments and maintain its market leadership position. Among these variants were Amul Butter Lite, Amul Tazza Milk, and Amul Gold Milk.
Amul identified Amul Lassi as a marketable product and effectively marketed it to compete with other beverages. The implementation of the BCG matrix has allowed Amul to maintain its market leadership by staying ahead of the competition.
Limitations of BCG Matrix
1. Limited Scope
The BCG matrix analyzes a company’s position using just two dimensions: market share and growth potential. However, other crucial factors that can significantly impact business success are left out.
2. No Predictability
The Matrix falls short in accurately predicting the future performance of a product or business unit due to its inability to incorporate environmental factors and account for competitors’ strategies aimed at capturing market share.
3. No Cross Analysis
The current model lacks the ability to analyze different business units and products together, which could result in missed chances for innovation and synergy.
4. Static Model
The BCG matrix is a model that remains unchanged, failing to account for current market trends, customer preferences, and new product developments. As a result of this static nature, it may no longer be relevant or effective in today’s modern business environment.
5. Product Focused
The matrix overvalues product growth and market share, neglecting the crucial factors of customer satisfaction, brand reputation, and operational efficiency.
Conclusion
The BCG Matrix provides Amul and other companies with a useful framework for analyzing their various products. By segmenting them into Dogs, Cash Cows, Stars, and Question Marks, it assists in informed decision-making on where to focus investments.
Companies can then identify which products offer limited potential for growth or should be terminated altogether. Despite its limitations, the BCG Matrix remains a valuable tool for assessing business priorities.
References
Heartofcodes 2018. Retrieved from; https://heartofcodes.com/bcg-matrix-of-amul/
Casereads 2020. Available at; https://casereads.com/bcg-matrix-of-amul-analyzing-the-taste-of-india/
