BCG Matrix in Nestle

1. BCG Matrix on Nestle
Name Matrix Number
Lee Yean Yeon GM 05291
Loh Chee Kheong GM 05299
Chin Fui Yien GM 05287

2. Table of Content
Nestle Malaysia an Overview
Vision and Mission of Nestle
Categories of the products
BCG Matrix/ Growth Share Matrix
Products on BCG Dimension
Conclusion

3. Nestle Malaysia an Overview
Strength and Advantages of Nestle
Produce over 300 halal products in categories
• Coffee and beverages, prepared foods, milk, liquid drinks, breakfast cereals, chilled dairy, ice-
cream, chocolate and confectionery
Brand names under Nestle
• Maggi, Nespray, Kit Kat, Nestiva, Nestum, Bliss, Nutren, Cerelac, Power Bar & etc.

4. Milk
Produce over 300 halal products in categories
Dairy
Milk
Beverage

5. Nestle Professional
Food Business
Confectionary

6. Nestle Liquid Drink
Nestle Ice-cream
Healthcare Nutrition

7. Chilled Dairy
Maternal & Infant Nutrition

8. Vision and Mission of Nestle
Vision
Good Food Good Life
Position
As a global, trusted and responsible food, nutrition, health and
wellness company to be more proactive in providing healthy solutions
and value – added products to meet the needs of consumers

9. Categories of the products

10. BCG Matrix/ Growth Share Matrix
BCG Matrix was developed based on a
company’s business units/product can
be classified into four categories based
on combinations or market growth and
market share relative to the largest
competitor.

11. BCG Matrix

12. Cash Cow
• As leader in a mature market, cash cow exhibit a return on assets
that is greater than the market growth rate, and thus generate more
cash than they consume.
• What do you think about the ‘Cash Cow’ for Nestle?

13. BusinessGrowthRate
Low
High
Market Share Rate (Relative Position)High Low
• Maggi Noodle (Food)
• Introduced in 1969
• Market share is still growing
• Milo (Beverage)
• Introduced in 1950
• Sponsor 200 sport events in one year
Brand name has been embedded into
customer’s heart

14. Star
• Stars generate large amounts of cash because of their strong relative
market share, but also consume large amounts of cash because of
their high growth rate.
• What do you think about the ‘Star’ For Nestle?

15. BusinessGrowthRate
Low
High
Market Share Rate (Relative Position)High Low
• Nescafe
• Launched in 1964
• High in research and development (R&D)
cost
• The coffee market is still growing,
increasing number of coffee shops in the
country

16. Question mark/ Problem Child
• It grow rapidly and thus consume large amount of cash, but as they
have low market share, they do not generate much cash. As a result,
it is a large net cash consumption.
• What do you think about the ‘Question Mark’ For Nestle?

17. BusinessGrowthRate
Low
High
Market Share Rate (Relative Position)High Low
• Chocolate (Confectionery)
• Introduced in 1995
• It remained strong brand leader in the
market.
• Rise of competitors and start lose the
grip in the market.

18. Dog
• It has low market share and a low growth rate and thus it neither
generate nor consume a large of cash.
• Dogs are cash traps because of the money tied up in a business that
has little potential.
• What do you think about the ‘Dog’ For Nestle?

19. BusinessGrowthRate
Low
High
Market Share Rate (Relative Position)High Low
• Mineral water (Beverage)
• Sterile Milk bear brand (liquid drink)
• Launched in 2013
• The concept of packaging is not
welcomed
Weak in market, difficult to make
profit

20. Overall BCG MatrixBusinessGrowthRate
Low
High
Market Share Rate (Relative Position)High Low

21. Conclusion
• BCG framework is needed to assume whether the product has an
increment in relative market share as well as to increase in the cash
generation.
• It is a simple tool to view a corporation’s portfolio at a glance and
resource allocation among strategic business units.
• Example, the position of a business on the growth-share matric
provides an indication of its cash generation and its cash
consumption.