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SUBMITTED BY:SECTION-C, GROUP 13: Abhijit Das- 2012PGP005 Ashwin Vijayan- 2012PGP073 Kumar Abhishek- 2012PGP178 Payal Anand- 2012FPM10 Rajat- 2012PGP292 Sumit Bapuji Gedam- 2012PGP382 Vikash Kumar- 2012PGP438
Introduction Saku has a product portfolio with categories as specified in pg-1 are Beer, Long Drinks, Beer Imports, Mineral Water, Cider, and Soft drinks. The category and the products have been placed in the BCG matrix as specified below:
High Share Kiss Cedars Saku gin Carlsberg Cider Zingoo Guiness Fast Growth Long Drinks
Rock
Low Share
Mountain carb
Tume Hele
The criteria for placing the products & category in BCG matrix are : 1. Percentage Increase in sales 2. % Gross margin The following are the attributes of the four quadrants of BCG matrix: 1. Star: The product categories have been placed based on high market share and high growth rate. The products that have been placed have a high percentage increase in sales and high contribution to GM.
2. Question mark: The product categories have been placed based on low market share and high growth rate. The products that have been placed have a high percentage increase in sales and low contribution to GM. 3. Cash Cow: The product categories have been placed based on high market share and low growth rate. The products that have been placed have a low percentage increase in sales and high contribution to GM. 4. Dogs: The product categories have been placed based on low market share and low growth rate. The products that have been placed have a low percentage increase in sales and low contribution to GM.
Product Portfolio
Beers: Local: Saku lead the market with share of 43%. Other competitors are: (1) Tartu with 35% and (2) Viru with 11%. There cant be much growth in this product as the market is saturated. ( No CAGR Increase and minimal 4.3% increase in sales). Imported: Saku hold 24% Market share in this category. Three top international brands (1) Carlsberg (18% market share), (2) Guinness (5.89%) and (3) Kilkenny (0.49%) (4) Long drinks: SAKU still manage to hold market leader with a share of 13% while Tartu had 11% next to them. Mineral water, cider and soft drinks: Mineral Water: Saku and Tartu detained the market share of 15% each. The main player is Coca-Cola with 23%. Cider: Saku lead the market with 24 % of market share where Tartu held 20 % and others 56 %. Soft drink: Coca-Cola held 66 % of the market, followed by Tartu with 16 %, SAKU with 4 %. Product Portfolio Health Analysis
The contribution of Saku beer is high to the gross margin but the sale growth is low. Saku beer is a cash cow and should be used to generate cash and support the company. Other Saku alcoholic including gins, kiss ciders contribute high to gross margin and also have very high growth. Hence they are in star quadrant. Imported Mineral water have a considerable growth and low contribution to gross margin. They are in question mark quadrant. Saku Mineral water is in dog quadrant. They have a low growth & low contribution to margin. Imported beer is in star quadrant as it has high growth and high contribution to margin Soft drink as a category contributes very less to margin and also has low growth. Therefore it is in Dogs quadrant. But zingo of this category has a high growth rate and considerable contribution to margin. Therefore company can continue to import this soft drink divesting others. Recommendations
Saku has to restructure and modify its beer product category. It has divest Hele , Tume , & Sport which are dogs in this category. The original light beer and on ice is a question mark and the company can invest in both of them as they have high growth potential. Saku sport is in dogs quadrant and therefore is not generating cash for the company. It can be divested from the product category. Mineral water as a category has a lot of growth potential. At 15% market share, it can invest heavily in marketing & promoting its product in this segment and hence increase its market share. Saku is the market leader in Cider category with 24% market share. Saku should invest in this category so that it becomes a cash cow for the company in future and also maintains its leadership position. Long Drinks as a category have a high growth potential and the company can invest in this category to maintain its leadership position. The segment is highly fragmented with Tartu in the second position and no other player in dominating position.
Calculations
Product Beer Long Drinks Beer imports Cider Soft drink Mineral Water 2002 43 10 16 20 3.81 13.89 2003 43 13 18 24 4 15 CAGR 0% 30% 12.5% 20% 5% 8% BCG Class Cash Cow Star ? Star Dog ?
95 43 7 145
194 74 6 274
6 5 11 100 92 192
saku gin kiss cedars other Total Imported soft drinks Pepsi 7up zingo limps kali Total
161 37 6 204
97 87 26
-2.50%
210
68 44 64 22 15 213
1.40%