BCG Matrix

Introduction

Beximco Group is one of the largest private sectors in Bangladesh which has a
turnover of Tk 16.5 billion and employs 22,000 people. Beximco has 152,000
shareholders and contributes to 8% of the market capitalization of Dhaka
Stock Exchange. In their operational activities t h e y h a v e S i x t yp e s
i n d u s t r i e s wh i c h a c t u a l l y w o r k s a s s i s t e r c o n c e r n . B e x i mc o
s i s t e r concerns are Textiles, Basic Chemicals and Pharmaceuticals, Jute, Marine
Foods, Real Estate and Development. Beximco services include Engineering,
Media, Information Technology, Trade and Financial Services.

But these companies are not in same position because their performance
and their relative market share is different to identify these things we selecting
four sister concern of them and we use BCG matrix do that.

BCG matrix is introduced by the Boston Consultant Group to make marketing and
strategic ma n a g e me n t d e c i s i o n e a s i e r f o r t h e c o mp a n i e s c o n s i s t o f
d i f f e r e n t S B Us . T h e ma t r i x basically is used to manage all SBU according to
the need for leadership and growth. In other words, to make the product life cycle
longer. The matrix is a graph consists of relative market share in the horizontal axis
and market growth rate in the vertical line. Relative market share indicates the
leadership position of any SBU. Market growth rate indicates the attractiveness of
any SBU. According to the dimension of the coordinates of the SBU, the matrix is
divided into four parts.

BCG matrix is introduced by the Boston Consultant Group to make marketing and
strategic ma n a g e me n t d e c i s i o n e a s i e r f o r t h e c o mp a n i e s c o n s i s t o f
d i f f e r e n t S B Us . T h e ma t r i x basically is used to manage all SBU according to
the need for leadership and growth. In other words, to make the product life cycle
longer. The matrix is a graph consists of relative market share in the horizontal axis
and market growth rate in the vertical line. Relative market share indicates the
leadership position of any SBU. Market growth rate indicates the attractiveness of
any SBU. According to the dimension of the coordinates of the SBU, the matrix is
divided into four parts.
Question marks:

The SBU is not the leader in the industry but growth rate is above average in the
market. It is the introduction stage in the product life cycle.

Stars:

The SBU is the leader of the industry and growth rate is still high. It is the
growth stage in the product life cycle.

Cash Cow:

The SBU is still the leader of the industry but growth declines to below
average of the market growth. It is the maturity stage in the product life cycle.

Dogs:

T h e S B U l o s e s t h e l e a d e r s h i p bu t s t i l l n o i mp r o v e me n t i n t h e
g r o wt h . S t a t e s t h e decline stage in the product life cycle.

Analysis Method & Limitations

Analyzing BCG matrix was not an easy job. Beximco group operates in many
industries. We were required sales revenue information for current year and
prior year of the companies d i f f e r e n t S B U ' s . Us u a l l y t h i s s o r t o f
i n f o r ma t i o n i s a v a i l a b l e i n t h e a n n u a l r e p o r t s . Th e collection of all
SBU's annual report was not possible. First, we tried to collect the SBUs'
annual report of the company we are concerned. If found, we
c o l l e c t e d a l l p o s s i b l e competitors' annual report available against the
correspondent SBU. We found 3 ISP (Internet Service Provider), 4 real estate, 6
pharmaceutical and 12 textile companies’ annual reports to a na l yz e i n c l u d i n g
c o n c e r n e d S B U ' s a n n u a l r e p o r t . P r i ma r y f i n d i n g s o f t h e a n a l ys is
a r e a v e r a g e ma r k e t g r o wt h r a t e a n d c o n c e r n e d S B U' s ( B O L,
S h i n e p u k u r Ho l d i n g s , P a d ma Textile Mills, Beximco Pharma). The basis
and workings of the primary findings will be given upon query. Average
growth rate of the market is found 12.8%
BCG Matrix of Beximco Group Analysis

The BCG Matrix that we have formed – reflects us an industry average growth rate
of 12.8%and the relative market share 1 reflects leadership position. Higher
the position better is the leader. According to the BCG matrix, the four SBU from
Beximco are on different plots. First of all the ISP section- BOL, it’s in the question
mark plot. With a growth rate of 16.16%- its growth rate is high but he relative
market share is as low as 0.9. It needs more investment as it has
opportunities by its industry. In the pharmaceutical industry Beximco is not at
all in a convincing position. As Beximco Pharmaceuticals Limited is
currently is in dog position, but still generating most part of the cash in the
industry, It is maintaining only 0.5 of relative market share and dismal 11.28%
of growth rate.
In the textile industry- Padma Textile Mills Limited is near to cash cow
position. With a negative growth rate of -12.74%, it is in lower side of the
growth rate. Its relative market share is also in low side and it is 1(app).
The particular SBU requires supplementing other SBU as it is generating
second largest sales volume in the organization. Another SBU in other industry
is also needs to be divested as soon as possible, and it is Shinepukur Holdings
Limited. Its growth rate is -46.3% but its relative market share is only0.5.

Conclusion

As a sum we can easily recon that Beximco is not in a very good situation
to be on. They have to think fast and effective as two of their SBU’s (
Shinepukur Holdings Limited and Beximco Pharmaceuticals Limited) are
clearly struggling and other one (Padma Textile Mills Limited) is quiet likely to
accept the fate of the previous two.