BCG matrix helps in doing a comparative analysis of business potential and the evaluation of environment. Relative market share shows SBU Sales this year leading competitor’s sales this year and market growth share shows industry sales this year minus industry Sales last year. The analysis requires that both measures be calculated for each SBU. The dimension of business based on strength and relative market share will measure comparative advantage indicated by market dominance. The key theory underlying this fact is existence of an experience curve and that market share is achieved due to overall cost leadership.

BCG matrix has four cells, with the relative market share and the vertical axis denoting market growth rate. The mid-point of relative market share is set at 1.0, if all the SBU’s are in same sector, the average growth rate of the industry is used. For example Nestle India’s all SBU exist in food industry. But, if all the SBU’s are located in different sectors of industries, then the mid-point is set at the growth rate of the economy, for example the Tata group’s SBUs exist in a variety of sectors.

The four cells of this matrix have been called as stars, cash cows, question marks and dogs. Each of these cells represents a particular pattern of business. To clarify each cell of the matrix, we will be discussing examples of Amul’s products. Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF) is India’s largest food product marketing organization with annual turnover (2013-14) US$ 3.0 billion. The word amul is derived from the Sanskrit word amulya meaning rare, valuable. The co-operative was initially referred to as Anand Milk Federation Union limited hence the name AMUL. It has the largest distribution network compared to any FMCG company. It has nearly 50 sales offices spread all over the country, more than 5000 wholesale dealers and more than 700000 retailers. In order to maintain costs at lower levels, Amul India has never spent more than 1% of its budget on advertising. However it has still been successful in creating the same impact. It’s simple yet appealing ad campaigns with its lucky mascot a cute and chubby girl usually dressed in polka dots has not changed so far.

Stars

 Stars represent business units having large market share in a fast growing industry. They usually generate cash because of fast growing market. Stars require huge investments to maintain their flourishing status. The net cash flows of ‘Star’ SBU are usually modest. Please understand that SBU’s located in this cell are attractive as they are located in a robust industry and these business units are highly competitive in the industry. When the industry matures, a successful star will become a cash cow. Amul pure ghee, cheese spread, ice creams, dairy whiteners and flavored bottled milk are examples of ‘star’ in Amul’s product portfolio.

Cash Cows

Cash Cows represent business units having a large market share in a mature yet slow growing industry. Cash cows require little investment but they generate steady cash that can be utilized for investment in other business units. It’s not the stars but cash cow SBU’s which are the key source of cash, and are in particular the core business of a corporation. They are the supporters of an organization. These businesses usually follow stability strategies. When cash cows lose their appeal and move towards descent, then a divestment policy may be followed. Amul butter, fresh milk range, mozzarella cheese are examples of cash cows in their portfolio.

Question Marks

 These SBUs represent business units having relatively low market share in a high growth industry. They require huge amount of cash for maintenance and to gain market share. They require consideration to determine if the venture of the SBU is feasible. Question marks generally possess new goods and services which have a good commercial prospective. There is no specific strategy which can be adopted. If the firm thinks it has dominant market share, then it can adopt expansion strategy, else retrenchment strategy can be adopted. The fact is that most businesses start as question marks as the company tries to enter a high growth market in which there are already existing businesses. If ignored and not rectified in time, then question marks turn into dogs. But, if huge investment is made, then they have potential of becoming stars. Masti dahi, lassi, mithai, tetra packed milk are examples of question marks.

Dogs

Dogs represent businesses having weak market shares and they operate in low-growth markets. They are cash traps. They neither generate cash nor require huge amount of cash. Due to low market share, these business units face cost disadvantages. Generally retrenchment strategies are adopted because these SBUs can gain market share only if they don’t face competition. That means other firms are weaker firms. An SBU can turn into dog because of high costs, poor quality, ineffective marketing, poor strategies etc. A dog is dragged on usually when a firm has strategic reasons to do so. If the SBU has fewer prospects for it to gain market share, it is better to divest the SBU.  The thumb rule is number of dogs should be avoided and minimized in an organization. Amul chocolate, energy drink, infant milk range and pizza are examples of dog.

The BCG Matrix is not free from limitations. The limitations are defined hereby.

• BCG matrix classifies businesses as low and high, but generally businesses run on medium scales too. Thus, the true scale/degree of business needs to be reflected.
• High market share does not always lead to higher profits. The fact is that there are high costs also involved with high market share.
• Growth rate and relative market share are not the only indicators of profitability. This model ignores and overlooks other indicators of profitability.
• Many times, dogs may help other businesses in gaining competitive advantage. The competitive advantage earned by other SBUs because of the dogs is more than cash cows sometimes.

Strategies based on BCG Matrix are as follows:

Build

By increasing investment, the product is given a thrust such that the product increases its market share. For example an organization can push a Question mark into a Star and finally a cash cow.

Hold

A company when cannot invest because it has other investment commitments due to which it holds a product or products in the same quadrant. For example is Amul decides to hold its question mark products in the same quadrant as higher investment to move a question mark into star need to put on hold.

Harvest

This is very well observed in the Cash cow scenario, wherein the company reduces the amount of investment and tries to take out maximum cash flow from the said product which increases the overall profitability. For example, Amul butter has retained its market share for decades. It’s indeed a leader as Amul owns 88 percent share in butter market.

Divest

It is observed in case of Dog quadrant products which are generally divested to release the amount of money already stuck in the business.

This is how the BCG matrix is the best way for a business portfolio analysis. The strategies recommended after BCG analysis help the firm decide on the right line of action and help them implement the same.

Every Sunday I see many of my friends and relatives pulling the newspapers to open the astrology page to read their weekly predictions. Sometimes, even I do the same thing.  What changes every week, what do we expect to change so often? What’s that we all want from our lives? And does astrology give explanation for every few months for everything improper in our life?  Some planets will always retrograde and some will prograde. While one astrologer lists what to do, the other one just says the opposite. When one says travel, someone else says stay back home. When one says ‘’invest’’ the other says ‘’don’t invest for now’’.

And who does not visit astrologers/soothsayers? From the Prime Ministers, Presidents of nations, to the working class of people each one visits or sees soothsayers with a hope in heart that someday things will change for good. Astrology is full of fiction, intuition, nostalgic longing and archetype-driven poetry. It is a rich engine for psychic exploration. It gives us a hope, a dream, a vision, an intuition, an insight, something to look forward to…. It has the magic. Between the two extremes of life – yes and no, it provides thin gruel for our monotony and boring life. It helps people’s imaginary longings related to economic, emotional and social consequences.

Human beings are very reactive by nature. It’s a sad puzzle; some believe in an invisible deity responsible for the planet’s well-being, for our well-being. People have faith in the unknown. And hence we see astrology mushrooming all over. We pick out trends that fit our narrative. A Vedic astrologer might help you pick the ‘best date’ for your wedding, but if the marriage breaks up into a divorce, well, that too becomes part of the ‘plan.’

People want to know their future because they believe that they have greater things set for them. They don’t want to be stuck in their present, where they believe that nothing amazing is happening to them. They dream big, and realize that someday they will be able to do something stunning, without even realizing that they have the present, in which they don’t realize that that “something big” was the future that they were dreaming about in the past.

Astrology’s premise is that the planetary movements influence the moments in time. Since we’re part of the story of the Universe, our moment of birth recorded on the celestial clock is meaningful. The planets continue to move, engaging with the fixed in time energies of our birth chart. People cannot take in the mystery of things, they are also eager to unfold all the solutions the earth has to unravel.

Why do people believe in astrology? The answer to the question lies very much in the same realm as why people believe in just about any superstition. Astrology offers a number of things which many people find very desirable: information and assurance about the future, a way to be absolved of their current situation and future decisions, and a way to feel connected to the entire cosmos.

Astrology is an absurd tool of self-discovery, no matter how far you decide to take it. At first, the pieces of the puzzle may not seem to fit. But if you stick with it, at a certain point it “clicks” and the orchestrations of the cosmic dance make sense. Astrology shares this with many other beliefs which tend to be categorized as “New Age,” for example the idea that nothing in life is truly coincidental. On this view of life, everything which happens to us, even the smallest or seemingly most insignificant event, happens for some particular reason. Astrology then claims to provide at least some of the answers as to why they happen, and perhaps even a way to predict them in advance. In this way, astrology purports to help people understand their lives and the world around them – and who doesn’t want that?

In a sense, astrology does work. The way it is practiced today, it can work quite well. After all, most of those who visit an astrologer end up feeling satisfied and feeling that they have benefited. What this really means is not that astrology has accurately predicted the person’s future, but rather it means that visiting an astrologer or having a horoscope cast can be a fulfilling and personally satisfying experience.

If you take astrology as a truthful means of prediction, then you will be dissatisfied. If you use it as a useful motivation to your own thoughts and insights it’s ok to some extent. If you depend too much on it, for taking those important decisions in life, its vagueness may lead you nowhere.