Brief History Of Boston Consultancy Group Marketing Essay

The project required an inherent examine of the Boston Consultancy Group matrix with a view to develop an intricate understanding of its underlying idea. The BCG matrix is a chart developed by Bruce Henderson for Boston Consultancy Group in 1968. The basic notion of creating such a chart was to allow multi-divisional or multi-product firms to investigate its varied enterprise models (SBUs) or merchandise. The matrix makes use of market progress fee and market share because the parameters for analyzing the portfolio of any group. Thus appearing as a strong portfolio administration software, it helps the group to look at and allocate assets amongst its varied models or merchandise.

The project explains the examine of BCG matrix for Hindustan Unilever Restricted (HUL). HUL marked the initiation of selling model fast-paced shopper items (FMCG). In 1931, Unilever arrange its first Indian subsidiary, Hindustan Vanaspati Manufacturing Firm, adopted by Lever Brothers India Restricted (1933) and United Merchants Restricted (1935). In November 1956, these three firms merged to kind Hindustan Unilever Restricted (then generally known as Hindustan Lever Restricted).

Hindustan Unilever was not too long ago rated among the many high 4 firms globally within the record of “World High Firms for Leaders” by a examine performed by Hewitt Associates in partnership with Fortune journal and the RBL Group. The corporate was ranked first within the Asia-Pacific area and India.

The mission that evokes HUL’s is “add vitality to life”. The corporate meets each want of vitamin, hygiene, and private care, with manufacturers that assist folks really feel good, look good and get extra out of life.

HUL have a particularly broad market publicity with over 35 manufacturers spanning throughout 20 distinct classes resembling soaps, detergents, shampoos, skincare, toothpastes, deodorants, cosmetics, tea, espresso, packaged meals, ice cream, and water purifiers. HUL manufacturers — like Lifebuoy, Lux, Surf Excel, Wheel, Truthful & Pretty, Sunsilk, Clinic, Shut-up, Pepsodent, Lakme, Brooke Bond, Knorr, Annapurna, Kwality-Partitions are family names throughout the nation and span many classes like soaps, detergents, private merchandise, tea, espresso, branded staples and ice cream. They’re manufactured in over 35 factories, lots of them being in backward areas of the nation. HUL’s distribution community covers round 6.three million stores.

The undertaking will attempt to cowl nearly all of the classes and label your entire product vary into following characterised quadrants of BCG matrix,

· Money Cows

· Query Marks

· Canines

· Stars

Transient historical past of Boston Consultancy Group

The Boston Consulting Group was began up in 1963 by Bruce Henderson and from its inception sought to ascertain itself within the planning and was thought of the pioneer of Enterprise Technique evaluation. Boston Consulting Group was based because the Administration and Consulting Division of the Boston Secure Deposit and Belief Firm – a subsidiary of The Boston Firm. In 1968, Boston Firm spinned off BCG as a separate subsidiary.

In 1965 Henderson thought that to outlive, a lot much less develop, in a aggressive panorama occupied by a whole bunch of bigger and better-known consulting companies, a particular id was wanted, and pioneered “Enterprise Technique” as a particular space of experience for BCG.As its shopper record grew, Henderson focused the nation’s greatest enterprise colleges. In the course of time he was mentioned to have eclipsed McKinsey as high recruiter at Harvard, aggressively wooing its greatest college students with excessive salaries and probability to make a distinction in a cutting-edge agency. He inspired the good younger thoughts he employed, to provide you with modern concepts that had been meant to dazzle hardened company veterans.

In 1973, Invoice Bain and others left BCG to kind Bain & Firm and two years later Henderson organized an worker inventory possession plan (ESOP) in order that staff may take the corporate unbiased from The Boston Secure Deposit and Belief Firm.

In 1998 BCG created The Technique Institute. Its function is to counterpoint the agency’s strategic considering by making use of insights from a wide range of educational disciplines to the strategic challenges going through each enterprise and society.

The Boston Consulting Group (BCG) ranked eighth total and first amongst smaller firms in Fortune Journal’s 2007 “100 Finest US Firms to Work For” survey, based mostly on sturdy worker improvement, a supportive tradition, and progressive advantages.

BCG evaluation is especially used for Multi Class firms. All classes and merchandise collectively are referred to as Enterprise portfolio. Thus, varied entities of enterprise portfolio could transfer ahead by a distinct tempo and with a distinct technique. The BCG evaluation really helps in deciding which entities in what you are promoting portfolio are literally worthwhile, the place you must think about and what offers you a aggressive benefit over others.

BCG Development Share Matrix – The BCG progress share matrix was developed by Henderson of the BCG group in 1970′s. The matrix classifies companies / SBU’s by

Relative Market Share – The market share of the enterprise / SBU / Product out there as in comparison with its rivals and total product / class.

Market progress fee – The expansion fee of the trade as a complete is considered from which the expansion fee of the product is extrapolated. This progress fee is then pitched on the graph.

As soon as the companies have been categorized, they’re positioned into 4 totally different quadrants of the matrix. The quadrants of the matrix are divided into

Money Cows – Excessive market share however low progress fee (most worthwhile).

Stars – Excessive market share and Excessive progress fee (excessive competitors)

Query marks – Low market share and excessive progress fee (uncertainty)

four) Canines – Low market share and low progress fee (much less worthwhile or could even be unfavourable profitability).

On the idea of classification, methods are determined for every SBU / Product. Let’s talk about the traits and techniques of every quadrant.

Money cows are models with excessive market share in a slow-growing trade. These models usually generate money in extra of the amount of money wanted to take care of the enterprise. . They’re to be “milked” repeatedly with as little funding as doable, since such funding could be wasted in an trade with low progress. They’re thought to be staid and boring, in a “mature” market, and each company could be thrilled to personal as many as doable

Canines , extra charitably referred to as pets are models with low market share in a mature, slow-growing trade. These models usually “break even”, producing barely sufficient money to take care of the enterprise’s market share. They depress a worthwhile firm’s return on property ratio, utilized by many buyers to evaluate how nicely an organization is being managed. Canines, it’s thought, must be bought off. Although proudly owning a break-even unit supplies the social advantage of offering jobs and doable synergies that help different enterprise models, from an accounting perspective such a unit is nugatory, not producing money for the corporate.

Query marks (also called drawback kids) are rising quickly and thus eat giant quantities of money, however as a result of they’ve low market shares they don’t generate a lot money. The result’s a big internet money consumption. A query mark has the potential to achieve market share and grow to be a star, and finally a money cow when the market progress slows Query marks have to be analyzed rigorously with a view to decide whether or not they’re definitely worth the funding required to develop market share. If the query mark doesn’t reach changing into the market chief, then after maybe years of money consumption it should degenerate right into a canine when the market progress declines.

Stars are models with a excessive market share in a fast-growing trade. The hope is that stars grow to be the subsequent money cows. When progress slows, if they’ve been in a position to keep their class management stars grow to be money cows, else they grow to be canines because of low relative market share. Sustaining the enterprise unit’s market management could require additional money, however that is worthwhile if that’s what it takes for the unit to stay a pacesetter.


Success Sequence in BCG Matrix – The Success sequence of BCG matrix takes place when a query mark turns into a Star and at last it turns into a money cow. That is the most effective sequence which actually offers a lift to the corporate’s progress and income. The success sequence is totally depending on the proper choice making.

Catastrophe sequence in BCG Matrix – Catastrophe sequence in BCG matrix takes place when a product which is a money cow because of aggressive strain is perhaps moved to a star. It fails because of competitors and it’s moved to query mark and at last it could must be divested due to its low market share and low progress fee. Thus the catastrophe sequence may occur due to improper choice making. This sequence impacts the corporate as lot of investments is misplaced to the divested product. Together with this the cash coming in from the money cow which is used for different merchandise too is misplaced.

Methods based mostly on the BCG Matrix

There are 4 methods doable for any product / SBU, these methods are:

1) Construct – By rising funding, the product is given an impetus in order that the product will increase its market share. For Instance – Pushing a Query mark right into a Star and at last a money cow (Success sequence).

2) Maintain – The corporate can’t make investments nor it has different funding commitments because of which it holds the product in the identical quadrant. For Instance – Holding a star as larger funding to maneuver a star into money cow is at present not doable.

three) Harvest – The Firm reduces the quantity of funding and tries to take out most money flows from the mentioned product which will increase its total profitability.

four) Divest – Finest noticed in case of Canine quadrant merchandise that are typically divested to launch the sum of money already caught within the enterprise.

Subsequently, the BCG matrix is one of the simplest ways for enterprise portfolio evaluation. The methods advisable after BCG evaluation helps the agency resolve the best line of motion.


Hindustan Unilever Restricted (HUL) is India’s largest Quick Transferring Shopper Items Firm. The corporate engages itself with over 20 distinct classes in House & Private Care Merchandise and Meals & Drinks and can be one of many nation’s largest exporters. HUL’s manufacturers contains Lifebuoy, Lux, Surf Excel, Wheel, Truthful & Pretty, Pond’s, Sunsilk, Clinic, Pepsodent, Shut-up, Lakme, Brooke Bond, Knorr, Kwality Wall’s are family names throughout the nation.

At the moment, Unilever holds 51.55% fairness within the firm whereas the remainder of the shareholding is distributed amongst about 380,000 particular person shareholders and monetary establishments.

BCG Matrix of HUL

Stars- Stars symbolize enterprise models having giant market share in a quick rising trade. They could generate money however due to quick rising market, stars require large investments to take care of their lead. Internet money circulate is often modest. SBU’s situated on this cell are engaging as they’re situated in a sturdy trade and these enterprise models are extremely aggressive within the trade. If profitable, a star will grow to be a money cow when the trade matures.

Money Cows- Money Cows represents enterprise models having a big market share in a mature, gradual rising trade. Money cows require little funding and generate money that may be utilized for funding in different enterprise models. These SBU’s are the company’s key supply of money, and are particularly the core enterprise. They’re the bottom of a company. These companies often observe stability methods. When money cows lose their enchantment and transfer in the direction of deterioration, then a retrenchment coverage could also be pursued.

Query Marks- Query marks symbolize enterprise models having low relative market share and situated in a excessive progress trade. They require large amount of money to take care of or achieve market share. They require consideration to find out if the enterprise may be viable. Query marks are typically new items and providers which have industrial potential. There isn’t a particular technique which may be adopted. If the agency thinks it has dominant market share, then it could actually undertake enlargement technique, else retrenchment technique may be adopted. Most companies begin as query marks as the corporate tries to enter a excessive progress market in which there’s already a market-share. If ignored, then query marks could grow to be canines, whereas if large funding is made, after which they’ve potential of changing into stars.

Canines- Canines symbolize companies having weak market shares in low-growth markets. They neither generate money nor require large amount of money. On account of low market share, these enterprise models face price disadvantages. Typically retrenchment methods are adopted as a result of these companies can achieve market share solely on the expense of competitor’s/rival companies. These enterprise companies have weak market share due to excessive prices, poor high quality, ineffective advertising, and many others. Until a canine has another strategic intention, it must be liquidated if there’s fewer prospects for it to achieve market share. Variety of canines must be averted and minimized in a company.


Excessive Development Price Industries

Low Development Price Industries


Anti-Ageing Cream

Tooth Paste

Pores and skin And Equity Cream

Males’s Equity Product


Dish Wash

Detergent Powder

Rest room Soaps

Processed Meals

Packed Wheat Flour

Tea Baggage

Washing Desserts

Ice Lotions



Liquid Soaps

Shaving Merchandise

Jam & Jellies

Moisturizing Lotions

Packed Branded Tea



Excessive Market Share

Low Market Share

AXE Deodorant

Truthful & Pretty Equity Cream


Surf Excel



Clinic Plus



Kissan Jam


Kwality Partitions


Crimson Label

Shut Up


Truthful & Pretty Menz Lively



Dove Shampoo


Taj Mahal Tea Baggage

Kissan Ketchup




Brooke Bond Sehatmand

Knorr Meal Maker Vary

On the idea of above talked about evaluation, nearly each product of HUL is being analysed towards the trade to which it belongs after which positioned in one of many four quadrants of BCG matrix.



AXE Deodorant

Truthful & Pretty

Lakme Anti Ageing



Surf Excel



Kwality Partitions

Kissan Jam

Knorr Soup


Shut Up



Truthful & Pretty Menz Lively




Taj Mahal Tea Baggage

Kissan Ketchup

Knor Meal Maker


Clinic Plus



Crimson Label



Brooke Bond Sehatmand



An in-depth evaluation of your entire market’s information has been carried out and the varied SBUs and merchandise of HUL have already been categorized into the 4 quadrants of BCG matrix. Subsequent to their allocation into one of many 4 quadrants an in depth parallelism might be drawn with the varied methods being mentioned within the first chapter and might be quote conclusively.

1. COWS: Because the cows wanted to be milked every now and then, and efforts are to be made to make sure that they keep the most important share out there the next methods are being adopted by HUL;

Product Growth:

Sunsilk created the most important group for Indian women which is –

Sunsilk innovatively comes up with a complete product vary of Smooth & Easy, Thick & Lengthy, Broken Restore, Hair Fall Answer, Beautiful Black Shine and Anti Dandruff.

Clinic Plus has advanced to maintain in line with the altering wants of customers by consistently renovating its providing to verify it’s the greatest resolution for the everlasting need of getting lengthy hair for each mother and daughters.

Vaseline the moisturising cream has developed itself from simply being a petroleum jelly to a pacesetter amongst moisturisers with Vaseline Whole Moisture, Vaseline Aloe Cool, Contemporary Vaseline Wholesome White and Vaseline Lip Care.

Concentric Diversification:

To maintain milking its money cow Crimson Label, the HUL after floating its firm entered right into a sequence of merger and acquisition of associated tea firms beginning with Brooke Bond after which Lipton. Lipton was added as a result of it catered to solely the premium section whereas Crimson Label focussed upon center stage section. Thus a manoeuvred method to widen the client base.

2. STARS: The celebrities although generate funds however should be consistently invested into as a result of their prospectus of changing into money cows will depend on the pre-requisite of them being the market chief.

Market Growth:

AXE got here out with extremely modern merchandise (like Axe Intuition, Axe Darkish Temptation, Axe Pulse and Axe Denim) and intensive sexually provocative ads thereby changing the non-users of deodorant merchandise into its customers.

Market Penetration:

Kissan Jam’s new squeeze assortment of various fruit flavours particularly mango, blueberry, and many others. in engaging and children’ pleasant packaging is an try to spice up extra gross sales throughout the current child section.

Joint Enterprise:

Initially HUL and Lakme Restricted, a TATA firm, got here out with Lakme Unilever Restricted, a 50:50 three way partnership. Although afterward the Lakme Restricted bought its whole divested promoting its whole shares to HUL.

Backward Integration:

The Doom Dooma and Tea property, two manufacturing amenities of Unilever had been merged with Brooke Bond. Later in 1995, Brooke Bond and Lipton had been merged to kind Brooke Bond Lipton India Restricted (BBIL) 30. BBIL acquired Kwality and Milk meals 100% model names and distribution property accordingly and HUL launched Wall’s ice lotions.

three. QUESTION MARKS: Since they’re the brand new entrants or strugglers out there for main share the place the market is altering at a excessive tempo, efforts are being made to guarantee that the achieve on their market share.

Product Growth:

Pepsodent entered into a serious modification of its Germicheck and Whitening toothpaste by developing with the Delicate and Gumcare vary of toothpastes.

Knor soups developing with your entire vary of soups starting from tomato combine vegetable, Chinese language to hen soups.

Market Penetration:

Kissan Ketchup has provide you with a brand new packaging referred to as “Pichkoo”, the try has been to induce the customers to make use of increasingly more of ketchup each time they use it.

four. DOGS: Canines they’re run on breakeven level and within the eyes of an accountant they aren’t even viable. However may be vital for synergies;


According to firm’s enterprise technique to exit non-core enterprise, the Firm has disposed its Mushroom enterprise, which shaped a part of KICM (Madras) Ltd and its Seeds Enterprise additionally within the yr 2004.


The present methods for the varied section of your entire product vary of HUL have already been concluded. Sure suggestions are hereby given for the choice and adoption of methods.

Whereas implementing the technique due consideration must be given to the above proven actions of merchandise by means of varied quadrants with a view to be sure that solely methods inside chance of success sequences are being executed.


Although HUL has been implementing a number of methods to outperform and increase up its market share. Following are some methods that may result in era of money cows:


¶ Taj Mahal Tea luggage with a view to seize the market share of Tetley Tea luggage must also provide you with its personal vary of Natural or Inexperienced Tea luggage. (Product Growth)

¶ Shut Up being a pacesetter within the gel based mostly toothpaste section ought to attempt to minimize the monopolistic holding of Colgate out there by:

a) Arising with modern cream based mostly toothpastes

b) Getting into into the toothpowder trade31

¶ Kissan Ketchup can increase up its market share to outcast Maggi by increasing its geographical base by going for broad scale product distribution, thereby substituting ketchup’s identify with Kissan ketchup within the minds of customers. (Market Growth)


¶ Having Vim, Wheel, Lifebuoy and Lux within the star section and that too in an trade with excessive progress fee, HUL ought to go for backward integration with a view to safe the availability of uncooked materials for all of the soaps. (Backward Integration)

¶ To take care of its market share Lakme Anti-Ageing ought to keep on extreme interactive classes with excessive community people. File these classes and use them as ads to get their product not directly endorsed by them. (Market Growth)

three. DOGS:

¶ Brooke Bond Sehatmad must be bought off as a result of the client tastes and dietary necessities have modified from sipping vitamin B enriched tea to anti-oxidants enriched tea. With the evolution of inexperienced tea, the demand by well being acutely aware people are extra of anti-oxidants fairly vitamin b, as fruits supplies an ample supply of nutritional vitamins. (Liquidation).