Introduction
Using the Boston Consulting Group Matrix as reference, I have chosen the
following products for each of the four quadrants : Star (upper left quadrant) –
So Good Soya Beverage, Cash Cow (lower left quadrant) – Coca-Cola Classic,
Question mark (upper right quadrant) – Honest Tea, Dog (lower right quadrant)
– Ford Focus.
1. Honest Tea – A Question Mark
Honest Tea company has just entered the beverage industry about two year
ago. According to the company, they had $1.1 million of sales in 2000 in the US.
But taking into consideration the big names such as Lipton and Bigelow in the
tea market, I assume that the company has under 1% of market share. The
latest AC Nielsen data shows that total sales of hot and iced tea in Canada
were estimated at $267.3 million, up 7 % from 1999. Especially green tea sales
jumped up 88 % from 1999. I believe that the tea market will increase with
double-digit growth. Therefore, Honest Tea is an SBU with a low share in a high
growth market, called a Question Mark in terms of BCG matrix.
Honest Tea’s objectives are to build its market share, hopefully to be a star.
To build its market, Honest Tea should emphasize promotion and advertising.
This can be done by various methods ; releasing publication about green tea
benefits related to health matters to target “Baby Boomers”, developing
innovative products such as green tea ice cream as a joint work with ice cream
companies to meet the youth’s favors. Also, it can create more distribution
channels through partnerships.
2. ‘So Good’ (Soya World Inc.) – A Star
Of approximately 20 main soy beverage products such as Parmalet (Italy),
VitaSoy USA (US), Nielsen (Canada) and so forth, ‘So Good’ has a 38% market
share over the year 2000 in Canada. According to AC Nielsen1 (as cited by
AAFC2), soy/rice beverage products are one of the fastest growing categories.
Daily industry specialists anticipate that sales in soy/rice beverage products will
rise by 15% to 30% per year in the next five years. So Good is an SBU with a
high share in a high growth market which makes it a Star.
So Good’s objectives should be to not only stay in the Star quadrant, but to
grow into a Cash Cow. In order to achieve these, So Good should invest more
in the market by promotion and advertising that would directly challenge the
milk market. This can be done by emphasizing the nutritious advantage that soy
has over milk and the important growth and maintenance which covers all ages
from babies to the elderly. These points can especially be aimed at the target
market of the “Baby Boomers” who are very concerned with aging and health,
and are the largest market segment with disposable income currently and for
many years to come.
To attract the youth market, the flavour of soy should be improved greatly,
and, in fact, is offered in different flavours by some companies. Also new and
innovative products will attract not only the young but people who don’t like
milk ; perhaps such diversified products as frozen soy bars, soy and chocolate
candy bars, etc. To guard against competitors, So Good should aim at making
its name into a household word, a generic name, like “Kleenex”. Also,
packaging that looks less “healthy food” store and more youthful and exciting is
a consideration.
3. Coke Classic – A Cash Cow
…………
Appendix – 1
(source : Canadian Soft Drink Association)
1997 8-oz Servings Per Capita
Canada
USA
Europe
Carbonated Soft Drinks 471
861
191
Coffee
402
315
248
Milk
380
301
271
Beer
274
357
221
Tea
246
112
252
Juices
240
139
115
Bottled water
90
184
191
Powdered drinks
72
78
n/a
Wine
27
30
89
Sports drinks
17
26
12
Spirits
16
21
24
All other/tap water
848
496
1470
Appendix - 2
The International Dairy Foods Association – soymilk sales in Canada

March 97 to March 98: $12 million

March 98 to March 99: $21 million (75% growth)

March 99 to March 2000: $38 million (80% growth)

March 2000 to March 2001: $52 million (37% growth)