Porter’s 5 Forces Model &

BCG Matrix
Group - 4
Divya Lulla - 11
Girish Sadhwani - 12
Porter’s 5 Forces Model
Porter's Five Forces is a business
analysis model that helps to
explain why various industries are
able to sustain different levels of
profitability.

The model was published by

Michael E. Porter.
Bargaining Power of Buyers
Buyer Power is an assessment of how simple it is for the buyers to drive costs down. It
is driven by the number of buyers in the market.

If Consumers are fewer in number but there are plentiful sellers then the power is in the
hands of buyers and vice versa.

Eg.: Online Sites for Hotels Booking,

Local Market – Linking Market.

.
Bargaining Power of Suppliers
Supplier power is an assessment of how simple it is for suppliers to drive up costs. It is
driven by the quantity of suppliers.

Eg.: Disney plus hotstar

Subscription, Airlines

Industry in covid period.

Competitive Rivalry
The larger the number of competitors, along with the number of equivalent products
and services they offer, the lesser the power of a company.

Suppliers and buyers seek out a company's competition if they are able to offer a better
deal or lower prices. Eg.: FMCG Products, Luxury Cars. etc.
Threat of substitutes
Where close substitute items exist in a market, it improves the probability of clients
changing to options in light of cost increments. This decreases both the power of
suppliers and the engaging quality of the market. Eg.: Audi Q7 and Mercedes GLE, Ola
and Uber.
Threat of New Entrants
An industry with strong barriers to entry is ideal for existing companies within that
industry since the company would be able to charge higher prices and negotiate better
terms. Eg.: Audi has high threat from its competitors especially Land Rover not
immediate impact but slowly and gradually can gain their market share.
BCG Matrix
The BCG Matrix, created by the Boston
Consulting Group in the 1970s, is a
business model based on the life cycle of
products.

It is divided into four types: Stars, Cash

Cows, Dogs, and Question Marks.
Market Share
❖ Market share is the percent of total sales in an industry generated by a
particular company.
❖ It is calculated by taking the company's sales over the period and dividing it
by the total sales of the industry over the same period.
❖ The market leader in an industry is the company with the largest market
share.
Market Growth Rate
❖ Market Growth Rate is the rate at which a market's size is increasing and
expressed as percentage per annum.
❖ Market growth rate is a key factor to be considered when calculating the
development of a specific product in a particular market.
❖ Commonly marketers create a marketing campaign founded primarily on
maximising a specific market's growth rate.
❖ This can be achieved through comprehensive advertising to allow consumers
better awareness of the product or understanding of their need for that
product.
Dogs
❖ If a company’s product has a low market share and is at a low rate of growth,
it is considered a “Dog” and should be sold, liquidated, or repositioned.
❖ Dogs, found in the lower right quadrant of the grid, don't generate much cash
for the company since they have low market share and little to no growth.
❖ For this reason, they are prime candidates for divestment or sale.
Cash Cows
❖ Products that are in low-growth areas but for which the company has a
relatively large market share are considered “Cash Cows”.
❖ Cash cows, seen in the lower left quadrant, are typically leading products in
markets that are mature and generate higher returns than market share.
❖ The value of cash cows can be easily calculated since their cash flow patterns
are highly predictable.
❖ In effect, low-growth, high- market share cash cows should be milked for cash
to reinvest in high-growth, high- market share “stars” with high future
potential.
Stars
❖ Products that are in high growth markets and that make up a sizeable portion
of that market are considered “stars” and should be invested in more.
❖ In the upper left quadrant are stars, which generate high income but also
consume large amounts of company cash.
❖ If a star can remain a market leader, it eventually becomes a cash cow when
the market's overall growth rate declines.
Question Mark
❖ Questionable opportunities are those in high growth rate markets but in which
the company does not maintain a large market share.
❖ Question marks are in the upper right portion of the grid.
❖ They typically grow fast but consume large amounts of company resources.
❖ Products here should be analyzed frequently and closely to see if they are
worth maintaining.
SAMSUNG BCG Matrix
❖ Samsung Smartwatch failed to achieve the success that it was expected to
achieve because of tough competition from its competitors which led to
downfall of the product.
❖ Samsung Smartwatch can be placed in Dog quadrant of BCG Matrix.
❖ Samsung Home Appliances like Washing Machines, Refrigerators, AC’s are
the Cash Cows for the company.
❖ They stand for quality and trust and also holds a good potential to grow in the
coming future.
❖ Amount earned from Cash Cows can be further invested in Stars to gain high
market share and growth.
SAMSUNG BCG Matrix
❖ Samsung Mobile phones are quite a hit among customers and have their own
base of loyal customers and also TV’s are gaining good traction from global
market.
❖ These products can be considered as the Stars of the company as Samsung
come up with new features and technologies.
❖ Samsung Printer is that product which can be placed in Question Mark
quadrant.
❖ Samsung Printer has small market share and has high competition so
investing in this can be a high risk decision.
SAMSUNG BCG Matrix
Thank You