The products manufactured by an organization can be placed into different categories on the basis of their financial performance, chances of future growth and market share. BCG Matrix has been developed as a framework to help identify the products of a business entity into different categories in accordance to their market share and industry maturity level. Bajaj Group is a part of the top 10 organizations in the Indian corporate sector. The group is focusing on the production of different items, including automobiles being managed under the name of Bajaj Auto. The auto segment is involved in the production of two and three wheeler vehicles (Bajaj Auto Limited, 2016). The company has maintained a strong position in the two and three wheeler segment despite the slow performance of the industry. Bajaj Auto has been analyzed through BCG Matrix in the following discussion:
Cash Cows
The quadrant of cash cow is for those products which bring in high revenues for an organization without having the need to invest a great deal to manage their operations and marketing. These brands or business units have a well-established market presence, a high demand among the consumers and high degree of acceptance in the target market. In addition to this, the industry in which cash cows are operating is at the mature stage. Cash cows have a significant amount of market share as well, due to which the managers try to gain as much financial gain out of these products as possible. There are two products which have been a rich source of income for Bajaj autos, including, Bajaj 3 wheelers and Platina. Mohile (2013) has discussed the prominent position of the three wheelers for the company by indicating that around 30% of the profits of Bajaj auto generate from the sale of its three wheelers. In this category, the company has launched a more fuel efficient model, expecting it to further gain benefit from this cash cow. In addition, within the category of two wheelers, Platina brand has gained positive response in the market, as evident through its higher market share. Apart from these brands, the CT 100 has gained the position of top selling item by the company (Gopalan, 2016), therefore it can also be identified as a cash cow.
Stars
The second quadrant in the BCG Matrix is for those products that are not giving as much financial return as the cash cows, nevertheless, they are a lucrative segment for the business. These products have optimistic future prospects as their industry is still growing and their market share can further increase with the passage of time through continuous investment and development. The stars can later on become a cash cow for the company once they attain maturity and require little investment to maintain the steady earning potential. Similar to cash cows, the stars support the company in future growth and financial development. In the quadrant of Stars, the relevant products are Discover 135cc, Pulsar 150 cc and Pulsar 180 cc. These products have a high market share and the consumer demand is expected to grow in future, which would eventually create a higher market share for this business segment. Discover 135cc is a growing business unit for the company as the demand for this two wheeler has been significant. The company had some issues in maintaining high sales, however the management has made efforts to retain a profitable position of its two wheeler (Baggonkar, 2014). Pulsar is another renowned brand from Bajaj autos that has made a strong position in the Indian two wheeler industry. As observed by Chatterjee (2016), Pulsar has been included in the top 10 leading brands of motorcycles in the country, while V15 is also a rising star for Bajaj auto.
Question Marks
Some products need time to mature and develop enough market share to be regarded as a success for the company. The present performance of these products shows that there is some risk of product failure. On the other hand, there is also a possibility of the product becoming a successful item, helping the company to add another star to its product line. These items which have a high degree of uncertainty for their future are termed as question marks. The industry has the potential to grow, therefore the management is hopeful that the product may gain a better position with investment and effort. The market share of the question marks can also increase when the product receives a better reception among the target market. The ninja brand has not been able to perform as well as the other two wheelers manufactured by Bajaj auto, therefore it has been placed in the category of question mark. Its sports oriented motorcycles have the growth potential however there is also uncertainty with respect to the degree of success these products will achieve in the Indian market. Another product that is a question mark for Bajaj Auto is Blade which is also underperforming.
Dogs
Not all products of an organization provide the results expected by the management. Some products fail to move beyond the breakeven phase, while others become a continued source of loss for the business entity. These products have been termed as dogs in the BCG Matrix. The fourth quadrant represents the products which have low market share and their growth chances are further limited due to the slow development of the industry, along with low chances of industry recovery. Since these business units are underperforming, it makes them a suitable option for liquidation, encouraging the management to stop investing resources in these unprofitable units. Bajaj Splash and Bajaj Chetak, both brands of scooters have not been able to perform well in the Indian market. Despite the intensive marketing campaign, the company was not able to sell the units as per their expectations, suggesting that the scooter is likely to be a failed investment. Due to this reason, the company has stopped further investment in these domains as they were not expected to give any positive return to the firm.
References
Baggonkar, S. (2014, September 1). Bajaj out to re-Discover its commuter brand. Business Standard. Retrieved from http://www.business-standard.com/article/management/bajaj-out-to-re-discover-its-commuter-brand-114090101297_1.html
Chatterjee, P. (2016, May 19). 10 highest selling motorcycles in April 2016: Bajaj V15 debuts. Economic Times. Retrieved from http://auto.economictimes.indiatimes.com/news/two-wheelers/motorcycles/10-highest-selling-motorcycles-in-april-2016-bajaj-v15-debuts/52346609
Gopalan, M. (2016, May 2). Bajaj Auto’s twin-brand strategy revs up domestic bike sales. The Hindu Business Line. Retrieved from http://www.thehindubusinessline.com/companies/bajaj-auto-cracks-two-lakh-domestic-bike-sales/article8547085.ece
Mohile, S. S. (2013, June 14). Bajaj launches new range of 3-wheelers. Live Mint. Retrieved from http://www.livemint.com/Industry/tXxqYD3QXRPQLevl8cYF1O/Bajaj-launches-new-range-of-3wheelers.html