Rules for You Put All of Your Company’s Products free essay sample

Once you put all of your company’s products into their respective categories, you then consider these rules: 1. Stars:  invest your marketing dollars in these since they could become dominant market leaders 2. Cash Cows:  milk these to provide the cash to invest in your stars and a few question marks 3. Question Marks:  invest in the most promising of these as well — but only a few 4. Dogs:  cut the leash and let these go to the highest bidder for some much needed cash To illustrate, imagine that you’re Coca-Cola. Your portfolio might look something like this: Question Mark:  your energy drink brand (Full Throttle) ? Star:  your bottled water (Dasani) ? Cash Cow:  your namesake soft drink (Coca-Cola) ? Dog:  your sweetened juice drink (Hi-C) As Coca-Cola’s CMO, you would use income from Coke to invest primarily in Dasani and Full Throttle, while looking to sell off Hi-C to some private equity fund with too much cash on its hands. We will write a custom essay sample on Rules for You Put All of Your Company’s Products or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page But before you rush off and start reallocating your dinero, consider these caveats†¦ Caveat #1: Markets change with the economy and other conditions — sometimes very quickly. What if consumers make a massive shift from bottled water to tap water, as many municipal governments are doing? Dasani is doomed. Or what if  Tiki Bar TV  uses Hi-C as a drink mixer, making it a hip and trendy drink amongst geeks overnight? Your dog is now a star†¦ Caveat #2: One company’s dog is another company’s cash cow (or better). Some investors have struck gold by buying another company’s dogs. In 2003, Nike bought troubled Converse for only $305 million (less than what the movie â€Å"Iron Man† earned in two months). Tips: Invest for sales growth and market share. Use cash from Cash Cows to support required investments. Star examples: Apple = iPhone Coca-Cola = Vitamin Water Cash Cows Low Growth, High Market Share [pic] †¢ Foundation of the company and Stars of yesterday †¢ Generate more cash than required †¢ Extract profits by investing as little cash as possible †¢ located in an industry that is mature and not growing or declining Tips: Maintain the strong market position and defend your market share. Take advantage of sales volume and leverage the size of operations. Support other businesses. Cash Cow examples: Apple = iPods Coca-Cola = Coca-Cola Classic Dogs Low Growth, Low Market Share [pic] †¢ Cash traps †¢ Do not have potential to bring in much cash †¢ Number of dogs in country should be minimalized †¢ Business is situated at a declining stage Tips: Optimize your current operations. Get rid of all non value added activities and features. Reposition your offering to generate positive cash flow or sell this business. Dog examples: Apple = Since good company should not have any dogs Coca-Cola = New Coke