The BCG Matrix, also known as the Growth-Share Matrix, is a strategic marketing tool that businesses use to analyze their product lines and business units based on two key factors: market growth rate and relative market share.
Today, we are going to have a look at the BCG matrix of Samsung after a brief introduction to the company.
History of Samsung
Samsung is a giant name in the global corporate sector, and it has a wide range of products. It started as a trading company in 1938 and gradually tapped into different industries like food processing, textiles, retail, securities, and insurance.
Today, Samsung is globally recognized as a leading provider of mobile phones, cameras, televisions, washing machines, microwaves, and other electronics.
One of the intriguing things about Samsung is its ability to spread risk across different business units. If one area, like the camera industry, faces challenges, Samsung can still generate decent revenue from other products.
This strategy helps Samsung navigate financial setbacks. However, stakeholders must carefully decide which products to prioritize for better profits. This is where the Samsung BCG Matrix comes into play.
BCG Matrix of Samsung
Stars
Stars are the products, services, or business units with high market shares. They are often market leaders that generate huge revenues due to their strong market position. However, they require significant investments to stay ahead of the competition and maintain growth.
Samsung dominates the TV market, which is why its smart TVs show a high market share and growth rate on the BCG Matrix. Despite the tough competition, Samsung continues to perform well globally. The company also keeps innovating its smart TV technology to retain existing customers and attract new ones.
Question Marks
Products in this category are emerging in the industry but are still in the developmental phase. The term “question mark” also indicates that the company has not yet established a considerable position in the given market. However, with the right marketing strategies and investment, these products have the potential to capture market share in a rapidly growing market.
Samsung’s laptops fall into the question mark section of Samsung BCG matrix. Although Samsung has launched its laptops, they do not see consistent development like its mobile phones.
Currently, Samsung’s laptops hold a low market share, but with effective management, they could secure a larger market presence and potentially move into the star quadrant.
Cash Cows
In Samsung’s BCG Matrix, some products that were once stars have now transitioned to the cash cows quadrant. These products experience slow market growth and stagnant revenue. However, they maintain a significant market share in a stable market, resulting in high cash flows and profits. Also, due to the lower growth rate, they require minimal investment.
Examples of cash cows are Samsung’s home appliances, such as washing machines and refrigerators. These products have become household names over the years, strengthening Samsung’s reputation for quality and reliability.
Dogs
Dogs are business units or products in a declining market with a low market share. They mostly stand at the breakeven point, making just enough cash to maintain their market share. Overall, these units are not attractive to most investors.
Currently, printers are the dogs in Samsung’s BCG Matrix. This is due to their low sales and limited contribution to overall business growth. Although Samsung spent its resources on developing these products, their technology could be repurposed into more promising products.
Generally, dogs are the most likely to be sold off or shut down because of their low profitability and poor market outlook.
Also read about the BCG Matrix of Nike.
Summing it up
The BCG Matrix is a strategic marketing tool that companies use to analyze their product lines based on market growth rate and relative market share.
Samsung, a global giant, uses this matrix to categorize its products into stars, question marks, cash cows, and dogs.
- Stars, like Samsung’s smart TVs, have high market shares and growth rates but need significant investment.
- Question marks, such as Samsung’s laptops, have growth potential but low market share.
- Cash cows, like home appliances, generate stable profits with minimal investment.
- Dogs, such as printers, have low profitability and are likely to be sold off.