Question

Where does the soft drink, Fanta, fit on the BCG portfolio management matrix in the Coca-Cola Company? Would it be considered a "star" with high relative market share and high market growth rate? A "cash cow" with high relative market share and low market growth rate? A "question mark" with low relative market share and high market growth rate? Or a "dog" with low relative market share and low market growth rate?

For reference:

Dogs. Dogs hold low market share compared to competitors and operate in a slowly growing market. In general, they are not worth investing in because they generate low or negative cash returns. But this is not always the truth. Some dogs may be profitable for long period of time, they may provide synergies for other brands or SBUs or simple act as a defense to counter competitors moves. Therefore, it is always important to perform deeper analysis of each brand or SBU to make sure they are not worth investing in or have to be divested.
Strategic choices: Retrenchment, divestiture, liquidation

Cash cows. Cash cows are the most profitable brands and should be “milked” to provide as much cash as possible. The cash gained from “cows” should be invested into stars to support their further growth. According to growth-share matrix, corporates should not invest into cash cows to induce growth but only to support them so they can maintain their current market share. Again, this is not always the truth. Cash cows are usually large corporations or SBUs that are capable of innovating new products or processes, which may become new stars. If there would be no support for cash cows, they would not be capable of such innovations.
Strategic choices: Product development, diversification, divestiture, retrenchment

Stars. Stars operate in high growth industries and maintain high market share. Stars are both cash generators and cash users. They are the primary units in which the company should invest its money, because stars are expected to become cash cows and generate positive cash flows. Yet, not all stars become cash flows. This is especially true in rapidly changing industries, where new innovative products can soon be outcompeted by new technological advancements, so a star instead of becoming a cash cow, becomes a dog.
Strategic choices: Vertical integration, horizontal integration, market penetration, market development, product development

Question marks. Question marks are the brands that require much closer consideration. They hold low market share in fast growing markets consuming large amount of cash and incurring losses. It has potential to gain market share and become a star, which would later become cash cow. Question marks do not always succeed and even after large amount of investments they struggle to gain market share and eventually become dogs. Therefore, they require very close consideration to decide if they are worth investing in or not.
Strategic choices: Market penetration, market development, product development, divestiture

Answer 1

Solution: Coca cola is a popular carbonated soft drink sold in stores, restaurants and in vending machines in over two hundred countries.

Fanta is a brand of fruit-flavored carbonated drinks marketed globally created by The Coca-Cola Company. There are more than 100 flavors worldwide. Fanta originated as a Coca-Cola substitute during the American trade embargo of Nazi Germanywhich affected the availability of Coca-Cola ingredients in 1940.

Fanta, a product of Coca Cola fits under the category of Question mark in the BCG portfolio management matrix because it has a High Growth but Low Market Share. Most of the business start as a question mark. They absorb great amount of cash if the market share remains unchanged. Since Fanta is a question mark, it has the potential to become star and eventually cash cow but can also become a dog. Investments made on fanta should be very high for converting it to star or cash cow.