The business units that are identified as question mark are those who do not have a large market share, despite the industry holding growth opportunities for the specific business segment. Another factor that has contributed in making it a star is the potential for growth in the emerging markets, which offer significant growth opportunities to the business on a global scale. Since the rise in population and increased urbanization leads to increased consumption, nestle water is expected to become a sustainable source of earnings for the company. Therefore, it can be seen that the mineral water brand has to potential to become a cash cow in the next 10 years. It has been further mentioned that the bottled water is likely to gain an increased market share in the coming years due to the rising number of consumers purchasing mineral water. The brand Nestle pure life is currently being supplied to 40 regions across the globe (Nestle, 2015). Even though new mineral water brands have been introduced by other companies, the mineral water produced by Nestle has maintained a significant position. The mineral water packaged by Nestle is the business unit which is operating in an industry that has the potential to grow further. However the point of difference between cash cow and star is that the industry has a faster growth rate and is still in the phase of development. The business units that are deemed as stars hold a large market share as well. According to Gretler (2016), the coffee brand has illustrates a strong performance over the years, with an increase in the sales in 2015. Another product that can be identified as a cash cow is the coffee brand, Nescafe which is being sold in a mature industry. Even though the industry has grown over the years, reaching a point of maturity, Nesquik continues to be a source of revenue for Nestle.
Moreover, the brand has established a prominent position in the flavoured milk category as well. Along with the chocolate powder, the brand also offers other flavours for consumers. In 2014, the brand was able to generate a sales of US$850 million, which indicates the market share captured by this business unit (Lee, 2015). The brand Nesquik can be regarded as a cash cow as it is one of the leading milk flavour powder brands on a global scale. Despite the slowdown of market growth, the business units identified as cash cows continue to be lucrative for the organization due to the large market share. As a result, the pace of growth has declined. The cash cow is denoted by a high market share, however the growth rate of the industry is slow as the market has grown to the point of maturity. The following section presents BCG Matrix of Nestle: Cash Cows Boston Consulting Group Matrix (BCG Matrix) is a useful tool to understand the potential of different business units being managed by an organization.
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