A STUDY OF TEA EXPORT MARKETING IN SRI LANKA: APPLICATION OF BOSTON CONSULTING GROUP MATRIX

Abstract

In this high competitive era, strategic management models are increasingly being used to solve companies’ problems through analyzing current situations and helping to design an effective strategic planning in developed countries. However, these models are rarely applied in industry and commerce of developing countries. This study has used Boston consulting group (BCG) matrix to analyze the market for tea export in Sri Lanka. Data on tea exports by destination over a period of 5 years (2005 – 2009) were used. Results of the study indicated that Sri Lankan tea has predominantly been marketed to middle east  destination that includes UAE, Kuwait, Saudi Arabia, as well as Russia, Iran, Jordan, Netherland and Syria and in general these markets growth increased averagely 7.9% over the last five years. The tea trade in Sri Lanka accounts 18.3% in global export tea market. When considering the BCG classification, Kuwait, Jordan, Syria, Hong Kong and Libiya emerge as star markets for tea export and these markets have business growth and profitability opportunities. Apart from that, cash cow markets for Sri Lanka are Russia, UAE, Turkey, Saudi Arabia, and Ukrain. These markets are attractive on the basis of two variables of the BCG matrix and should be maintained as they represent significant sources of foreign exchange for Sri Lanka. If the role of tea export to the country economic vista is to be consolidated, there is a need to understand the social, economic, cultural, institutional and technological factors that affect consuming sub-populations in these countries. Appropriate product, place, and promotional strategies for these destinations are also discussed.

For full paper: fmscresearch@sjp.ac.lk