Yes Bank is one of the most famous bank of India and consider as the fourth biggest bank in private sector. It was founded by the Ashok Kapoor and Rana Kapoor back in 2004. It is the only Bank that has the Greenfield License rewarded by RBI in previous two decades. It is the “Full Service Commercial Bank”, which has rapidly grown and build the retail, SME, and corporate banking franchise, investment banking, financial markets, branch banking, corporate finances, transaction banking, Wealth management business units and lines, and business banking across the India. It is also listed in Indian Stock exchange, right after a year it was founded. As the Yes Bank is involved in diversified businesses and fields, the bank needs to evaluate its services and product, before making further investment (Wharton, 2012).
The BCG Matrix can be helpful for the Bank in this regard, as it helps in making the effective decision after considering the profitability level, with the two aspects; market share and the market growth. However, the products are categorize in four main quadrants; star, cash cow, question mark- also known as problem child, and dog. This is one of the most used tool and widely used by different companies. Here is the BCG matrix of Yes Bank.
Cash Cows
The products of this category have the low market growth rate but high market share, which reflects to the idea of consuming less cash and generate more revenue. The earned revenue could be used for the operational expenses or for other investment purpose. Corporate and institutional banking can be consider as the cash cow of Yes Bank, as it is successfully able to earn more than Rs.7.5. The bank is growing rapidly, and became the consumer choice. Because of is differentiation strategies, Yes Bank is expanding across India. And can be grown more, by availing the opportunities (Singh, 2018).
Stars
The quadrant carries the products or services which have high market share and high market growth rate. It consumes more and also earn more, but the revenue is less than the cash cow. Little attention can turn the star items into cash cow, which will benefit the company. Business banking of Yes bank is very famous, which can help in considering it as the Star item of Bank. It needs investment because of growth purpose, but also generate inflows. It is necessary for the Bank to increase the investment and marketing efforts to become the cash cow for the bank (Pandey, 2014).
Question Marks
This quadrant is also known as problem child, because of low market share level and high market growth rate. The high market growth needs high investment for the purpose of different marketing objectives. The market share needs to be increased with heavy investment or else it will be the burden for the company. Retail banking can be consider as the question mark for Yes bank, as it needs to grow more and investment is needed in order to be star item or cash cow. Yes Bank needs to pay attention to this field despite of having others, in order to achieve the objective and maintain the position (Singh, 2018).
Dogs
The quadrant has the low market growth rate and low market share, which makes it for the company to be hand to mouth in the same category. The products are mostly on the breakeven level. In some cases the products need to be shut down if it is continuously making the loss. The failed project of QIP can be consider as the dog for the Yes Bank, where the bank was unfortunate in deferring the proposed private institutional placement of about $1bn (Asthana, 2016).
References
Asthana, S. 2016. Why QIPs said no to Yes Bank? [Online], Available at: https://www.business-standard.com/article/finance/why-qips-said-no-to-yes-bank-116090900826_1.html, [Accessed on: 27th September, 2018].
Pandey, K. 2014. Yes Bank growth strategy. [Online], Available at: https://www.slideshare.net/kppandeyji/group-2-yes-bank, [Accessed on: 27th September, 2018].
Singh, S. 2018. Yes Bank. [Online], Available at: https://www.scribd.com/presentation/45838167/Yes-Bank-Final-PPT, [Accessed on: 27th September, 2018].
Wharton, 2012. Can YES Bank, India’s Youngest and Fastest-growing Bank, Be a Model for Newer Entrants? [Online], Available at: http://knowledge.wharton.upenn.edu/article/can-yes-bank-indias-youngest-and-fastest-growing-bank-be-a-model-for-newer-entrants/, [Accessed on: 27th September, 2018].