(ii) BCG MATRIX

The BCG matrix is a chart that had been created by Bruce Henderson for the Boston
Consulting Group in 1970 to help corporations with analyzing their business units or product
lines. This helps the company allocate resources and is used as an analytical tool in brand
marketing, product management, strategic management, and portfolio analysis.

HDFC Bank
HDFC BANK stands at star position in BCG matrix. As HDFC bank have the high market
growth and they also have high market share. There is a lot of growth potential for the
banking industry because of increasing disposable income of customers, increasing working
class, more volatility in other markets also increasing importance of savings and already
discussed almost 30% of the market is still untapped.
HDFC Insurances
In insurance sector HDFCs most of the products are in star position. HDFC insurance
products have high market share and high growth rate. So we have lot of opportunity for
investment.
HDFC Mutual Funds
Mutual fund stands at cash cow. This shows that HDFC high market share and low market

growth rate in mutual funds. This means we should only focus on profitable products and try
to investment on those products which are low market growth rate but perform well if proper
investment is theirs.
Growth and margins
Having the funds to grow is only half the problem. However, will the company actually
grow? The sluggish rate of growth in the economy suggests that growth could indeed pose a
problem. In fact, in the first quarter of the financial year-ended 2009, HDFC Bank was
able to record only a 43 per cent growth in profits. This, however, may not be good
enough to justify the valuation commanded by the stock. And if, due to the slowdown, the
bank is forced to invest in government securities rather than in loans, which generate higher
returns, the margins will be affected. On the other hand, competition from other banks may
increase. Hence it can be concluded that HDFC BANK stands at cash cow in BCG matrix.

Figure

10 :- BCG Matrix