Swot Analysis On The Basis Of 7 Ps

ANALYSIS OF BANKING INDUSTRY

On the Basis of

7Ps and S.W.O.T

Submitted To Submitted By

Mr. Vijay Nagrani Vedansh Jain (56)

Shish kant (48)

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S.NO PARTICULAR Page No.

1 ACKNOWEDGEMENT 3

2 EXECUTIVE SUMMARY 4

3 INTRODUCTION

Axis Bank 5

Yes Bank 6

Kotak Mahindra Bank 7

4 COMPARISON

Product 8

Price 10

Place 10

Promotion 11

People 12

Process 12

Physical evidence 13

5 SWOT ANSLYSIS 14

AXIS Bank 19

YES Bank 21

Kotak Mahindra Bank 23

6 APPENDIX 25

CONTENT

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ACKNOWLEDGEMENT

“For any successful work, it owes its thanks to many”

Hard work, knowledge, dedication & positive attitude all

are necessary to do any task successfully but one

ingredient which is also very important than others and at

times more important than others is cooperation &

guidance of experts and experienced person.

Firstly I would like to extend my heartfelt gratitude to Mr.

Vijay Nagrani, for his guidance throughout the project.

Without his support and cooperation I would have failed

in my endeavours and targets in this project Report.

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EXECUTIVE SUMMARY

The rise of retail lending in emerging economies like India has

been of recent origin. Asia Pacific’s vast population, combined

with high savings rates, explosive economic growth, and

underdeveloped retail banking services, provide the most

significant growth opportunities for banks. Banks will have to

serve the retail banking segment effectively in order to utilize the

growth opportunity.

Banking strategies are presently undergoing various

transformations, as the overall scenario has changed over the last

couple of years. Till the recent past, most of the banks had

adopted fierce cost cutting measures to sustain their

competitiveness. This strategy however has become obsolete in

the new light of immense growth opportunities for banking

industry. Most bankers are now confident about their high

performance in terms of organic growth and in realising high

returns. Nowadays, the growth strategies of banks revolve around

customer satisfaction. Improved customer relationship

management can only lead to fulfilment of long-term, as well as,

short-term objectives of the bankers. This requires, efficient and

accurate customer database management and development of

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well-trained sales force to develop and sustain long-term

profitable customer relationship.

The banking system in India is significantly different from that of

the other Asian nations, because of the country’s unique

geographic, social, and economic characteristics. Though the

sector opened up quite late in India compared to other developed

nations, like the US and the UK, the profitability of Indian banking

sector is at par with that of the developed countries and at times

even better on some parameters. For instance, return on equity

and assets of the Indian banks are on par with Asian banks, and

higher when compared to that of the US and the UK.

INTRODUCTION AXIS BANK

Axis Bank was the first of the new private banks to have begun

operations in 1994, after the Government of India allowed new

private banks to be established. The Bank was promoted jointly

by the Administrator of the specified undertaking of the Unit Trust

of India (UTI - I), Life Insurance Corporation of India (LIC) and

General Insurance Corporation of India (GIC) and other four PSU

insurance companies, i.e. National Insurance Company Ltd., The

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New India Assurance Company Ltd., The Oriental Insurance

Company Ltd. and United India Insurance Company Ltd.

The Bank today is capitalized to the extent of Rs. 359.76 crores

with the public holding (other than promoters) at 57.79%.

The Bank's Registered Office is at Ahmedabad and its Central

Office is located at Mumbai. The Bank has a very wide network of

more than 853 branches and Extension Counters (as on 30th June

2009). The Bank has a network of over 3723 ATMs (as on 30th

June 2009) providing 24 hrs a day banking convenience to its

customers. This is one of the largest ATM networks in the country.

The Bank has strengths in both retail and corporate banking and

is committed to adopting the best industry practices

internationally in order to achieve excellence.

INTRODUCTION OF YES BANK

YES BANK pursues a strong Employee Value Proposition of

‘Creating & Sharing Value’, with a vision to build an organisation,

driven by Professional Entrepreneurship, where all YES Bankers

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truly partner to direct, manage and accelerate the development

of YES BANK as the Young and Dynamic Bank of “Emerging India”.

It is this untiring and relentless passion for Professional

Entrepreneurship that has resulted in YES BANK being recently

ranked as the THIRD Best Bank in India by Business world. YES

BANK also received the Continuous Innovation in HR Strategy

award at The India times Mindscape Employer Branding Awards

2007.

YES BANK recognizes that the only real source of sustainable

competitive advantage for an organization is the power of its High

Quality Human Capital. Therefore, we foster a leadership mindset

that embraces meritocracy as a vital force to reward performance

and exceptional competency. We have also institutionalized

various key strategic initiatives including:

Our Objectives

To build a strong employer brand.

To attain a preferred employer status in the Banking and

Financial Services industry.

To ensure that the Bank is able to attract, engage and retain high

quality human capital for its long-term success.

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INTRODUCTION KOTAK MAHINDRA BANK

Established in 1985, the Kotak Mahindra group has been one of

India's reputed financial organizations. It was previously known as

the Kotak Mahindra Finance Limited, a non-banking financial

organization.

In February 2003, Kotak Mahindra Finance Ltd, the group's

flagship company was given the license to carry on banking

business by the Reserve Bank of India (RBI). This approval

created banking history since Kotak Mahindra Finance Ltd. is the

first non-banking finance company in India to convert itself in to a

bank as Kotak Mahindra Bank Ltd. The bank has a base of 8000+

employees.

Within a small span of 6 years, the bank has spread it wings in

several sphere of finances. Presently, spread in 82 cities in India,

the bank caters to the needs of its 5.9 million customers spread

throughout the length and breadth of country and even abroad.

Kotak Mahindra Bank has over 217 branches spread across 126

locations in the country offering both traditional banking products

and investment advisory services. The Bank has the products, the

experience, the infrastructure and most importantly the

commitment to deliver pragmatic, end to- end solutions that

really work.

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The Bank offers comprehensive business solutions that include

Trade Services, Cash Management Service and Credit facilities,

keeping in mind the needs of the business community.

COMPARISON ON THE BASIS OF 7Ps

PRODUCT

AXIS BANK YES BANK KOTAK BANK

Banking and

Savings

Banking and

Accounts

Convenience

Banking

Credit Cards

NRI Services

Demat

Deposits

Banking and

Savings

Banking and

Accounts

Convenience

Banking

Credit Cards

NRI Services

Demat

Deposits

Banking and

Savings

Banking and

Accounts

Convenience

Banking

Credit Cards

NRI Services

Demat

Deposits

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Corporate and

Institutional

Corporate

Finance

Treasury

Investment

Banking

Institutional

Equities

Investments and

Insurance

Life Insurance

Mutual Funds

Gold

Share Trading

Corporate and

Institutional

Corporate

Finance

Treasury

Investment

Banking

Institutional

Equities

Investments and

Insurance

Life Insurance

Mutual Funds

Gold

Share Trading

Corporate and

Institutional

Corporate

Finance

Treasury

Investment

Banking

Institutional

Equities

Investments and

Insurance

Life Insurance

Estate Planning

Mutual Funds

Gold

Share Trading

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Loans and

Borrowings

Car Finance

Commercial

Loans

Home Loans

Personal Loans

Loans Against

Property

Agriculture

Loan

Loans and

Borrowings

Car Finance

Commercial

Loans

Home Loans

Personal Loans

Loans Against

Property

Loans and

Borrowings

Car Finance

Commercial

Loans

Home Loans

Personal Loans

Loans Against

Property

PRICE


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The pricing decisions or the decisions related to interest and fee

or commission charged by banks are found instrumental in

motivating or influencing the target market.

The RBI and the IBA are concerned with regulations. The rate of

interest is regulated by the RBI and other charges are controlled

by IBA.

PLACE


827 Branch

3595 ATM

17 State In India

123 Branch

Future Target 2015 Is

3000 ATM Across

Country

Spread In 126 Cities In India

217 Branches Spread Across

Over 800 ATM

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PROMOTION


Advertising:

Television

Radio

Movies

Print Media:

Hoardings

Newspaper

Magazines

Publicity:

Campus Visits

Sponsorship

Sales Promotion:

Gifts

Personal Selling:

Cross-Sale

(Selling At

Competitors

Advertising:

Television

Radio

Movies

Theatres

Print Media:

Newspaper

Magazines

Publicity:

Campus Visits

Sponsorship

Sales Promotion:

Gifts

Personal Selling:

Cross-Sale (Selling

At Competitors

Advertising:

Television

Radio

Print Media:

Hoardings

Newspaper

Magazines

Publicity:

Campus Visits

Sponsorship

Sales Promotion:

Gifts

Personal Selling:

Cross-Sale (Selling

At Competitors

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Place)

Personalized Service

Place)

Personalized

Service

Place)

Personalized

Service

PEOPLE


14000 Employee base 3150 Employee Base 9800 Employee Base

PROCESS


Standardization: Bank has got standardized procedures got typical transactions. In fact not only all the branches of a single-bank, but all the banks have some standardization in them. This is because of the rules they are subject to. Besides this, each of the banks has its standard forms, documentations etc. Standardization saves a lot of time behind individual transaction.

Customization: There are specialty counters at each branch to deal with customers of a particular scheme. Besides this the customers can select their deposit period among the available alternatives.

Number of steps: numbers of steps are usually specified and a specific pattern is followed to minimize time taken.

Simplicity: Banks various functions are segregated. Separate counters exist with clear indication. Thus a customer wanting to

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deposit money goes to ‘deposits’ counter and does not mingle elsewhere. This makes procedures not only simple but consume less time. Besides instruction boards in national boards in national and regional language help the customers further.

Customer involvement: ATM does not involve any bank employees. Besides, during usual bank transactions, there is definite customer involvement at some or the other place because of the money matters and signature requires.

PHYSICAL EVIDANCE


Internet/Web

Pages

Paperwork

Brochures

Furnishings

Business Cards

Building

Signage

Financial

Reports

Tangibles

Punch Lines

Employee’s

Dress Code

Internet/Web

Pages

Paperwork

Brochures

Furnishings

Business Cards

Building

Signage

Financial Reports

Tangibles

Punch Lines

Employee’s

Dress Code

Internet/Web

Pages

Paperwork

Brochures

Furnishings

Business Cards

Building

Signage

Financial

Reports

Tangibles

Punch Lines

Employee’s

Dress Code

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SWOT ANALYSIS OF BANKS

STRENGTH

Indian banks have compared favourably on growth, asset

quality and profitability with other regional banks over the

last few years. The banking index has grown at a

compounded annual rate of over 51 per cent since April

2001 as compared to a 27 per cent growth in the market

index for the same period.

Policy makers have made some notable changes in policy

and regulation to help strengthen the sector. These changes

include strengthening prudential norms, enhancing the

payments system and integrating regulations between

commercial and co-operative banks.

Bank lending has been a significant driver of GDP growth

and employment.

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Extensive reach: the vast networking & growing number of

branches & ATMs. Indian banking system has reached even

to the remote corners of the country.

The government's regular policy for Indian bank since 1969

has paid rich dividends with the nationalisation of 14 major

private banks of India.

In terms of quality of assets and capital adequacy, Indian

banks are considered to have clean, strong and transparent

balance sheets relative to other banks in comparable

economies in its region.

India has 88 scheduled commercial banks (SCBs) - 27 public

sector banks (that is with the Government of India holding a

stake)after merger of New Bank of India in Punjab National

Bank in 1993, 29 private banks (these do not have

government stake; they may be publicly listed and traded on

stock exchanges) and 31 foreign banks. They have a

combined network of over 53,000 branches and 17,000

ATMs. According to a report by ICRA Limited, a rating

agency, the public sector banks hold over 75 percent of total

assets of the banking industry, with the private and foreign

banks holding 18.2% and 6.5% respectively.

Foreign banks will have the opportunity to own up to 74 per

cent of Indian private sector banks and 20 per cent of

government owned banks.

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WEAKNESS

PSBs need to fundamentally strengthen institutional skill

levels especially in sales and marketing, service operations,

risk management and the overall organizational

performance ethic & strengthen human capital.

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Old private sector banks also have the need to

fundamentally strengthen skill levels.

The cost of intermediation remains high and bank

penetration is limited to only a few customer segments and

geographies.

Structural weaknesses such as a fragmented industry

structure, restrictions on capital availability and deployment,

lack of institutional support infrastructure, restrictive labour

laws, weak corporate governance and ineffective regulations

beyond Scheduled Commercial Banks (SCBs), unless industry

utilities and service bureaus.

Refusal to dilute stake in PSU banks: The government

has refused to dilute its stake in PSU banks below 51% thus

choking the headroom available to these banks for raining

equity capital.

Impediments in sectoral reforms: Opposition from Left

and resultant cautious approach from the North Block in

terms of approving merger of PSU banks may hamper their

growth prospects in the medium term.

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OPPORTUNITY

The market is seeing discontinuous growth driven by new

products and services that include opportunities in credit

cards, consumer finance and wealth management on the

retail side, and in fee-based income and investment banking

on the wholesale banking side. These require new skills in

sales & marketing, credit and operations.

Banks will no longer enjoy windfall treasury gains that the

decade-long secular decline in interest rates provided. This

will expose the weaker banks.

With increased interest in India, competition from foreign

banks will only intensify.

Given the demographic shifts resulting from changes in age

profile and household income, consumers will increasingly

demand enhanced institutional capabilities and service

levels from banks.

New private banks could reach the next level of their growth

in the Indian banking sector by continuing to innovate and

develop differentiated business models to profitably serve

segments like the rural/low income and affluent/HNI

segments; actively adopting acquisitions as a means to grow

and reaching the next level of performance in their service

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platforms. Attracting, developing and retaining more

leadership capacity

Foreign banks committed to making a play in India will need

to adopt alternative approaches to win the “race for the

customer” and build a value-creating customer franchise in

advance of regulations potentially opening up post 2009. At

the same time, they should stay in the game for potential

acquisition opportunities as and when they appear in the

near term. Maintaining a fundamentally long-term value-

creation mindset.

reach in rural India for the private sector and foreign banks.

With the growth in the Indian economy expected to be

strong for quite some time-especially in its services sector-

the demand for banking services, especially retail banking,

mortgages and investment services are expected to be

strong.

the Reserve Bank of India (RBI) has approved a proposal

from the government to amend the Banking Regulation Act

to permit banks to trade in commodities and commodity

derivatives.

Liberalisation of ECB norms: The government also

liberalised the ECB norms to permit financial sector entities

engaged in infrastructure funding to raise ECBs. This enabled

banks and financial institutions, which were earlier not

permitted to raise such funds, explore this route for raising

cheaper funds in the overseas markets.

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Hybrid capital: In an attempt to relieve banks of their

capital crunch, the RBI has allowed them to raise perpetual

bonds and other hybrid capital securities to shore up their

capital. If the new instruments find takers, it would help PSU

banks, left with little headroom for raising equity.

Significantly, FII and NRI investment limits in these securities

have been fixed at 49%, compared to 20% foreign equity

holding allowed in PSU banks.

THREATS

Threat of stability of the system: failure of some weak banks

has often threatened the stability of the system.

Rise in inflation figures which would lead to increase in

interest rates.

Increase in the number of foreign players would pose a

threat to the PSB as well as the

private players.

SWOT ANALYSIS OF AXIS BANK

1. STRENGTH

Extremely Competitive And Profitable Banking Franchise

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Banking Services Include Corporate Credit, Retail Banking,

Business Banking, Capital Markets, Treasury And International

Banking.

Sound Technological Platform With Centralized Database And

Operations

Retail Banking Savings Bank Deposits Grew To Rs. 25,822

Cr. On 31st March 2009 From Rs. 19,982 Cr. As On 31st March

2008 Showing A Year On Year Growth Of 29%.

Corporate Banking: Current Account deposits grew by 24%

yoy, from Rs. 20,045 crores as at end March’08 to Rs. 24,822

crores as at end March’09.

Support of various Promoters

Strong technology

Total Deposits Rs 1,17,374 crore

Net Advances Rs 81,557 crore

Net NPA 0.35%

Capital Adequacy Ratio 13.69%

2. WEAKNESS

Not having Image UTI (fraud)

Higher cost

Customer service

Market Capitalization Very Low

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3. OPPORTUNITY

Large retail and corporate market

Wide scope in rural India

Other Activity (Non Banking Activity)

People are become more service oriented

4. THREAT

Other better Saving, investment option available (like

Insurance, Mutulfund, Real-estate, Gold)

Government Rules And Regulation

Very high competition with Private sector (ICICI Bank, HDFC

bank) or public sector (BOB, PNB) Bank.

Capital Market slow-down

Rising Rates

Future Market Trands

SWOT ANALYSIS OF YES BANK

1.STRENGTH

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High Quality, Customer Centric, Service Driven, Private

Indian Bank Catering To The “Future Industries Of India”.

The Bank Has Adopted International Best Practices, The

Highest Standards Of Service Quality And Operational

Excellence,

World-Class Team, Based On Professional Recruitment

Methodologies, And Attract The Best Talent In The Industry

Building Learning And Development Solutions That

Continuously Enhance Employee Value, High Performance

Culture.

Credible And Transparent Performance Management Process

Robust Rewards And Recognition Strategy

Strong technology, Well capitalized

Total Deposits Rs 1,61,694 million

Net Advances Rs 124,031 million

Net NPA 0.33%

Capital Adequacy Ratio 16.6%

2. WEAKNESS

Less wide network

Not in every state

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Less promotional activity

Unknown brand

3. OPPORTUNITY

Very wide market

Other activity(insurance, stock broking, mutulfund)

Wide scope in rural area

4. THREAT

Very high competition Private bank market (ICICI Bank, HDFC

bank), In public sector (BOB, PNB)

Government Policy




Rising Rates

SWOT ANALYSIS OF KOTAK MAHINDRA BANK

1.STRENGTHS:

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Capital markets franchise

Professional management

Strong technology

Well capitalized

Construction equipment financing business

Comprehensive cash management system

Capturing supply chain businesses

NPA is at 1.30%

Total Deposits Rs 15,645 crore

Net Advances Rs 16,625 crore

Capital Adequacy Ratio 16%

2.WEAKNESS:

Wholesale Funding Costs

Latecomers

Less Promotional Activities

3. OPPORTUNITIES:

Low loan and retail penetration

Stressed Asset Business

Plans to invest Rs. 120 crores over three years for

infrastructure, technology and personnel

4. THREATS:

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Competition

Rising Rates



Government Rules And Regulation

APPENDIX

Website

Newspaper

Magazine

Annual Report

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Swot Analysis On The Basis Of 7 Ps

Education

Transcript of Swot Analysis On The Basis Of 7 Ps