Strategic Management

“YES BANK” Case Analysis

Prepared by:Harsh Vyas – 212011

Kali Prasad Pandey – 212013Kavita Kharayat – 212016

Kunal Nagpal – 212017Manish Sisodia – 212018

10/01/2014

YES BANK, one of the new generation private sector banks, was set up in India after reforms were introduced in the banking sector in the 1990s. Yes Bank entered the market in late 2004 when the banking space in India was already overcrowded with a number of public sector banks, private sector banks, and co-operative banks. Foreign multinational banks, which were growth-constrained, werealso waiting eagerly for the sector to open up further in 2009 to makea major foray into this emerging market. However, despite being a lateentrant, Yes Bank drew the attention of its competitors and analysts bythe speed at which it grew and by increasing its operations throughoutthe country.

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Banking reforms started in early 1990’s.

The reforms in the financial sector were based upon the recommendations of the Narsimhan committee.

India was dominated by the public sector banks which nearly had 83 % of the banking business.

Reforms like deregulation of interest rates, better disclosure norms, debt recovery tribunals, and new private sector banks were set up.

The second phase reforms took place in 2009 which included reducing NPA to 3%, extending credit facilities to rural areas, reducing higher rates of interest and giving more importance to priority lending sectors etc.

Yes bank was promoted by Rana kapoor and Ashok Kapur.

The bank went public in June 2005.

YES BANK is the only Greenfield license awarded by the RBI in the last 15 years.

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Vision: To be recognized as the ‘Best Quality Bank of the World in India’ by 2015 and to evolve as the Professionals’ Bank of India

Mission: To establish a high quality, customer centric, service driven, private Indian Bank catering to the ‘Future Businesses of India’. The Version 2.0 launched in April 2010 aims to achieve the following by March 2015:

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Means: Trust, Growth, Technology, Human Capital, Transparency and Responsible Banking.

Ends: Objective of becoming the Best Quality Bank of the World in India.

The foundation of this strategy lies in the name "YES", which underlines

the twin ethos of service and trust and the promise to deliver a truly delightful and unprecedented Banking experience to all customers.

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Political factor: RBI’s 1991 monetary policy and control systems To enlist the confidence of global investors and International

market players Number of legislative changes to enable competitive banking

systems

Economical factor Economic Fluctuation -Delay in Indian Vision of 2020 Every year RBI declares its 6 monthly policies If FDI limits are relaxed then more FDI are brought in India

through Banking channels

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Socio Economic factor Tradition maharaja Pratha Change in Lifestyle Literacy Rate Population

Technological Factor Foreign banking sectors entered in Indian market witb asserting

the technological based approach ATM Machines Credit Card Policies IT services and Mobile Banking

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Strength

Efficient Human capital Top management very experienced. High class technology Client Knowledge database Advanced risk management systems Pioneer in usage of internet services Ability to raise funds easily because of foreign shareholding

Opportunities

Building new client relationships Expanding the advisory and Customized services offered to

clients, investors, and banks Other competitor like ICICI bank has Primarily targets upper

middle class and upper class of the society. Expanding business to the middle and lower income groups

Once they identify a particular area, then they set up a specialized business unit to create a viable business for the bank.

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Porters Generic Strategies

The success of yes bank can be attributed to its “Differentiating Strategy.”

The bank differentiated itself from other players in the industry through its on three basic parameters.

• Knowledge banking approach • Emphasis on technology• Human resource

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A unique method of acquiring customers and retaining them.

The knowledge banking approach was its main pillar of differentiation and using it provided specialized service to various sunrise industries through domain expert.

Yes bank decided to follow an innovative approach to break into the heavily cluttered Indian commercial banking system.

The bank provides specialized service to the emerging sectors of the economy through better understanding of its clients business and industry.

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The bank focused on providing the customer with specialized banking service depending upon their requirement.

The bank identified some sectors of economy which had growth prospect:-

• Food and Agribusiness• Life Sciences• Telecom• IT• Media and Entertainment• Infrastructure

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“We have made a calibrated decision to invest in the best IT systems and practices in order to make its technology platform a strategic business tool for building a competitive advantages”

Srikrishan H ( Executive director)

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Yes bank was founded with the aim of providing the world class customer service to the customer using latest technology in the industry.

The bank consider technology as a strategic tool to differentiate itself from other banks.

• Corporate internet banking

• ATMs

• Mobile banking

• Phone banking

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The bank entered into the strategic partnership with Gartner inc. to formulate and implement the bank IT policy.

Price Water House Coopers to facilitate the confirmation of policies and process with ISO and six sigma norms.

It believed in outsourcing those activities that are not part of its core competencies.

It entered into a total outsourcing deal with Wipro Infotech in Dec 2004.

Achieving a high level of efficiency through the automation of operations.

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Maintaining centralized database and centralized processing for speedy retrieval of data.

Connectivity with customers and external agencies to provide a consistent experience at various “touch-points”.

Using the best systems for seamless integration of front, middle, and back offices.

Adopting the best inspection and security system to provide a

better comfort zone for customers of bank systems.

Using real-time environment for good disastrous recovery process and back-up systems.

Wireless advances.

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Yes Bank ---Employees are strategic asset for long term competitive asset.

Main objective

To emerge as one of the best employers in the country & as most preferred recruiter in the banking sector.

Higher pay for Retention of talented employees.

Performance management process.

Synergy at work.

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Yes entrepreneur in action Take break from regular work to focus on project of his/her interest to achieve individual goal.

Yes-Professional Entrepreneurship Program (YPEP)• Talent management initiative.• Talented middle & upper management for strategic initiative.

Yes-retail Entrepreneurship programme (YR EP)• To beat cutting edge skills of latest development to meet

future needs.

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Yes Mentor : Assigning a senior and dynamic employee as a mentor to new employee

Yes school of banking : To create a center of excellence for providing training in banking & other financial services in the banking .

Yes University and school Relations: Recruitment of meritorious students from university campuses. Offering internship to the students.

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Value Chain for a Differentiation Strategy of Yes BankValue Chain for a Differentiation Strategy of Yes Bank

Firm Infrastructure – Money Monitor, Mobile payments, Two-factor authentication, Mobile Banking , RFID, speech enabled IVR

Human Resources: Higher pay, Performance Management Process, Synergy at work, Yes entrepreneur in action, YPEP, YREP, Yes MentorYes School of Banking, Yes University and School Relations

Technology: Outsourcing ATMs, Mobile Banking, Phone Banking, Partnership for IT Policy, SIX Sigma Norms, Automation of Operations

InboundLogisticsCustomer Database

Technology

High Skilled Human capital

OperationsFaster turn around time.

Dedicated trade desk for handling trade transactions

Specialized advisory team for catering to SME

Outbound Logistics•high quality customer service.

• Customized. Products

• asset quality through disciplined credit risk management. and address inefficiencies in the Indian financial sector.

Marketing& SalesKnowledge Banking

Less advertising focus .

ServiceKnowledge Banking

Sophisticated & delighted customer service.

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Yes Bank has positioned itself as a bank which gives higher standard of services through product innovation for the diverse need of individual & corporate clients. So they want to highlight following points in their positioning segment :

Customer centric Service oriented Product innovation

Using TOWS matrix to generate alternative strategies

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Strength

Efficient Human capital Top management very experienced. High class technology Client Knowledge database Advanced risk management systems Pioneer in usage of internet services Ability to raise funds easily because of foreign shareholding

Opportunities

Building new client relationships Expanding the advisory and Customized services offered to

clients, investors, and banks Other competitor like ICICI bank has Primarily targets upper

middle class and upper class of the society. Expanding business to the middle and lower income groups

Grown at a tremendous pace.

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http://jainmatrix.com/2012/09/14/yes-bank/

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The Bank differentiated itself from other players through Unique “knowledge banking‘ approach” Emphasis of high end technology to provide innovative

solutions Highly qualified human resources. Rather than expanding very quickly, the bank focused on the

niche segments of the customers The bank catered to a niche segment which helped it to avoid

price competition Overall, it aimed at establishing itself as knowledge based and

technology driven bank that would cater to the needs of emerging Indian economy

Yes, the Business strategy implied by Yes Bank was a runaway success.

Unrelenting efforts to provide world class service coupled with steadfast maintenance of operational standards were the prime reasons for bank’s phenomenal growth.

The growth was even impressive considering it came at a time when the banking sector was on the verge of consolidation phase

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December 2006 the bank rated as third best private bank in India by business world

Ranked second best private bank in financial express - Ernst & young survey of India’s best for the year 2006.

YES BANK has recently become the first Indian Bank to become a signatory to the United Nations Global Compact

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http://www.yesbank.in/ http://en.wikipedia.org/wiki/Yes_Bank http://articles.economictimes.indiatimes.com/2013-10-23/

news/43326592_1_credit-growth-rajat-monga-profit-growth http://jainmatrix.com/2012/09/14/yes-bank/

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Thank you

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