ALIN GANGULYCHANDAN SAHA

SHANKARSHAN SUDARSHANSHOVIT SINGH

Objective COMPETITIVE

STRATEGY

OF A

LATE ENTRANT

Vision• Vision: To create a commercially viable financial

institution that incorporates sustainable development within core business functions

• Mainstream sustainability through multi-stakeholder engagement both internally & externally

• Link shareholder value with sustainable development of India (Fourth Generation Sustainability)

• Engage in strategy development (in thought) and execution (in action)

Yes BankYes bank, one of the new generation private bank , entered

Indian market in late 2004 when the banking sector in India was already overcrowded by no of public bank

But inspite of late enterent the bank grew up with such a fast pace that it drew the attention of analysist and extend its operations to all over the country

Yes BankIn December 2006 the bank rated as third best private

bank in India by business world and won many other awards.

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

Yes BankThe yes bank was promoted by Rana kapoor and Ashok Kapur

with assistance from RoboBank Kapoor and kapur together own 52.5 % of the initial promoters

equity of 20 mWhile the Indian promoters had 39 % stake in the bank ,

RoboBank had 20 % stake and FII held 20 %The bank went public in June 2005. IPO was over subscribed

30 times

Some Facts YES BANK is the only Greenfield license awarded by the RBI in the

last 15 years.

YES BANK has recently become the first Indian Bank to become a

signatory to the United Nations Global Compact.

More than 125 branches over 100 locations across India as well as 93

off-site ATMs.

YES BANK has been ranked # 3 in “The BW Banking Special 2006

– A Survey of India's Best Listed Public and Private Banks”.

Stack holders

Yes bank segmentationYes bankCorporate & institutional banking

Companies with turnover of over Rs. 7.5 bn

Business bankingCompanies with turnover between Rs .5bn and Rs 7.5 bn

Retail bankingIndividual with annual turnover income between Rs.5bn and

Rs 5mn

Strategic Capability“The adequacy and stability of the resources and competences

of an organization for it to survive and prosper.”TANGIBLE AND INTAGIBLE.1) PHYSICAL : Building or the production capacity.2) FINANCIAL : Capital , cash, debtors and products.3) HUMAN : Number of employees and skills.4) Intellectual Capital : Patents , brands , business systems

and customer database

Corporate and Commercial BankingCustomer Segmentation

Large Corporate with more than INR 10 billion turnover.Government companies and PSUs, Financial Institutions and

Banks, selected multinational corporations

Business Strategy

Capitalize on current market conditions.

Build long term, comprehensive relationships for these

Corporate.

Commercial BankingCustomer Segmentation

Emerging mid-Corporates of India with turnover between INR

1.0 billion and INR 10 billion

Business Strategy

Selectively identify emerging sectors & companies for long

term institutionalization of relationship capital.

Become a privileged growth partner for these large Corporates

of tomorrow.

PerformanceThe bank growth as per the sensex…

Competition..

Growth speaks through figures.

Differentiation strategyThe bank differentiated itself from other players in the

industry through its unique “knowledge banking approach” , emphasizing on technology and human resource.

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

Differentiation The success of yes bank can be attributed to its

differentiating strategy

The bank differentiated itself on three basic parametersKnowledge banking approachEmphasis on technologyHuman resource

Knowledge BankingYes bank decided to follow an innovative approach to

break into the heavily cluttered Indian commercial banking system.

Knowledge banking--- a unique method of acquiring customer and retaining them.

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

Knowledge banking contd..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:-

1.Food and agribusiness2.Infrastructure business3.Life science and biotechnology4.Telecommunication5.IT6.Media and entertainment7.Real estate

TechnologyYes 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 bankingATMsMobile bankingPhone banking

TechnologyThe 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.

I-flex solution ltd. it used FLEXCURE, a universal banking solution software, as its core banking system for retail as well as corporate banking.

Yes bank use FLEXCUBE to provide key banking solution to its customers.

HUMAN RESOURCE

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 .

Key initiatives by bank to recruit and Key initiatives by bank to recruit and train manpowertrain manpower

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

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

3. Yes-retail Entrepreneurship programme (YREP):To inculcate cutting edge skills of latest development to meet future needs.

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

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

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

PROMOTIONSLess advertising focus .

Sophisticated & delighted customer service.

Statics Statistics shows that the bank was primarily in metros and

other places that provided them a sound customer base, who were knowledgeable and used latest technology.

Yes bank had access to latest technology.Yes bank had good promoters.They had the ability to raise funds easily because of

foreign shareholding.Outsourcing its non core business.Top management very experienced.

IndiaSignificant strengths in

agriculture, horticulture, dairy, poultry, etcAgro-climatic diversityProduction leadership in

many areasRapid urbanizationGovt. according priority

statusGrowth in Organized food

retail

India’s share in global production

India’s prices as % of world prices

The Growth Story

Grown at a tremendous pace.

Contd…First two quarters since it began operations in (2004-

2005) its balance sheet was standing at Rs.1,300 million, which made it one of the most successful ventures in India.

Started its operations with just 250 employees and two branches.

October 2007, it was operating with 60 branches and 3,263 employees.

A Successful Market Entry

The that helped the bank to succeed are: high-end technology. 'knowledge banking' approach. highly qualified human resources.

Knowledge banking initiative drew a lot of interestThe bank catered to a niche segment which helped it to

avoid price competition.

ConclusionThe high growth rates of the Indian economy provided

tremendous opportunities for the Indian banking sector, the future also pose a challenge as foreign players enter Indian market, the bank expected to expand mostly in the small and medium towns, where it saw good growth prospects. The opening up of the economy saw many small towns becoming prosperous, but most of these towns had still not been tapped by the private sector banks.