BCG Growth-Share Matrix

include in the star while union bank of India is in cash cow

Hdfc bank interested in increasing their market share but they want to grow profitably.

Poters five forces model

Porter's 5 Forces Analysis 1. Threat of New Entrants. The average person can't come along and start up a bank, but there are services, such as internet bill payment, on which entrepreneurs can capitalize. Banks are fearful of being squeezed out of the payments business, because it is a good source of fee-based revenue. Another trend that poses a threat is companies offering other financial services. What would it take for an insurance company to start offering mortgage and loan services? Not much. Also, when analyzing a regional bank, remember that the possibility of a mega bank entering into the market poses a real threat. 2. Power of Suppliers. The suppliers of capital might not pose a big threat, but the threat of suppliers luring away human capital does. If a talented individual is working in a smaller regional bank, there is the chance that person will be enticed away by bigger banks, investment firms, etc. 3. Power of Buyers. The individual doesn't pose much of a threat to the banking industry, but one major factor affecting the power of buyers is relatively high switching costs. If a person has a mortgage, car loan, credit card, checking account and mutual funds with one particular bank, it can be extremely tough for that person to switch to another bank. In an attempt to lure in customers, banks try to lower the price of switching, but many people would still rather stick with their current bank. On the other hand, large corporate clients have banks wrapped around their little fingers. Financial institutions - by offering better exchange rates, more services, and exposure to foreign capital markets - work extremely hard to get high-margin corporate clients. 4. Availability of Substitutes. As you can probably imagine, there are plenty of substitutes in the banking industry. Banks offer a

suite of services over and above taking deposits and lending money, but whether it is insurance, mutual funds or fixed income securities, chances are there is a non-banking financial services company that can offer similar services. On the lending side of the business, banks are seeing competition rise from unconventional companies. Sony (NYSE: SNE), General Motors (NYSE:GM) and Microsoft (NASDAQ:MSFT) all offer preferred financing to customers who buy big ticket items. If car companies are offering 0% financing, why would anyone want to get a car loan from the bank and pay 5-10% interest? 5. Competitive Rivalry. The banking industry is highly competitive. The financial services industry has been around for hundreds of years and just about everyone who needs banking services already has them. Because of this, banks must attempt to lure clients away from competitor banks. They do this by offering lower financing, preferred rates and investment services. The banking sector is in a race to see who can offer both the best and fastest services, but this also causes banks to experience a lower ROA. They then have an incentive to take on high-risk projects. In the long run, we're likely to see more consolidation in the banking industry. Larger banks would prefer to take over or merge with another bank rather than spend the money to market and advertise to people.

MISSION
I. World Class Indian Bank

II. III. IV.

Benchmarking against international standards. To build sound customer franchises across distinct businesses Best practices in terms of product offerings, technology, service levels, risk management and audit & compliance

VISION STATEMENT OF HDFC BANK

The HDFC Bank is committed to maintain the highest level of ethical standards, professional integrity and regulatory compliance. HDFC Banks business philosophy is based on four core values such as:-

1. Operational excellence. 2. Customer Focus. 3. Product leadership. 4. People.

Positioning Strategy

Positioning is the act of designing the companys offering and image to occupy a distinctive place in the target markets mind.

Positioning starts with a product. A piece of merchandise, a service, a company, an institution, or even a person. But positioning is not what you do to a product. Positioning is what you do the mind of the prospect. That is, you position the product in the mind of prospect. A companys differentiating and positioning strategy must change as the product, market, and competitors change over time. Once the company has developed a clear positioning strategy, it must communicate that positioning effectively.

SWOT ANALYSIS OF HDFC BANK

STRENGTHS

HDFC is the strongest and most venerable play on Indian mortgages over the long term. The management of the bank is termed to be one of the best in the country. HDFC has differentiated itself from its peers with its diversified network and revamped distribution strategy HDFC has been highly proactive in passing on the cost and benefit to customers. Besides the core business, HDFCs insurance, AMC, banking, BPO, and real estate private equity businesses are also growing at a rapid pace and the estimated value of its investments/subsidiaries explains ~30% of HDFCs market capitalization.

High degree of customer satisfaction. Lower response time with efficient and effective service. Dedicated workforce aiming at making a long-term career in the field. Products have required accreditations. Superior customer service vs. competitors Large share of low-cost deposits, higher net interest margin Better quality of assets, NPA of 0.4 per cent Free float available, FIIs can buy its stock Higher profitability

OPPORTUNITIES

Fast growing insurance business in the country. Untapped rural markets. Could extend to overseas broadly Fast-track career development opportunities on an industry-wide basis. An applied research centre to create opportunities for developing techniques to provide added-value services. Unique partnership to create job opportunities for IFBIs PGDBO students HDFC bank automates business processes with Staff ware; HDFC Bank anticipates major cost savings whilst maintaining high levels of customer service thanks to new enterprise software agreement.

HDFC Bank plans to set up a non-banking finance company (NBFC) to undertake fundbased activities.

THREATS

Loss of market share to commercial banks and HFCs Higher than expected increase in funding cost Risk of fraud and NPA accretion due to increase in interest rates and fall in property prices is inherent to the mortgage business

Lack of infrastructure in rural areas could constrain investment. High volume/low cost market is intensely competitive. Very high competition prevailing in the industry Extension overseas holds a lot of risk! Threat from credit card collections dept. Varying and In-Convenient ECS dates. Unlike Government Banks, an account needs a minimum balance of Rs.10,000

Opportunities

Threats

Profit margins will be good. Could broadly. extend to overseas

Legislation could impact. Great risk involved Very high competition

New specialist applications. Could seek better customer deals.

prevailing in the industry. Vulnerable to reactive attack by major competitors

Fast-track career development opportunities on an industrywide basis.

Lack of infrastructure in rural areas could constrain

An applied research centre to create opportunities for developing techniques to provide added-value services.

investment.

High volume/low cost market is intensely competitive.

HDFC BANK uses Kaizan technique

Every successful organization has their own strategy to win the race in the competitive market. They use some technique and methodology for smooth running of business. HDFC BANK also acquired the Japanese technique for smooth running of work and effective work place organization. Five S Part of Kaizen is the technique which is used in the bank For easy and systematic work place and eliminating unnecessary things from the work place. Five S S-1 S-2 SORT SYSTEMATIZE SEIRI SEITON

S-3 S-4 S-5

SPIC-N-SPAN STANDARDIZE SUSTAIN

SEIRO SEIKETSU SHITSUKE

BENEFIT OF FIVE S It can be started immediately. Everyone has to participate. Five S is an entirely people driven initiatives. Brings in concept of ownership. All wastage is made visible.

(1) SORT:It focuses on eliminating unnecessary items from the work place. It is excellent way to free up valuable floor space. It segregates items as per require and wanted.

Frequently Required

Less Frequently Required

Remove everything from workplace
Junk

Wanted but not required

Junk

(2) SYSTEMATIZE:Systematize is focus on efficient and effective Storage method. That means it identify, organize and arrange retrieval. It largely focuses on good labeling and identification practices. Objective: - A place for everything and everything in its place. (3) SPIC- n - SPAN:Spic-n-Span focuses on regular clearing and self inspection. It brings in the sense of ownership. (4) STANDERDIZE:It focuses on simplification and standardization. It involves standard rules and policies. It establish checklist to facilitate autonomous maintenance of workplace. It assign responsibility for doing various jobs and decide on Five S frequency. (5) SUSTAIN:-

It focuses on defining a new status and standard of organized work place. Sustain means regular training to maintain standards developed under S-4. It brings in self- discipline and commitment towards workplace organization.

HDFC BANK PRODUCT PORTFOLIO

Products and services at a glance
HDFC Bank mainly provides three kinds of banking services:

Personal Banking NRI Banking Wholesale Banking

CRM

The Bank has also integrated service quality objectives with the business objectives of the Bank, to bring about the clubbed results of Customer Delight and improved profitability. The Banks data warehouse, Customer Relationship Management (CRM) and analytics solutions have helped it target existing and potential customers in a cost effective manner and offer them products appropriate to their profile and needs.

Apart from reducing costs of acquisition, this has also led to deepening of customer relationships and greater efficiency in fraud control and collections resulting in lower credit losses. The Bank is committed to investing in advanced technology in this area which will provide cutting edge in the Banks product and service offerings. The Bank has a number of business groups catering to various segments of its wholesale banking customers with a wide range of banking services covering their working capital, term finance, trade services, cash management, foreign exchange and electronic banking requirements.