Strategies for Business Development of the Branch

PROJECT REPORT ON
STRATEGIES FOR
BUSINESS DEVELOPMENT
OF THE BRANCH

Strategies for Business Development of the Branch

Contents:

Chapter no.

Title
Executive Summary

1.

2.

3.

1.1 Introduction

7-11

1.2 Objectives

12

1.3 Research Methodology

13

Analysis

14-18

2.1 Branch analysis

15

2.2 Market analysis

16

2.3 SWOT analysis

17-18

Findings / Business development strategy

19-24

3.1 Setting strategic objectives

4.

Page no.

20

3.2 Formulation of strategy/ Recommendations

21-24

Conclusion

25-26

Bibliography

27

Executive Summary:
2

Strategies for Business Development of the Branch

Banks offer various products to its customers such as personal loans, home loans, savings
account, credit cards and so on. It is very essential for a Bank to know, which user to target for
what product and when. The goal of data analytics and data mining department is to arrive at
accurate answers to these 3 questions, (Which User, What Product, When), and it is a rewarding
exercise for the bank, branch and definitely to the employee as well to the existing and
prospective customer of the bank.
The problem is very simple. A customer may have purchased a single product or multiple
products from a bank. The Bank would ideally like if all its customers bought all of its products.
This possibility however does not exist, therefore without any targeting model; the Bank would
be wasting money, time and resources by randomly targeting customers for its products.
Using a little sophistication of data mining techniques, we would be able to build a targeting
model or a response model on customer base. A response model is a predictive model which
estimates the future behavior of a given customer even before it occurs. Even with a fair amount
of accuracy it can be very useful for Banks in saving majority of costs in various
departments/channels. There are various types of data available for analysis like demographic,
behavioral & attitudinal. The above data can be very useful in data mining methods, however
the cost, usefulness and expertise to store / retrieve data have to be assessed and judged.
This project is an honest attempt to find out the techniques and methods which are useful in
identifying customer needs and then formulating strategies for business development by
providing complete banking solutions & satisfaction to customers.

Strategies for Business Development of the Branch

Chapter 1
Introduction

Strategies for Business Development of the Branch

Chapter 1:
1.1 Introduction:

Bank of Baroda
It has been a long and eventful journey of almost a century across 25 countries. Starting in 1908
from a small building in Baroda to its new hi-rise and hi-tech Baroda Corporate Centre in
Mumbai is a saga of vision, enterprise, financial prudence and corporate governance.
It is a story scripted in corporate wisdom and social pride. It is a story crafted in private capital,
princely patronage and state ownership. It is a story of ordinary bankers and their extraordinary
contribution in the ascent of Bank of Baroda to the formidable heights of corporate glory. It is a
story that needs to be shared with all those millions of people - customers, stakeholders,
employees & the public at large - who in ample measure, have contributed to the making of an
institution.
Bank of Baroda is a pioneer in various customer centric initiatives in the Indian banking sector.
Bank is amongst first in the industry to complete an all-inclusive rebranding exercise wherein
various novel customer centric initiatives were undertaken along with the change of logo. The
initiatives include setting up of specialized NRI Branches, Gen-Next Branches and Retail Loan
Factories/ SME Loan Factories with an assembly line approach of processing loans for speedy
disbursal of loans.

Mission statement:
To be a top ranking National Bank of International Standards committed to augmenting stake
holders' value through concern, care and competence.

Our Motto : RACE AHEAD OF COMPETITION

Business growth through higher productivity, Efficiency and profitability.

Sustainable Business Model:

Bank of Baroda has been talking about Sustainable Business Model, which rests upon Four
pillars viz.
A strong and growing CASA base
Well diversified and quality credit expansion
Continuous improvement in asset quality through arresting slippages and recovery/ Up
gradation of bad loans
Growing pool of fee based business & income
5

Strategies for Business Development of the Branch

Global Presence of Bank of Baroda

Strategies for Business Development of the Branch

Corporate Offices
Head Office
Suraj Plaza 1, Sayaji Ganj,
Baroda 390005

Corporate Centre
Bank Of Baroda
Baroda Corporate Centre,
Plot No. C-26, Block G,
Bandra Kurla Complex,
Bandra (East),
Mumbai 400051

Ph: (0265) 2361852(10lines)

Fax: (0265) 2362395, 2361824, 2361806

Indian Branches
Area

No. of Branches

Metro
991
Urban
902
Semi Urban
1388
Rural
1916
Total
5197
Overseas Branches / Subsidiaries
Branches of Bank of Baroda

Branches of Bank of Baroda's Subsidiaries

Country

No. of Branches

Country

No. of Branches

United Arab Emirates

17

Uganda

15

United Kingdom

10

Kenya

11

Mauritius

Trinidad & Tobago

Fiji Islands

Tanzania

Sultanate of Oman

Botswana

Hongkong

Guyana

South Africa

Ghana

USA

New Zealand

Strategies for Business Development of the Branch

Bahamas (OBU)

Singapore (OBU)

Belgium

Bahrain

Seychelles

China

Australia

Total

60

Total

43

Representative Offices
Thailand

Total Number of Branches / Offices / Representative Office

Total No. of countries covered

102

24
Summary
No. of Branches

% of Business Covered

Indian Branches

5197

100%

Overseas - Bank's Branches

60

100%

Overseas - Branches of Bank's Subsidiaries

43

100%

Representative Office

100%

Total

5301

BARODA MANIPAL SCHOOL OF BANKING: An HR Initiative

8

Strategies for Business Development of the Branch

Baroda - Manipal School of Banking has been set up jointly by Bank of

Baroda and Manipal group. The school has been set up to first train
prospective candidates in Banking and Finance before their embarking on a
Banking career with Bank of Baroda.

PROJECT SPARSH:
In order to take the bank to the next level of performance in terms of higher productivity,
Efficiency and profitability, the most critical enabler is bank`s human resources. The bank has
taken note of the need to harness its human resources in a scientific manner encompassing all
facets of HRD. A new project Project Sparsh is therefore launched with the assistance of BCG,

Strategies for Business Development of the Branch

1.2 Objectives of project:
1. To find the business/ demand trends in branch area
-

Understanding the demographical background of the area and monitoring current

trends and competition.

2. To explore the factors used in business development strategy planning process.

-

Various factors including strength, weakness, opportunity & threat (SWOT).

3. To explore business development strategy of the branch.

-

Formulating strategic objectives by analysis of :

o What do we do?
o For whom do we do it?
o How do we excel?

10

Strategies for Business Development of the Branch

1.3 Research Methodology:

Data and information collected from various departments, staff, customers, Annual report
of bank, and website of bank are explored and analyzed.
Information so collected put into pattern and observation so gathered analyzed by using
SWOT analysis.
Other Banks branches situated in the same area have been taken as samples and
methodology adopted by them analyzed.
Finally a report prepared.

11

Strategies for Business Development of the Branch

Chapter 2
Analysis

12

Strategies for Business Development of the Branch

Chapter 2
Analysis
2.1 Branch analysis

Branch profile
Name of Branch

THILLAINAGAR
BRANCH

Alpha code
Sol ID

2748

Region

MADURAI

Zone

TAMILNADU&KERALA

Date of opening of the branch

Area classification

Urban

Category of branch

Scale IV

Risk rating advice by security department

MEDIUM

Composite Branch Rating (CBR)

A (well run branch)

CBS since

11/11/2006

Services / Facilities available

Deposit products
Credit products
Remittance
13

Strategies for Business Development of the Branch

Safe Deposit Locker
ATM

Authorized to handle

Govt. business
Third party products

Services unavailable

Forex business

2.2 Market analysis

Demographical profile:

As per latest 2011 India census,

Trichy has a population of 27,22,290 making it one of the largest cities in Tamil Nadu.
Males constitute 51.28% of the population and female 48.72%.
Trichy has an average literacy rate of 83.23% (census 2011),

Male literacy is 89.72% and female literacy is 76.87%.

14

Strategies for Business Development of the Branch

Owing to the rising employment opportunities and opening of numerous regional and
state level offices, banks, and FMCG companies, and Real Estate Business the city
witnessed a rapid influx of employment seeking migrants.

2.3 SWOT Analysis of the Branch:

It is an analysis which depicts the true position of the firm in terms of Competition and prepares
the firm for future endeavors.
It starts by Stating the
Strengths(S) on which the Company can bank upon and moves forward followed by
Weakness (W), which they need to cover under the belt of Strengths, then
Opportunities (O) which the companies can grab from the mouth of the competitor
and
Threats (T) which act as a Warning Signals from their rivals.

15

Strategies for Business Development of the Branch

Findings under each of the head of the Analysis are: Strengths

Advantages Bank/Branch have:

Urban area branch
Located at Thillai Nagar, Trichy.
Surrounded with MSMEs and many Hospitals.

Importance of the Customer for Bank/Branch:

High
Customer is everything for a Bank

Weakness
16

Strategies for Business Development of the Branch

Factors responsible for the loss of sales/revenue:

Higher priced products
Non-Performing Assets (NPA)

The technical snags for Bank/Branch which creates dissatisfaction in customers:

Link failure
Unavailability of Non-personalised ATM cards
Passbook printers not in working condition

Opportunities

Good opportunities in Bank/Branch way:

Huge existing customer base

Business area is well developed and still growing
Improved demographical condition of area provides a great chance to
enrich its various product basket.

Threats

Presence of the Competitors:

Big players like State Bank of India, ICICI Bank, HDFC bank, and Indian
Bank are situated near branch area.

With the emergence of larger number of players in the Banking Industry,

the switching cost of the buyer has gone done significantly. The onus is
now on the effectiveness and speed with which the services are provided
to the customers.

17

Strategies for Business Development of the Branch

Chapter 3
Findings / Business development
strategy

Chapter 3
Findings / Business development strategy
3.1 Setting strategic objectives
On the basis of SWOT analysis done of the branch we first have to set the strategic objectives in
the below form:

18

Strategies for Business Development of the Branch

Factors to be Objective of strategy
consider
Product

Features of service offering like various types of deposit and loans as per
customers requirements.

Price

Interest Charges, Discount, Fees and Commission must be competitive.

Place

Branches, ATMs, Mobile And Internet Banking for affordability, quality &
convenience, smooth & error free CBS (Core Banking Solutions).

Promotion

To create awareness and improve attractiveness of product & services

offered by Bank in customers mind.

People

Establish a nice & customer friendly approach by Bank branch employees.

As their behavior is a significant factor in the service quality of Banks
which is considered a prime factor in the Bank selection criteria by
customer also.

Process

The process of a transaction contains Time, accuracy and convenience.

Customer must feel delighted after getting a transaction processed.

Physical
environment

This is a highly rational part of Banking services. These are to attract

potential customers towards Bank and to retain existing.

3.2 Formulation of strategy for Business Development:

3.2.1 ProductObjective of strategy:

Features of service offering like various types of deposit and loans as per customers
requirements.

19

Strategies for Business Development of the Branch

Strategy to achieve objective: Use of data mining techniques:
A customer may have purchased a single product or multiple products from a bank. Using a
little sophistication of data mining techniques, we would be able to build a targeting model or a
response model on customer base. A response model is a predictive model which estimates the
future behavior of a given customer even before it occurs. Even with a fair amount of accuracy it
can be very useful for Branch in saving majority of costs in various departments/channels.
Giving an example: A customer has savings account in a bank, based on the information given
to the bank along with account status and history, we could target him/her as a prospect for a loan
product based on a logic / algorithm.
The logic / algorithm could be as simple as if a customer from urban area with account balance
of Rs 1,00,000 or more for over 6 months should be a prospect for home loans Rs 20,00,00.

3.2.2 Price
Objective of strategy:
Interest Charges, Discount, Fees and Commission must be competitive.
Strategy to achieve objective:-

20

Strategies for Business Development of the Branch

These factors are decided on macro level, which are not in the hand of branches to
change. Hence no strategy can be formulated to be price competitive.

3.2.3 Place
Objective of strategy:
Branches, ATMs, Mobile and Internet Banking for affordability, quality & convenience, smooth
& error free CBS (Core Banking Solutions).
Strategy to achieve objective: Implementation of project Navnirman (Baroda Next branches):
Major changes & benefits under this project are:

Sales and service focus: Baroda Next branch

More efficient service
More convenient options for transactions
- ATM, Internet kiosk in branch premise etc.
Better facilities at branches
- Queue management and Cheque Deposit Machines.
Improvement in branch productivity on sales
Best-in-class service levels for customer delight
Redesign & simplification of front and back office processes and roles to
reduce turnaround time and avoid duplication
Reduction in operating costs.

All these steps will provide opportunity for better utilisation of resources in sales and service, for
higher revenue generation and greater customer delight.

3.2.4 Promotion
Objective of strategy:

21

Strategies for Business Development of the Branch

To create awareness and improve attractiveness of product & services offered by Bank in
customers mind.
Strategy to achieve objective: Mass media is considered best for Banking Hoardings of latest schemes of deposit & credit products should be placed on
public places like railway station, shopping area.
Advertisement in local daily newspaper on regular basis.
Organizing public event like customer meet in branch.
Personal selling By branch staff as an advice to customers.
Direct marketing By targeting employees of organizations like:
Government organizations
3.2.5 People
Objective of strategy:
Establish a nice & customer friendly approach by Bank branch employees. As their behavior is a
significant factor in the service quality of Banks which is considered a prime factor in the Bank
selection criteria by customer also.
Strategy to achieve objective: Awareness of products & services offered by branch through branch meetings, new
product training programs.
Knowledge of correct rules & practices followed in customer dealing to offer error free
services.

3.2.6 Process
Objective of strategy:
22

Strategies for Business Development of the Branch

The process of a transaction contains Time, accuracy and convenience. Customer must feel
delighted after getting a transaction processed.
Strategy to achieve objective: Reduce turnaround time for every process by allocating work to staff as per the skills and
situation.

3.2.7 Physical environment

Objective of strategy:
This is a highly rational part of banking services. These are to attract potential customers towards
Bank and to retain existing.
Strategy to achieve objective: Using Baroda next model for branch transformation into a well maintained workplace to
facilitate:
Smooth work flow
Greater customer satisfaction
Efficient way of customer handling
Create a new nice image of bank in customers mind.

23

Strategies for Business Development of the Branch

Chapter 4
Conclusion

24

Strategies for Business Development of the Branch

Chapter 4

Conclusion

Banking in current scenario is very competitive due to presence of several others banks in the
same area. This situation forces each bank branch to think, analyze and formulate its own
strategy to increase its business as well as retain its existing customers. It is found that there is
huge opportunity of business growth, which is supported by branch location, good market
presence, growing population and increasing income level of people residing in area. But with
opportunities also there are challenges in form of presence of many big banks including public &
private banks. To beat these challenges and tap the opportunities branch has to seriously follow
the strategies for business development.
The strategies suggested in this project report are based on the SWOT analysis of the branch. The
strategies show the importance of seven factors including: Product, Price, Place, Promotion,
People, Process and Physical environment of branch. These factors are highly rational part of
banking services. These are to attract potential customers towards Bank and to retain existing.
Also they help in efficient utilization of the same resources for selling more products by using
techniques like cross selling, personal selling etc.
These all has been possible due to dedicated workforce of Bank of Baroda who have mainly
concentrate toward SUSTAINABLE BUSINESS MODEL of Bank.
So the Branch strategy should mainly concentrated over the SUSTAINABLE BUSINESS
MODEL of Bank and business should be on retail segment. Retail growth gives a sustainable
growth in contrast to bulk business which is quite susceptible to high risk. Hence the branch
should mainly concentrate on retail growth as Assets & Liability products.

The bank is situated in residential cum business area. It provides a very good scope for retail
business. The focus should be to more strategy which is adoptable to the competitive changing
environment of high level of competition

Use of these strategies will ensure better customer satisfaction and higher revenue for the branch.
This will lead the way for bank To be a top ranking National Bank of International Standards
committed to augmenting stake holders' value through concern, care and competence.

25

Strategies for Business Development of the Branch

Bibliography:

Reports and other materials available in branch for branch profile analysis.
Websites:

www.bankofbaroda.co.in
www.wikipedia.com

26