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ASSIGNMENT

BUSINESS POLICY
STRATEGIC ANALYSIS

“RELIGARE SECURITIES
LIMITED”
VISION

To build Religare as a globally trusted brand in the financial services domain and present
it as the ‘Investment Gateway of India’

MISSION

Providing financial care driven by the core values of diligence and transparency.

BRAND ESSENCE

Ethical and dynamic processes for wealth creation drive Religare.

BRAND IDENTITY

Name
Religare is a Latin word that translates as 'to bind together'. This name has been chosen to
reflect the integrated nature of the financial services the company offers.

Symbol
The Religare name is paired with the symbol of a four-leaf clover. Traditionally, it is
considered good fortune to find a four-leaf clover, as there is only one four-leaf clover for
every 10,000 three-leaf clovers found. Each leaf of the clover has a special meaning. It is
a symbol of Hope, Trust, Care and Good Fortune.
CORPORATE OBJECTIVES:

1. To hold investments in various step-down subsidiaries for investing, acquiring,


holding, purchasing or procuring equity shares, debentures, bonds, mortgages,
obligations, securities of any kind issued or guaranteed by the Company.

2. To provide financial consultancy services; to provide investment advisory services on


the internet or otherwise; provide financial consultancy in the area of personal and
corporate finance; publish books and CD ROMs.

3. To conduct the business of sale, purchases, distribution and transfer of shares, debts,
instruments and hybrid financial instruments and to perform all related, incidental,
ancillary and allied services.

4. To conduct depository participant services; to conduct de-materialization and re-


materialization of shares; set up depository participant centers at various regions in
India and to perform all related, incidental, ancillary and allied services.

5. To receive funds, deposits and investments from the public, Government agencies,
financial institutions and Corporate bodies; grant advances and loans; conduct
advisory services related to banking activities, project financing, funding of mergers
and acquisition activities; fund management and activities related to money market
operations.

6. To carry on the business of portfolio management services, investment advisory


services; custodial services; asset management services; leasing and hire purchase;
mutual fund services and to act as brokers of real estate and financial instruments.

7. To carry on the business of financing; provide lease and hire purchase services; to
provide consultancy in the area of lease and hire purchase financing.

8. To operate mutual funds; receive funds from investors; equity or debt instrument
research activity instrument in debt and/or equity instruments.
SWOT ANALYSIS

STRENGTHS

1. Diverse Branch Network


Since Company started in 1992 Company and its subsidiaries have grown from a single
location to a nationwide network spread over 900 offices in 320 cities. They have a pan
India distribution networks for the purpose of distribution of financial products and
services. Such a diverse and integrated network provides a centralized platform to there
clients.

2. Bouquet of financial products and services


Company and its subsidiaries offer various financial services and products ranging from
equity, currency trading, F & O and wholesale debt, mutual fund, equity research
analysis, depository services to cater to the specific needs of the retail and institutional
investors thus providing all these services in single platform.

3. Advanced Technology team that delivers market leading product innovation


There ongoing investment in technology is a key element in expanding there product and
service offerings, enhancing there delivery systems, providing fast and consistent client
service, reducing processing costs, and facilitating there ability to handle significant
increases in client activity without a corresponding rise in risk and staff.

4. Strong Sales and Marketing Teams with continuous reinvestment


Company’s relationship manager channel offers a single point contact to retail customers
whereby their high net worth clients have separate relationship managers catering to
them. These managers offer personalized services to the customers helping build strong
and continuing relationships with them. Also, the marketing associate channel helps
Company and its subsidiaries in client acquisitions at minimal costs with client loyalty.
The marketing associate’s channel also helps Company and its subsidiaries in increasing
their penetration in smaller town and cities.
WEAKNESSES
1. Insignificant presence in institutional segment.
2. Awareness about its e-broking portal ODIN is yet to be created among masses.
3. Customer Satisfaction.
4. Branding - Yet to obtain approval of Trademark for developing into brand
though the company has a efficient products but large part of investment
interested population does not know the company. The most basic expectation for
a trader or investor when one begins trading is that one must get timely delivery
of shares and proceeds from sale of shares. Also ones cash balances with the
broker must be safe and secure. Though this confidence in the broker comes with
time and experience, good and transparent practices also play a major role in
imbibing confidence in traders.

5. Competition from banks - Most of the banks due to good branding have the faith of
the customers of their banking database. So they enjoy the liberty of huge database
and customers find it more reliable to trade there rather than with a unknown broker.
Also banks like HDFC Bank and ICICI Bank have the advantage of linking the
trading accounts of their customers to saving accounts. This makes trading easier,
and at the same time a trader withdraws exactly as much money from his account as
is needed to complete the trade. Similarly sales proceeds are credited directly to
saving account.

6. Low Investment on employees training.

OPPORTUNITIES

1. Additional centers will increase the clientele base and in-turn will increase
revenue
2. Retail sector is expected to grow due to reduction in interest rate and opting for
new opportunities in equity and related instruments
3. Rapid penetration of Internet and computers will be instrumental in increasing
e-broking business
4. Ever-increasing market
5. Improving Technology
6. Unfulfilled needs of the customers - With so many competitors offering their
products in the market but no one is able to completely satisfy the customers.
Some have the problem of lack of information or some were scared of volatility of
the stock markets.

THREATS

1. Downturn or volatility of securities and commodities market.


2. Slowdown of Indian and global economy.
3. Change in government and economic policies including personal taxation may
affect our volume and fund mobilization.
4. New Competitors.
5. Technology based business.
INTERNAL FACTOR EVALUATION MATRIX (IFE)
Internal Factor Evaluation (IFE) matrix is a strategic management tool for auditing or
evaluating major strengths and weaknesses in functional areas of a business. The Internal
Factor Evaluation matrix is used in strategy formulation. Internal factors are extracted
after deep internal analysis of the company. Every company has some weak point and
strong point that’s the reasons internal factors are divided into two categories namely
strengths and weakness.

Strengths are the strong areas or attribute of the company, which are used to overcome
weakness and capitalize to take advantage of the external opportunities available in the
industry. Weakness are painful for the company means these are the weak factors which
needs to be improve in future otherwise if they exposed to the competitors they can take
the advantage of it.

WEIGHTS RATING WEIGHTED


KEY INTERNAL FACTORS 0.0 to 1.0 1 to 4 SCORE
INTERNAL STRENGTHS

Diverse Branch Network 0.15 4 0.6


Bouquet of Financial Products & Services 0.1 4 0.4
Advanced Technology 0.1 3 0.3
Collaborations with highly reputed
international companies AEGON and
MACQUERIE 0.08 3 0.24
Provides transparency to clients 0.1 4 0.4
Highly qualified research team 0.12 4 0.48

INTERNAL WEAKNESSES
Low investment on Advertisement 0.1 2 0.2
Customers not satisfied 0.1 1 0.1
Low Investment on employees training 0.15 1 0.15

TOTAL 1 2.87

EXTERNAL FACTOR EVALUATION MATRIX


(EFE)

External Factor Evaluation (EFE) matrix method is a strategic-management tool often


used for assessment of current business conditions. The EFE matrix is a good tool to
visualize and prioritize the opportunities and threats that a business is facing.

Opportunities are the chances exist in the external environment, it depends firm whether
the firm is willing to exploit the opportunities or may be they ignore the opportunities due
to lack of resources. Threats are always evil for the firm, minimum no of threats in the
external environment open many doors for the firm. Maximum number of threats for the
firm reduce with their power in the industry.

WEIGHTS RATING WEIGHTED


KEY EXTERNAL FACTORS 0.0 to 1.0 1 to 4 SCORE

EXTERNAL OPPORTUNITIES

New Technology 0.06 3 0.18


Increasing Markets 0.1 4 0.4
Un fulfilled Customer Needs 0.1 4 0.4
Can Open Its Own Bank 0.12 4 0.48
People Becoming Aware of Financial
Products 0.1 3 0.3
Increasing Web Trade 0.1 4 0.4

EXTERNAL THREATS

New Entrants 0.1 2 0.2


Change in Govt. Policies 0.1 1 0.1
Slowdown in Indian or Global Economy 0.12 2 0.24
Volatility in Stock & Commodities Market 0.1 1 0.1

TOTAL 1 2.8

COMPETITIVE PROFILE MATRIX (CPM)


Competitive profile matrix is an essential strategic management tool to compare the firm
with the major players of the industry. Competitive profile matrix shows the clear picture
to the firm about their strong points and weak points relative to their competitors.

Critical success factors are extracted after deep analysis of external and internal
environment of the firm. Obviously there are some good and some bad for the company
in the external environment and internal environment. The higher rating show that firm
strategy is doing well to support this critical success factors and lower rating means firm
strategy is lacking to support the factor.

RELIGARE ICICI SHAREKHAN

CRITICAL SUCCESS WEIGHTS RATING WEIGHTED RATING WEIGHTED RATING WEIGHTE


FACTORS 0.0 to 1.0 1 to 4 SCORE 1 to 4 SCORE 1 to 4 D SCORE

Domestic Market Positioning 0.1 4 0.4 4 0.4 3 0.3


International Market
Positioning 0.08 3 0.24 3 0.24 3 0.24

Cost of Service 0.15 4 0.6 3 0.45 3 0.45

Brand Recognition 0.1 4 0.4 4 0.4 3 0.3

Consumer Loyalty 0.12 3 0.36 3 0.36 2 0.24

Quality of Service 0.1 3 0.3 3 0.3 3 0.3

R&D 0.1 4 0.4 3 0.3 3 0.3

Technology used 0.05 3 0.15 3 0.15 3 0.15

Product Diversity 0.06 4 0.24 3 0.18 2 0.12


Financial Stability 0.14 4 0.56 4 0.56 3 0.42

TOTAL 1 3.65 3.34 2.82

SPACE MATRIX
(STRATEGIC POSITION & ACTION EVALUATION)

The SPACE matrix is a management tool used to analyze a company. It is used to


determine what type of a strategy a company should undertake. The Strategic
Position & Action Evaluation matrix or short a SPACE matrix is a strategic
management tool that focuses on strategy formulation especially as related to the
competitive position of an organization.

INTERNAL STRATEGIC POSITION EXTERNAL STRATEGIC POSITION


Competitive Advantage (CA) Industry Strength (IS)

(-6 worst, -1 best) (+1 worst, +6 best)


-
1 Financial Product Services Quality 6 Barriers to Entry
-
1 Low Charges 4 Growth Potential
-
3 Brand Image 4 Access to Financing
-
2 Research & Development 5 Consolidation

Average -1.75 Average +4.75


TOTAL X - axis Score : 3.00

Financial Strength (FS) Environmental Stability (ES)


( +1 worst, +6 best) ( -6 worst, -1 best)
5 ROA -2 Inflation
4 Leverage -1 Technology
6 Liquidity -2 Demand Elasticity
5 Cash Flow -4 Taxation
Average +5.00 Average -2.25

TOTAL Y - axis Score : 2.75


QUANTITATIVE STRATEGIC PLANNING MATRIX
(QSPM MATRIX)
Quantitative Strategic Planning Matrix (QSPM) is a high-level strategic management
approach for evaluating possible strategies. Quantitative Strategic Planning Matrix or a
QSPM provides an analytical method for comparing feasible alternative actions. The
QSPM method falls within so-called stage 3 of the strategy formulation analytical
framework.

DIVERSIFY INTO OTHER FOCUS ON PRESENT


DOMAINS DOMAINS
WEIGHTS RATINGS WEIGTHED RATINGS
KEY FACTORS 0.0 to 1.0 1 to 4 SCORE 1 to 4 WEIGTHED SCORE

Opportunities
Market growth is picking up 0.1 4 0.4 4 0.4
Government contracts 0.1 2 0.2 4 0.4
Threats
Increasing competitors 0.12 4 0.48 1 0.12
Increasing cost of human
capital 0.08 2 0.16 2 0.16
0.7 0.36

Strengths
Innovation 0.11 4 0.44 4 0.44
Large Employee Base 0.07 3 0.21 2 0.14
Good service quality 0.1 3 0.3 3 0.3
Financial stability 0.1 4 0.4 3 0.3
Strategic alliances 0.09 4 0.36 4 0.36
Weakness
Not yet internationalized 0.09 2 0.18 1 0.09
Smaller branch network 0.09 1 0.09 2 0.18
1.15 1.17
PORTER’S FIVE FORCES MODEL FOR
COMPETITORS ANALYSIS

Our goal here is to address the most important dimensions of each of the five forces, for
they will be incorporated in the knowledge base (e.g. in the form of business rules) of the
proposed expert system. A number of important economic and technical characteristics
are critical to the strength of each competitive force.

1. Entry barrier

Past low entry-barrier: Since the early ‘80s Indian policy makers and politicians have
placed tremendous faith in the public equity market. Partly as a result of lack of state
resources, partly because of pressure from various segments to ‘develop’ the Indian
capital markets, businessmen have been encouraged to tap the public savings directly by
issuing equity. The encouragement primarily came in the form of low entry barrier. As
long as you could hire a good merchant banker and as long as the equity market was
buoyant, even small companies could get listed. The result has been a huge surge of listed
companies.
Current Entry-barrier: In 1995-96 the entry barrier was effectively raised to Rs 10 crore
of post issue-listing. At one stroke this eliminated a lot of companies from accessing the
public market. How many have a Rs 10 crore capital - among those who have not already
gone public during the free-for-all till 1995? Not many. As the security industry is highly
depends on capital market, so entry barrier of the industry is also decreasing.
Threat of Entry:

Factors that determine the threat of entry include capital requirements, economies of
scale, switching costs, and brand value and uncertainty about future.Brand identity is
important in the share broking sector, and benefits larger firms. Major broking firms
allocate considerable resources to marketing efforts. Frequent introductions of new
schemes and services and other incentives have been successful in enticing investors or
clients to trade with certain firms. These factors can often be strong enough to cause a
customer to choose one firm over another—even when the other firm offers a lower
brokerage charge.

2. Threat from Substitutes


The third factor affecting industry competition is the availability of substitutes. The
relative price of substitutes and the buyer propensity to substitute have effects on the
industry. Likely substitutes for investment in stock market are bank deposit, post office
deposits and investment through personal lending. Although there is a high return in the
capital market but there is high risk also. So if people are not interested in capital market
then the share broking firm are of no use.The threat of substitutes has to do with time,
money, personal preference, and convenience in the share broking industry.
3. Competitive Rivalry
The final factor is competitive rivalry. Intensely competitive industries generally earn low
returns because the cost of competition is high or buyers are receiving the benefits of
lower prices. Factors that affect competitive rivalry include industry growth, fixed costs,
brand identity, and barriers to exit. The security industry is growing day by day. So the
rivalry levels of different competitors in the industry are rapidly growing.

4. Bargaining power of supplier


The member may insist the client to deposit interest-free margin money as a percentage
of the price of securities proposed to be purchased, unless the client already has an
equivalent credit with the member.
The member may insist the client to deposit interest-free margin money as a percentage
on the price of securities proposed to be sold, unless the member has received from the
client the securities in its pool account prior to such sale or has received the securities
with valid transfer documents to the member’s satisfaction prior to such sale. The
member is authorized to raise contract notes; debit notes etc. on the client and recover
any amount due from the client in connection with the regular business. The contract
notes issued by the member in the electronic form with digital signature is fully valid
under the SEBI /Exchange rules and is binding on the client and is valid mode of delivery
of the same. The member shall send the contract note in physical form or digital form to
the client within 24 hours of the execution of the Client’s transaction or at such interval
as may be required by the Exchange from time to time, via mail, email, fax, courier,
Registered A.D, oral communication or otherwise at the postal address, telephone/fax
numbers or e-mail addresses intimated by the client to the member. The client
understands that it is his/her/its responsibility to review the trade confirmation upon its
first receipt. Any objection should be informed in writing within twenty-four hours of
such confirmation. In all cases, the member reserves the right to determine the validity of
the Client’s objection to the transaction. The client agrees that the member will not be
responsible for the non-receipt of the trade confirmation due to any change in the
correspondence address/ telephone number or email address of the client, the client not
having intimated to the member. The member shall also send the Order/Trade
confirmation slip through e-mail to the client at his/her request, within (time period as
specified by the client) from the time of execution of order/ trade on the NEAT/CTCL
system, as the case may be. The client agrees that the information sent by member by E-
mail is deemed to be a valid delivery of such information by the member.

5. Bargaining power of buyer


The CLIENT authorizes the MEMBER to set off a part or whole of the Margin i.e. by
way of appropriation of the relevant amount of cash or by sale or transfer or pledge of all
or some of the securities which form part of the margin, against any dues of the CLIENT
or of a MEMBER of the “Family” (hereinafter mean all the individuals, group
companies, firms, entities and other persons as specified by the CLIENT) in the event of
the failure of the CLIENT or a MEMBER of the Family of the CLIENT to meet any of
their respective obligations under these terms.
PORTER’S FIVE FORCES OF COMPETITIVE POSITION

Threat from new Market


Entrants

• entry ease/barriers
• geographical factors
• incumbents resistance
• new entrant strategy
• rou

Bargaining power of buyers


Bargaining power of
Supplier Competitive Rivalry • buyer choice
• brand reputation • buyers size/number
• geographical coverage • change cost/frequency
• product/service level • number and size of firms • product/service
quality • industry size and trends importance
• relationships with • fixed v variable cost bases • volumes, JIT scheduling
customers • product/service ranges
• bidding • differentiation, strategy
processes/capabilities

Threats from substitutes

• alternatives price/quality
• market distribution changes
• fashion and trends
• legislative effects

CORPORATE STRATEGIES
KEY BUSINESS STRATEGIES
Their focus on the client has allowed Company and its subsidiaries to offer a range of
services that have changed the investing landscape and created a new model of financial
services that melds people and technology to provide an integrated human assisted
technology interface service for investors who range from self-directed full-time active
investor to those who prefer to deal with through a marketing associate in smaller towns
and cities.

1. Defend and maintain their differentiation as the firm that delivers ethical and useful
services.
2. Uncomplicated and not driven by commission.
3. Give clients’ new levels of choice tailored to their desire for help, tools for investing
their assets, their willingness

4. To pay for additional services and the level of business they can do with the company.

Provide clients with tools, relationship managers and choices that support their desired
investment outcomes. Religare has developed a client specific approach as a core element
of its business strategy and are constantly focusing on acquiring new clients and
expanding their customer base. They believe that the strong secular growth of the Indian
financial Markets, due to increased household penetration of financial assets; increasing
liquidity and market capitalization of Indian Markets, led by the listing of many public
sector entities; and the increasing affluence of Indian households and savers provides an
impetus to the growth perspective.

They believe that this diversification and growth strategy will continue to produce results
and allow Company and its subsidiaries to grow business at a rapid pace irrespective of
market conditions. In addition, management believes that the growth of the Indian
financial markets, due to increased household penetration of financial assets; increasing
liquidity and market capitalization of Indian markets, led by the listing of many
Public/Private sector entities; and the increasing affluence of Indian households and
savers, favors our long term growth outlook.

TOWS MATRIX
SO - Strategies WO - Strategies

• To build Strong network throughout • To linking Religare demat account with


India, strong presence in WEST, the five banks HDFC, CITIBANK,
NORTH and SOUTH. AXIS, ICICI, INDUS Bank.
• To invest in training and development • To create awareness about the brand
of employees. and its services.

ST - Strategies WT - Strategies

• Even the strong players in the market • To come up with flexible plans for
holds 6% of market share, so there is a investment.
good potential for growth. • To invest and develop technology.
• Improving on customer satisfaction.