ALIN GANGULY CHANDAN SAHA SHANKARSHAN SUDARSHAN SHOVIT 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 Bank
y Yes 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 y 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 Bank
y In December 2006 the bank rated as third best private

bank in India by business world and won many other awards. y Ranked second best private bank in financial express ± Ernst & young survey of India¶s best for the year 2006.

Yes Bank
y The yes bank was promoted by Rana kapoor and Ashok Kapur with assistance from RoboBank y Kapoor and kapur together own 52.5 % of the initial promoters equity of 20 m y While the Indian promoters had 39 % stake in the bank , RoboBank had 20 % stake and FII held 20 % y 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 ³The BW Banking Special 2006

± A Survey of India's Best Listed Public and Private Banks´.

Stack holders

Promoters Rabobank HSBC Financial Services Khazanah Nasional American Funds Insurance Series Growth Fund SmallCap World Fund 3.64% R. F . Chandler ( formerly Orient Global) Deutsche securities CommonWealth Equity Fund Stichting Pensioenfunds ABP FOREIGN INVESTOR

Yes bank segmentation
Yes bank y Corporate & institutional banking
y Companies with turnover of over Rs. 7.5 bn

y Business banking
y Companies with turnover between Rs .5bn and Rs 7.5 bn

y Retail banking y Individual with annual turnover income between Rs.5bn and Rs 5mn

Strategic Capability
y ³The adequacy and stability of the resources and competences of an organization for it to survive and prosper.´ y TANGIBLE AND INTAGIBLE. y 1) PHYSICAL : Building or the production capacity. y 2) FINANCIAL : Capital , cash, debtors and products. y 3) HUMAN : Number of employees and skills. y 4) Intellectual Capital : Patents , brands , business systems and customer database

Corporate and Commercial Banking
Customer 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 Banking
Customer 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.

Performance
y The bank growth as per the sensex y Competition.. y Growth speaks through figures.

Differentiation strategy
y The bank differentiated itself from other players in the

industry through its unique ³knowledge banking approach´ , emphasizing on technology and human resource. y 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 parameters y Knowledge banking approach y Emphasis on technology y Human resource

Knowledge Banking
y Yes bank decided to follow an innovative approach to

break into the heavily cluttered Indian commercial banking system. y Knowledge banking--- a unique method of acquiring customer and retaining them. y The bank provides specialized service to the emerging sectors of the economy through better understanding of its clients business and industry.

Knowledge banking contd..
y The bank focused on providing the customer with specialized banking service depending upon their requirement. y The bank identified some sectors of economy which had growth prospect:1. Food and agribusiness 2. Infrastructure business 3. Life science and biotechnology 4. Telecommunication 5. IT 6. Media and entertainment 7. Real estate

Technology
y Yes bank was founded with the aim of providing the world

class customer service to the customer using latest technology in the industry. y The bank consider technology as a strategic tool to differentiate itself from other banks. y Corporate internet banking y ATMs y Mobile banking y Phone banking

Technology
y The bank entered into the strategic partnership with

Gartner inc. to formulate and implement the bank IT policy. y Price Water House Coopers to facilitate the confirmation of policies and process with ISO and six sigma norms. y I-flex solution ltd. it used FLEXCURE, a universal banking solution software, as its core banking system for retail as well as corporate banking. y 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. 

igher pay for Retention of talented employees. 

Performance management process synergy at work .

KEY INITIATIVES BY BANK TO RECRUIT AND TRAIN MANPOWER
1.Yes entrepreneur in action : y Take break from regular work to focus on project of his/her interest to achieve individual goal. 2. Yes-Professional Entrepreneurship Program (YPEP) : y Talent management initiative . y Talented middle & upper management for strategic initiative . 3. Yes-retail Entrepreneurship programme (YREP): y 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.

PROMOTIONS
y Less advertising focus . y Sophisticated & delighted customer service.

Statics
y Statistics shows that the bank was primarily in metros and

y y y y y

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.

India
y Significant strengths in

agriculture, horticulture, dair y, poultry, etc y Agro-climatic diversity y Production leadership in many areas y Rapid urbanization y Govt. according priority status y Growth in Organized food retail

India¶s share in global production

Fruits

15

Vegetables

11

0

%

10

20

India¶s prices as % of world prices
F ru its
63

Ve g e ta b le s 40 50

53

60 %

70

The Growth Story
y Grown at a tremendous pace.

Contd«
y 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. y Started its operations with just 250 employees and two branches. y October 2007, it was operating with 60 branches and 3,263 employees.

A Successful Market Entry
y The that helped the bank to succeed are:
y y y

high-end technology. 'knowledge banking' approach. highly qualified human resources.

y Knowledge banking initiative drew a lot of interest y The bank catered to a niche segment which helped it to avoid price competition.

Conclusion
y The 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.

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