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Report By: -
Piyush Patil
Pooja Chhajed
Pooja Rathod
Pooja Thube
Pooja Bhimjayani
Poonam Raut
Poonam Pillay
Poorva Pendharkar

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 ACKNOWLEDGEMENT

We express our deepest gratitude to our Strategic Management Prof. Amal Roy, for his constant
support and for giving necessary advices and guidance to complete this report and providing
us with this great opportunity to learn and enhance in life. We choose this moment to
acknowledge his contribution gratefully.

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CONTENTS PAGE NO
1. Introduction to Banking Industry 5

2. State Bank of India 8

3. HDFC Bank 18

4. HSBC Bank 31

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Introduction to Banking Industry

• Indian banking industry’s growth has been more qualitative than

quantitative which is expected to remain same for the coming years.

• The projection of Indian vision 2020 prepared by the Planning

Commission says that the growth rate of banking sector is expected to be
16%-20% CAGR.

Nature and Scope of banking industry

Banking activities are considered to be the life blood of the national economy.
Without banking services, trading and business activities cannot be carried on
smoothly. Banks are the distributors and protectors of liquid capital which is of
vital significance to a developing country. Efficient administration of the banking
system helps in the economic growth of the nation. Banking is useful to trade and
commerce.

The SWOT analysis of Banking industry

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Strengths in the SWOT analysis of Banking

 Banking is as old as Human race: Banking industry is the driving force to

any nation. It helps in shaping the life of human race may be some time
merely by Exchange (which was called barter system), or by transaction or
by facilitating advances.
 Source of employment & GDP growth : There is a consensus among
economists that development of the financial system contributes
to economic growth. Financial development creates enabling conditions for
growth through either a supply-leading (financial development spurs
growth) or a demand-following. It is this industry which continuously
works to secure financial stability, facilitate international trade, promote
employment, & reduce poverty around the world.
 Hedge from risk: Whether it is natural calamity or man-made calamity
banks mitigate the after effect of the destruction by providing financial
support to the victims to stand –up & lead a peaceful life again.
 Diversified services: Banking industry offer services from CASA to
insurance, to loan, to investment.
 Connecting People: With the advent of new age technological
advancement Banks have made the life of the common man easier. People
can transact on real time basis in many places.
 Changing from mere savings & loan facilitator role: Top priorities of
banks now days include regulatory compliance, improving asset quality,
enhancing customer centricity, focusing on digital convergence, and
tackling competition from non-banks. Banks are therefore making business
and technology investments to change their business models.

Weaknesses in the SWOT analysis of Banking

1. Lack Of coordination: The global banking industry faces short-term

uncertainty due to the debt crises that challenge several major economies.
Industry assets stand at $143 trillion (2013)&the EU is the largest regional
market, with over 57% of the global market. Volatility in different
market/Currencies has created problems for the banks in order to work
properly across the borders.
2. Vulnerable to risk: Since this sector deals with finances, it is the riskiest
sector which can change the fate of any business/Industry.
3. High NPA’s: Rise in Retail & corporate NPA’s (Non-performing assets) is
the single major issue this sector is going through worldwide.
4. Can’t reach to Under-penetrated market: Due to several conflicting
objectives of government & banks which goes hand in hand, rural areas of
developing nations are still not in the shadow of banks. Although PMJDY

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 (Pradhan Mantri Jan DhanYojna) implemented by the Indian banks got
acknowledged by World Bank for financial inclusion but the Idea is not fully
capitalized even in the home country.
5. Structural weaknesses such as a fragmented industry structure, restrictions
on capital availability and deployment, lack of institutional support
infrastructure, restrictive labour laws, weak corporate governance, Political
pressure and ineffective regulations.

Opportunities in the SWOT analysis of Banking

1. Expansion: Penetrating to the rural markets & bringing the rural masses
under the purview of organized banking will be the objective of the Banks
in decades to come.
2. ChangingSocio-cultural& demographic factors: Given
the demographic shifts resulting from changes in age profile and household
income, consumers will increasingly demand enhanced institutional
capabilities and service levels from banks.
3. Rise in private sector banking: Banking Industry across the world is
highly regulated &lead by PSU’s with their respective central banks. With
the advent of private sector banks this sector is going through structural &
functional changes mainly due to the adaptation of the advanced
technologies & increased competition thereby benefiting to the end
customers.

Threats in the SWOT analysis of Banking

1. Recession: It is one of the major threats to the financial system of the nation.
Traumatic shock of Economic crises & collapse of the several businesses
can affect the banks and vice-versa.
2. Stability of the system: Failure of some weak banks has often threatened
the stability of the system.
3. Competition: Competition from NBFC’s (Non-banking financial
companies) like insurance companies & mutual fund companies can affect
the business of Banks.

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VISION:

Be the bank of choice for a transforming India

MISSION:

Committed to providing simple, responsive and innovative financial solutions.

VALUES:

Service

Sustainability Transparency

Politeness Ethics

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PESTEL analysis of SBI

 Political Factors that Impact SBI

Taxation policies – Over the last two decades SBI has benefitted from lower
taxation policies throughout the western hemisphere. It has resulted in high
profits and increasing spending in the research and development. The increasing
inequality in India can lead to changes in the taxation policies. Secondly local
governments are also looking into Regional Banks specific taxation policies to
contain the carbon footprint of the Financial sector.

Government of India has come under increasing global pressures to adhere to

World Trade Organization’s regulations on Regional Banks industry.

- Changing policies with new government – Studying the current trends it seems
that there can be a transition of government in India in next election. SBI has to
prepare for this eventuality as it will lead to change in governance priorities of
Financial sector.

 Economic Factors that Impact SBI

- Skill level of workforce in India market – The skill level of human resources in
India is moderate to high in the Financial sector. SBI can leverage it to not only
improve services in India but also can leverage the skilled workforce to create
global opportunities.

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- Increasing liberalization of trade policy of India can help SBI to invest further
into the regions which are so far off limits to the firm.

- Exchange rate – The volatile exchange rate of India can impact SBI investment
plans not only in the short term but also in the long run.

- Economic Performance of India – I believe the economic performance of India

in the near future 5-10 years will remain stable given – government expenditure,
stable demand because of disposable income, and increasing investment into new
industries.

 Social Factors that Impact SBI

- Education level – The education level is high in India especially in the SBI
sector. SBI can leverage it to expand its presence in India.

- Power structure – There is an increasing trend of income inequality in India.

This has altered the power structure that has been persistent in the society for over
last 6-7 decades.

Media outlets play a critical role in influencing the public opinion India. Both
traditional media and social media are rapidly growing in India. SBI can leverage
this trend to better market and position its products.

 Technological Factors that Impact SBI

Maturity of technology – The technology in the Regional Banks sector is still not
reached maturity and most players are vying for new innovations that can enable
them to garner higher market share in India.

- Developments and dissemination of mobile technology has transformed

customer expectations in the Financial sector. SBI has to not only meet and
manage these expectations but also have to innovate to stay ahead of the
competition.

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- Intellectual property rights and patents protection – If India have higher
safeguards for IPR and other intellectual property rights then more and more
players are likely to invest into research and development.

- Research and development investment at both macro level and micro level in
India. If there is an environment of creative disruption and both government and
private players are spending resources on developing new solutions.

- Technology transfer and licensing issues for SBI – In the Financial sector there
is no strong culture of technology transfer and companies often are reluctant to
transfer or license technologies for the fear of creating competitors out of
collaborators.

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  Environmental Factors that Impact SBI
- Customer activism – Greater awareness among customers have also put
environmental factors at the center of SBI strategy. Customers expects SBI to
adhere to not only legal standards but also to exceed them to become responsible
stakeholder in the community.

- Environmental norms are also altering the priorities of product innovation. In

many cases products are designed based on environmental standards and
expectations rather than catering to traditional value propositions.

 Legal Factors that Impact SBI

- Employment law in the India and how they are impacting the business model of
the Regional Banks. Can these conditions be replicated or bettered in
international market?

- Environment Laws and guides – The level of environmental laws in the India
and what SBI needs to do to meet those laws and regulations.

- Legal protection of intellectual property, patents, copyrights, and other IPR

rights in India. How SBI will be impacted if there are not enough protection.

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State Bank of India (SBI) Marketing Mix (4Ps) Strategy

Marketing Mix of State Bank of India (SBI) analyses the brand/company which
covers 4Ps (Product, Price, Place, Promotion) and explains the State Bank of
India (SBI) marketing strategy. The pricing, advertising & distribution strategies
used by the company are as follows-

State Bank of India (SBI) Marketing Mix:

Product:

The product strategy and mix in State Bank of India (SBI) marketing strategy can
be explained as follows:
State Bank of India offers services in various sectors such as personal banking,
rural banking, corporate banking, International Banking. Rural & Agricultural
Banking has many services such as Kisan Credit Card, Farm Mechanization loan,
Poultry Loan, Gold Loan, Fisheries Loan, Dairy Loan, Micro credit, Pradhan
Mantri Jan Dhan Yojana, Direct Benefit transport. Personal Banking by SBI
includes deposits such as Savings account, CC account, Salary account, Fixed
deposit, Recurring deposit. SBI Loans are available such as Gold loans, car loans,
education loan, personal loans, home loans, etc. SBI gives corporate services such
as Corporate account groups, mid-corporate account groups, Project finance, etc.
International banking of SBI consists of wholesale banking, retail, banking,
Global trade service, correspondent banking, treasury management. Other
services offered are, Aadhaar seeding, ATM services, mobile banking, Internet
banking, Cash deposit machines, Demat services, Invest Bonds, etc. This covers
the product strategy in the marketing mix of State Bank of India.

Price:

Below is the pricing strategy in State Bank of India (SBI) marketing strategy:
State Bank of India has a pricing strategy based on competition, RBI guidelines
and customer demand. The marketing mix pricing strategy governs the operations
of SBI bank as follows. Services provided by SBI follow the guidelines provided
by Reserve Bank of India. SBI competitively prices its services because Banking
sector has become highly competitive. Government policies heavily affect prices
of the services provided by the bank. Since loan is highly risky pricing also
depends on the total to which the assets and liabilities amount to.

Place:
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Following is the distribution strategy of State Bank of India (SBI):
SBI operates in over 18 thousand branches in India. Majority of its banks are in
rural areas since it is a public sector bank and aims to serve the whole of India.
SBI is present in 36 countries with over 190 branches overseas. SBI also provides
its services through mobile banking and Internet banking. It also has cash deposit
stations and a huge network of ATMs. It also has its presence through associate
banks such as State bank of Hyderabad, State Bank of Patiala, State Bank of
Mysore, State Bank of Travancore, State Bank of Bikaner & Jaipur, Bhartiya
Mahila Bank, etc.

Promotion:

The promotional and advertising strategy in the State Bank of India (SBI)
marketing strategy is as follows:
State Bank of India (SBI) promotes itself through various media such as Print
media and audio-visual media such as Radios, Hoardings, Newspaper
advertisements, TV-commercials, movies, etc. Its tagline, ‘The Banker to every
Indian’ turns out to be perfectly apt given its presence across India. SBI smartly
conveys its policies through its advertisements. Recently, it has been adapting to
the modern approach and devising its advertisements accordingly. Thereby, it has
employed famous personality to reinforce the idea of trust and SBI in customers’
minds. Being affordable and present at almost every town, village and city has
been its indirect promotion due to its increased presence.

Since this is a service marketing brand, here are the other three Ps to make it the
7Ps marketing mix of State Bank of India (SBI).

Process:

All the activities of SBI are governed by the RBI. It has to follow its regulations
and principles. SBI follows standard formats like any other bank because it has
to abide by the rules of RBI. Even though the documentation and forms are
standardised, the bank has customized approach for every customer based on the
customer needs. Customer involvement is ensured through ATMs where the
employees are not present and only customers are involved in the process. For
simplicity, the functions of the bank are carefully segregated based on their inter-
connections.
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People:

Every Indian is one or other way connected to the State Bank of India. The
primary reason being, every bank is directly related to SBI. Hence, customers,
employees, management, workers, everyone contributes to the prosperity and
growth of the bank. Every worker and employee adds to the profitability of SBI
bank.

Physical Evidence:

SBI has its physical evidence through websites. The Business cards, paperwork,
brochures, furnishings are a source of physical evidence. Banks provide tangibles
such as diaries, pens to employees. The passbooks, cheque books also are a
medium of physical evidence. Furnishings, financial reports, signage also reduce
intangibility of the services. This covers the marketing mix for State Bank of
India (SBI).

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SWOT Analysis

1. SBI is the biggest bank in India with more than

14000 branches
2. State Bank of India (SBI) has a separate act for
itself. Thus, a special privilege for the bank
3. Biggest branch network in the country means
good reach
4. First public sector to move to CBS
5. SBI has close to 300,000 people employed with
it
Strengths
6. Backing of the Govt of India gives a huge boost
to the bank
7. State Bank Of India offers services like
consumer banking, enterprise banking, insurance
etc
8. It has a good brand visibility and awareness due
to extensive marketing
9. SBI has its presence in more than 35 countries
with close to 200 offices

1. Immense competition means limited market

share growth for SBI
2. International presence is less as compared to
Weaknesses global banks

1. Pool in talent to replace the going top

management to serve the next generation
2. State Bank Of India (SBI) can make better use
Opportunities of CRM, technology and online space
3. Expansion into rural areas too boost its
business

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 4. With focus on India going cashless, the bank
can dominate the market with its extensive reach

1. Consolidation among private banks can reduce

market share for SBI
2. New bank licenses by RBI can affect operations
Threats
3. Foreign banks that have sophisticated products
4. SBI operations are often disrupted by slow
government decisions.

Competitive Analysis

Name Last Market Net Interest Net Profit Total Assets

Price Cap. Income
(Rs. In Cr.)
SBI 366.15 326,774.65 242,868.65 862.23 3,680,914.25
Bank of Baroda 125.50 48,276.43 49,974.11 433.52 780,987.42
PNB 81.25 37,407.88 51,310.25 -9,975.49 774,949.46
Bank of India 92.50 30,311.54 40,767.81 -5,546.90 625,222.84
IDBI Bank 36.95 28,585.61 22,071.23 -15,116.30 350,313.65
Canara Bank 287.75 21,674.62 46,810.34 347.02 694,766.69
Allahabad Bank 48.95 18,217.81 16,864.29 -8,333.96 248,575.76
Corporation Bk 25.50 15,285.17 15,622.63 -6,332.98 213,577.86
Union Bank 83.75 14,765.26 34,066.66 -2,947.45 494,038.83
UCO Bank 18.60 13,693.69 14,330.63 -4,321.09 230,484.07
Oriental Bank 93.55 12,818.31 17,867.69 54.99 271,909.55
Indian Bank 258.80 12,720.92 19,184.81 321.95 280,065.26
IOB 12.15 11,107.10 17,631.27 -3,737.88 247,968.11
Syndicate Bank 39.90 10,708.06 21,725.40 -2,588.30 311,278.86
Bank of 16.00 9,318.57 10,849.60 -4,783.88 164,535.54
Maharashtra
Central Bank 20.75 8,397.94 22,638.57 -5,641.48 330,717.67
United Bank 10.25 7,613.62 8,559.88 -2,315.92 151,529.93
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Andhra Bank 23.30 6,953.86 18,932.22 -2,786.13 242,171.38
Vijaya Bank 46.05 6,005.60 12,589.84 727.02 177,632.05
State B Bikaner 771.85 5,402.95 9,592.47 850.60 110,336.27
State Bk Travan 608.75 4,328.47 9,608.88 337.73 114,506.78
State Bk Mysore 606.05 2,909.85 7,127.78 357.85 82,975.00
Dena Bank 12.65 2,857.69 8,932.23 -1,923.15 120,859.80
Punjab & Sind 26.20 1,577.40 8,558.67 -543.48 108,982.04
UTI - Gold 3,020.00 419.24 - - -

HDFC mission-
HDFC Bank's mission is to be a World Class Indian Bank. The objective is to
build sound customer franchises across distinct businesses so as to be the
preferred provider of banking services for target retail and wholesale customer
segments, and to achieve healthy growth in profitability, consistent with the
bank's risk appetite. The bank is committed to maintain the highest level of ethical
standards, professional integrity, corporate governance and regulatory
compliance. HDFC Bank’s business philosophy is based on five core values:
Operational Excellence, Customer Focus, Product Leadership, People and
Sustainability.
HDFC vision-
To be customer driven best managed enterprise that enjoys market leadership in
providing housing related finance.

Core Values

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PESTEL of HDFC bank

HDFC Bank Limited PESTEL analysis is a strategic tool to analyse the macro
environment of the organization. PESTEL stands for - Political, Economic,
Social, Technological, Environmental & Legal factors that impact the macro
environment of HDFC Bank Limited.

Changes in the macro-environment factors can have a direct impact on not only
the HDFC Bank Limited but also can impact other players in the Foreign
Regional Banks. The macro-environment factors can impact the Porter Five
Forces that shape strategy and competitive landscape. They can impact

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 individual firm’s competitive advantage or overall profitability levels of the
financial industry.
PESTEL analysis provides great detail about operating challenges HDFC Bank
Limited will face in prevalent macro environment other than competitive forces.
For example, an Industry may be highly profitable with a strong growth trajectory
but it won't be any good for HDFC Bank Limited if it is situated in unstable
political environment.
Political Factors that Impact HDFC Bank Limited
Political factors play a significant role in determining the factors that can impact
HDFC Bank Limited's long-term profitability in a certain country or market.
HDFC Bank Limited is operating in Foreign Regional Banks in more than dozen
countries and expose itself to different types of political environment and political
system risks. The achieve success in such a dynamic Foreign Regional Banks
industry across various countries is to diversify the systematic risks of political
environment. HDFC Bank Limited can closely analyze the following factors
before entering or investing in a certain market-

 Political stability and importance of Foreign Regional Banks sector in the

country's economy.
 Risk of military invasion
 Level of corruption - especially levels of regulation in financial sector.
 Bureaucracy and interference in Foreign Regional Banks industry by
government.
 Legal framework for contract enforcement
 Intellectual property protection
 Trade regulations & tariffs related to Financial
 Favoured trading partners
 Anti-trust laws related to Foreign Regional Banks
 Pricing regulations – Are there any pricing regulatory mechanism for Financial
 Taxation - tax rates and incentives
 Wage legislation - minimum wage and overtime
 Work week regulations in Foreign Regional Banks
 Mandatory employee benefits
 Industrial safety regulations in the financial sector.
 Product labelling and other requirements in Foreign Regional Banks

Economic Factors that Impact HDFC Bank Limited

The Macro environment factors such as – inflation rate, savings rate, interest rate,
foreign exchange rate and economic cycle determine the aggregate demand and

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 aggregate investment in an economy. While micro environment factors such as
competition norms impact the competitive advantage of the firm. HDFC Bank
Limited can use country’s economic factor such as growth rate, inflation &
industry’s economic indicators such as Foreign Regional Banks industry growth
rate, consumer spending etc. to forecast the growth trajectory of not only –sector
name-- sector but also that of the organization. Economic factors that HDFC Bank
Limited should consider while conducting PESTEL analysis are -

 Type of economic system in countries of operation – what type of economic

system there is and how stable it is.
 Government intervention in the free market and related Financial
 Exchange rates & stability of host country currency.
 Efficiency of financial markets – Does HDFC Bank Limited needs to raise capital
in local market?
 Infrastructure quality in Foreign Regional Banks industry
 Comparative advantages of host country and financial sector in the particular
country.
 Skill level of workforce in Foreign Regional Banks industry.
 Education level in the economy
 Labor costs and productivity in the economy
 Business cycle stage (e.g. prosperity, recession, recovery)
 Economic growth rate
 Discretionary income
 Unemployment rate
 Inflation rate
 Interest rates

Social Factors that Impact HDFC Bank Limited

Society’s culture and way of doing things impact the culture of an organization
in an environment. Shared beliefs and attitudes of the population play a great role
in how marketers at HDFC Bank Limited will understand the customers of a
given market and how they design the marketing message for Foreign Regional
Banks industry consumers. Social factors that leadership of HDFC Bank Limited
should analyse for PESTEL analysis are -

 Demographics and skill level of the population

 Class structure, hierarchy and power structure in the society.
 Education level as well as education standard in the HDFC Bank Limited ’s
industry
 Culture (gender roles, social conventions etc.)
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 Entrepreneurial spirit and broader nature of the society. Some societies encourage
entrepreneurship while some don’t.
 Attitudes (health, environmental consciousness, etc.)
 Leisure interests

Technological Factors that Impact HDFC Bank Limited

Technology is fast disrupting various industries across the board. Transportation
industry is a good case to illustrate this point. Over the last 5 years the industry
has been transforming really fast, not even giving chance to the established
players to cope with the changes. Taxi industry is now dominated by players
like Uber and Lyft. Car industry is fast moving toward automation led by
technology firm such as Google & manufacturing is disrupted by Tesla, which
has stated an electronic car revolution.

A firm should not only do technological analysis of the industry but also the
speed at which technology disrupts that industry. Slow speed will give more
time while fast speed of technological disruption may give a firm little time to
cope and be profitable. Technology analysis involves understanding the
following impacts -

 Recent technological developments by HDFC Bank Limited competitors

 Technology's impact on product offering
 Impact on cost structure in Foreign Regional Banks industry
 Impact on value chain structure in Financial sector
 Rate of technological diffusion

Environmental Factors that Impact HDFC Bank Limited

Different markets have different norms or environmental standards which can
impact the profitability of an organization in those markets. Even within a country
often states can have different environmental laws and liability laws. For
example, in United States – Texas and Florida have different liability clauses in
case of mishaps or environmental disaster. Similarly, a lot of European countries
give healthy tax breaks to companies that operate in the renewable sector.

Before entering new markets or starting a new business in existing market the
firm should carefully evaluate the environmental standards that are required to

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 operate in those markets. Some of the environmental factors that a firm should
consider beforehand are -

 Weather
 Climate change
 Laws regulating environment pollution
 Air and water pollution regulations in Foreign Regional Banks industry
 Recycling
 Waste management in Financial sector
 Attitudes toward “green” or ecological products
 Endangered species
 Attitudes toward and support for renewable energy

Legal Factors that Impact HDFC Bank Limited

In number of countries, the legal framework and institutions are not robust
enough to protect the intellectual property rights of an organization. A firm should
carefully evaluate before entering such markets as it can lead to theft of
organization’s secret sauce thus the overall competitive edge. Some of the legal
factors that HDFC Bank Limited leadership should consider while entering a new
market are -

 Anti-trust law in Foreign Regional Banks industry and overall in the country.
 Discrimination law
 Copyright, patents / Intellectual property law
 Consumer protection and e-commerce
 Employment law
 Health and safety law
 Data Protection

Observation and Recommendation

SUGGESTIONS AND RECOMMENDATIONS OF THE STUDY:-
 Public sector banks need to improve their counter services. Customers’
grievances should be redressed speedily and customers’ satisfaction
should always be on the top priority. Employees should be given training
to improve their attitude.
 HDFC should arrange meetings with their customers to promptness in
providing the services. It is advisable for all the banks under study to keep

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 a separate complaint-cum-suggestion box/book to enable customers to
offer suggestions and complaints.
 The working hours of the HDFC banks must be as flexible as possible. The
operating hours of banks must be extended depending upon the needs and
desires of customers. Provision for separate inquiry counter at all the banks
would be very useful especially to the illiterate customers. Efficient,
knowledgeable, customers, competent and versatile frontline staff is the
prime requirement for all the banks surveyed.
 As so many customers still using ATM cards, so there should be required
more ATM machines for the convenience of the customers. The banks
must try to find put the specific needs of different customers, so that
suitable package of services can be made available to them.
 It is believed that the suggestions offered above, if properly implemented,
will go a long way in ensuring Customers’ Satisfaction in the banks under
study. Conclusion, HDFC Bank should organize Seminar and Conference
to educate the customer regarding uses of online banking as well as
security and privacy of their account.
 HDFC Bank must emphasize the cost saving that online can provide to the
people, such as reduce transaction of cost by use of online banking.
SWOT (HDFC)

STRENTH:

 HDFC has low NPA (non-performing asset), high interest margin and
superior customer handling as compared to other banks.
 HDFC Bank is having 4787 banking outlets and 12635 ATMs across 2691
cities to serve customer through Phone Banking.
 HDFC has high degree of customer satisfaction when compared to other
private banks.
 HDFC has good financial advisors in terms of guiding customers towards
right investments.
 HDFC has lots of Awards and Recognition, it has received ‘Best Bank’
award from various financial rating institute like Dun and Bradstreet,
Financial Express, Euromoney Award for excellence, Finance Asia
Country Award etc.

WEAKNESS:

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  HDFC Bank doesn’t have strong presence in rural area. Most of the people
of villages near my town are engaged with SBI Bank being the oldest and
government bank.
 HDFC cannot enjoy first mover advantage in rural areas because people
there are hard core loyal in terms of banking services.
 Bank focuses mostly on high end clients.
 Charges of some products/services are higher than other private banks and
government banks.

OPPORTUNITY:

 HDFC has better asset quality parameters over government bank and hence
profit growth is likely to increase.
 The companies in large and SME are growing at very fast pace. HDFC has
good reputation in terms of maintaining salary account.
 HDFC has very good opportunity in some countries like Dubai, UK.
 Great scope of acquisition and strategic alliances due to strong financial
position.

THREAT:

 The non-banking financial companies and new age banks are increasing in
India.

 Government bank being already preferred by people of rural areas, are now
modernizing to compete with private banks.

 RBI has opened up to 74% for foreign investment in Indian market.

Competitive advantage in the marketing strategy of HDFC bank–

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Brand Visibility:
Reaching out to nook & corner of the country has helped the brand in increasing
its visibility in the market is not only metro or urban but also in the suburban
centres.
Subsidiaries:
The bank leverage on its other subsidiaries like Housing & Development Finance
Corporation Ltd. which is known for extending housing loans, HDFC Mutual
Fund for Mutual fund schemes, HDFC ERGO General Insurance for selling
general insurance products, HDFC Life for Life insurance, HDFC Credila for
education loan. Bank earns commission/ fees on selling/distributing these
products through its network of branches.

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HDFC Bank has been offering entire spectrum of financial products like personal
banking, SME loans, Agri Loans, NRI services, Wholesale banking through
technology driven mediums supported by smartphones and tablets which is not
only helping the customers in conveniently consuming the services but it is also
reducing the cost of distribution of the products & services by the Bank.

To reach out to the millennial customer’s bank has forayed into social media
banking through HDFC Bank On Chat through which customers and non-
customers can complete e-commerce transactions through FB messenger which
is supported by Techbins solutions Pvt. Ltd.

The bank competes with banking & NBFC financial institutions such
as ICICI Bank, Axis Banks, PSU Banks like PNB, SBI, Canara Bank, NBFC’s
like Indiabulls , Murugappa Group etc.

MARKETING STRATEGIES

Segmentation, targeting, positioning in the Marketing strategy of HDFC Bank–

HDFC has segmented the customers on the basis of income group like
formulating the structure of Classic, preferred and imperial and also using
customer financial needs to segment the market like those of in need of general
banking services (Retail & corporate banking) and those customers who are
HNI’s and are in need on investment advisory services.

Bank has the majority of its customer base who are tech-savvy, Young and are
more inclined to products coupled with technology. Product & services offered
by the company are targeted to salaried class, entrepreneurs, and High net worth
Individuals (HNI’s).

Bank has positioned itself as a preferred provider of financial services by

incorporating technological advancement in its core businesses.

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Distribution strategy in the Marketing strategy of HDFC Bank–
Being a Tech Savvy commercial banking company, HDFC bank has
decentralized it is most of the business operations by making it accessible and
user-friendly online interface.

The bank have a physical distribution network of 4750+ branches in more than
2600 cities with around 12500 ATM’s located on onshore and offshore locations.
Bank has recently introduced “EVA” an artificial intelligence based Chatbot
assistant which helps the customers in providing product information and respond
to queries of the customers on the real-time basis.

In addition, bank facilitates its services through various alternate delivery

channels such as like mobile banking, net-banking, SMS banking, phone banking,
ATMs etc.

HDFC Bank Marketing Mix (4Ps) Strategy

Product:
The product strategy and mix in HDFC Bank marketing strategy can be explained
as follows:
HDFC Bank is one of the leading banks in India. HDFC offers a wide range of
products in its marketing mix strategy, namely in personal and enterprise sector.
The various services offered by HDFC Bank are summarized as follows.
Accounts and deposits which covers savings accounts, salary accounts, current
accounts, deposits, safe deposit lockers, rural accounts and pension accounts.
HDFC Bank offers loans to meet the diverse needs and it cover personal loans,
car loans, business loans etc. HDFC offers cards which includes credit cards,
debit cards, prepaid cards, credit card reward programs and loan on credit card.
Demat options for investors which includes demat account, 2 in 1 account, 3 in 1
account and investment assist. Investment options covering Invest Track,
investment products, investment advisory group reports, PPF (public provident
fund) and sukanya samriddhi account are provided to HDFC customers.
Insurances for various options like life, health, motor insurance, travel, home,

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two-wheeler and student travel - suraksha. Forex includes travel solutions,
remittance products, other forex services for help and purchase.
HDFC Bank also includes online payment options like Pay bills and shop online,
Fund transfer options, bill payments, tax payment, donate online etc. The premier
options include Direct equity, Mutual funds, Fixed income products, Insurance,
Private equity funds, Structured products and Estate planning

Price:
Below is the pricing strategy in HDFC Bank marketing strategy:
HDFC Bank follows a competitive pricing strategy in its marketing mix but
maintains a premium level at the same time. It is clearly visible that it enjoys
maximum market capital in terms of shares in India. The other domestic
competitors are either PSUs or national bank, HDFC Bank is always priced higher
in terms of minimum cap required to open a new account. RBI controls and
regulates the pricing policies, like for any other bank in India.

Place:
Following is the distribution strategy of HDFC Bank:
HDFC banks has got a strong presence all across India. Till 2016, HDFC
outreached 4500+ branches in approx. 2600 cities/towns with 12000 ATMs.
HDFC Bank makes sure that its presence is felt in each and every corner of the
nation and every individual should avail its facilities equally. HDFC has its major
offices in cities and towns for smooth operation process. Its website is well
designed and well maintained. It facilitates ease of net banking, online payment
options, etc.

Promotion:
The promotional and advertising strategy in the HDFC Bank marketing strategy
is as follows:
HDFC Bank focuses a lot on the promotional strategy in its marketing mix.
HDFC is involved in large number of CSR activities for sustainable livelihood,
financial literacy, education, training and community initiatives. HDFC has
always made its presence feel in the media through advertisements, hoardings,
posters, ads in newspapers, magazines, promotional events, sponsorships, etc.
HDFC also has shareholdings in corporate bodies, mutual funds, financial
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institutions, etc which creates a sense of value and trust amongst the shareholders
and customers towards this particular brand.

BCG MATRIX

HDFC BANK

HDFC BANK stands at star position in BCG matrix. As HDFC bank have the
high market growth and they also have a high market share. There is a lot of
growth potential for the banking industry because of increasing disposable
income of customers, increasing working class, more volatility in other markets
also increasing importance of savings and already discussed almost 30% of the
market is still untapped.

HDFC INSURANCES

In the insurance sector, HDFC's most of the products are in star position. HDFC
insurance products have a high market share and high growth rate. So we have a
lot of opportunity for investment.

HDFC MUTUAL FUNDS

The mutual fund stands at cash cow. This shows that HDFC high market share
and low market growth rate in mutual funds. This means we should only focus
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on profitable products and try to invest in those products which are low market
growth rate but perform well if proper investment is theirs.

HDFC CREDILA

HDFC Credila, an HDFC Ltd. Company is India's First Dedicated Education

Loan Company. HDFC Credila Financial Services pioneered the concept of
specialist Education Loan lender and became India's First Dedicated Education
Loan Company. Credila stands at the Question mark. This shows that the relative
market share is low but the market growth rate is high. This has high potential to
become tomorrow's stars.

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 HSBC is one of the world’s largest banking and financial services
organizations. We serve more than 39 million customers through four
global businesses: retail banking and wealth management, commercial
banking, global banking and markets, and global private banking. Our
network covers 66 countries and territories in Europe, Asia, the Middle
East and Africa, North America and Latin America.
They aim to be where the growth is, connecting customers to opportunities,
enabling businesses to thrive and economies to prosper, and ultimately
helping people to fulfil their hopes and realize their ambitions.
Listed on the London, Hong Kong, New York, Paris and Bermuda stock
exchanges, shares in HSBC holdings plc are held by around 200,000
shareholders in 130 countries and territories.

VISION

Our vision is to be the Leading International Bank in Turkey.

MISSION

Throughout our history we have been where the growth is, connecting customers
to opportunities. We enable businesses to thrive and economies to prosper,
helping people fulfil their hopes and dreams and realise their ambitions. This is
our role and purpose.

VALUES

Dependable
 Standing firm for what is right, delivering on commitments, being resilient and
trustworthy

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 Taking personal accountability, being decisive, using judgment and common
sense, empowering others
Open to different ideas and cultures
 Communicating openly, honestly and transparently, welcoming challenge,
learning from mistakes
 Listening, treating people fairly, being inclusive, valuing different perspectives
Connected to customers, communities, regulators and each other
 Building connections, being aware of external issues, collaborating across
boundaries
 Caring about individuals and their progress, showing respect, being supportive
and responsive
These values reflect the best aspects of our 150-year heritage. They are vital to
fulfilling our purpose of helping businesses to thrive, economies to prosper and
people to realize their ambitions.

PESTLE ANALYSIS

 Political

Since HSBC is international, it operates in different countries such as USA, China

and Europe with different laws, regulations and policies. Abiding by these laws
protects and enables HSBC to operate successfully and effectively in the financial
system. HSBC also have their protection strategies against any governmental
restrictions and limitations.

 Economical

The growth of HSBC is based on the stability of the economic factors of foreign
exchange rate and stock markets worldwide. The HSBC chairman claims that
performance and revenue increase is better due to global and commercial banking
and markets especially in rapid developing regions like ASIA where economic
conditions are encouraging. These are the contributing factors that helped HSBC
survive the 2008 financial crisis thus a successful economic strength

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  Social

To be successful in any businesses, you would need to please your consumers.

The social factor of the PESTEL environmental focuses on the forever changing
social trends, the forever changing consumer taste. This factor focusses on the
rapidly changing consumer market.

Below are some of the social factors that HSBC faces:

• People desiring to lead a luxurious and modern lifestyle on credit.

• Government encouraging SMEs.
• The immense growth of the Islamic community (Sharia compliant
products).

 Technological

Technological advancements effect the way HSBC operate on a daily basis and
how the organisation shares information, HSBC is a global bank using the very
latest technology which can make them vulnerable to likes of cyber-attacks.
HSBC has come under fire along with other financial institutions on how they
protect customers data and in previous years due to sensitive data loss have lost
customers to competitors. This was a result of negligence by HSBC technical
management teams. This was a operational weakness that violated data protection
laws, However the data that was lost did not have an effect on the functionality
of the organisation but as a result many loyal customers left

 Legal

Every business is governed by rules and legislations; HSBC is no different. There

are lot of rules and regulations that are linked to HSBC. The main issue that they
at the minute face are PPI claims they mis-sold a lot of payment protection
insurances, without their customers not knowing. This is causing them bad
publicity and leading customers to walk out on them.
They set out millions of Pounds to pay these off and they also adopted FCA act
to handle their PPI claims. Even with these in place they still face bad press for
delaying payments.

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  Environmental

HSBC goals are to reduce the carbon emission from employees and improves the
procedure and technology to make thing better through 10 points. As it list below:

 Sustainability engagement
 Supply chain collaboration
 Eco efficiency fund
 Energy efficiency
 Waste reduction
 Low-carbon energy programmes
 Green building programmes
 Group data centre energy efficiency
 Paperless banking
 Sustainable travel
In order to make this plan become more efficiency and effectiveness with a
companywide climate champion program by training more than 2500 employees
to become as an ambassador.

OBSERVATION

Conclusion The marketing environment is without a doubt very complicated

system. Companies need to be more considerate of many factors that will have to
be integrated based on the trends in the market place. In general, a unique and
distinctive strategy is highly adopted by most industries in order to have a
competitive advantage in the business environment. There are many ways on how
management can construct a certain strategy. This however, needs to be
constantly evaluated and updated based on the constant changing market trends.

Being the leader of the banking and finance industries, HSBC is said to use
different strategies that will meet market needs and demands. Analysis shows that
HSBC has outgrown its competitors because of the strategies that they used which
adhere to the current situation of the market environment. All in all, it is said that
if the company has been able to choose the most appropriate strategy, there is a
greater possibility of becoming a world leader in any industry,

RECOMMENDATIONS

 HSBC is already a brand name which is recognized all over the country.
Yet I have come up with my own assessment and some recommendation

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 for HSBC, on the areas that I have covered so far. Like- HSBC has very
few numbers of branches in Bangladesh.
 They should expand their branches more in Dhaka as well as in the whole
country. This will not only increase their business area but also give chance
to serve more customers.
 They are more concerned with the global and corporate customer group.
 In addition to that, they can also give some special service and facilities to
other customer groups as well.
 HSBC has always stepped ahead in terms of bringing new technological
advantage in products and services.
 They also put focus on providing and ensuring quality service to all of their
customers.
 Even though Bangladesh Bank has many rules and regulation for the banks
operating in Bangladesh, but then also competitors are increasing day by
day in this sector.
 So, considering this factor they should have proper strategic plans, both
short term and long term, so that they can face any type of challenge and
their business can have smooth running.

SWOT ANALYSIS
SWOT analysis is a very essential analysis that every company undergoes to
understand the working of their company.

Strengths

 Strong dealer community – It has built a culture among distributor &

dealers where the dealers not only promote company’s products but also
invest in training the sales team to explain to the customer how he/she can
extract the maximum benefits out of the products.
 Successful track record of developing new products – product innovation.
 Reliable suppliers – It has a strong base of reliable supplier of raw material
thus enabling the company to overcome any supply chain bottlenecks.
 Highly skilled workforce through successful training and learning
programs. HSBC is investing huge resources in training and development
of its employees resulting in a workforce that is not only highly skilled but
also motivated to achieve more.
 Automation of activities brought consistency of quality to HSBC products
and has enabled the company to scale up and scale down based on the
demand conditions in the market.
 Good Returns on Capital Expenditure – HSBC is relatively successful at
execution of new projects and generated good returns on capital
expenditure by building new revenue streams.

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  Strong Free Cash Flow – HSBC has strong free cash flows that provide
resources in the hand of the company to expand into new projects.
 Successful track record of integrating complimentary firms through
mergers & acquisition. It has successfully integrated number of technology
companies in the past few years to streamline its operations and to build a
reliable supply chain.

Weakness

 Limited success outside core business – Even though HSBC is one of the
leading organizations in its industry it has faced challenges in moving to
other product segments with its present culture.
 The company has not been able to tackle the challenges present by the new
entrants in the segment and has lost small market share in the niche
categories. HSBC has to build internal feedback mechanism directly from
sales team on ground to counter these challenges.
 Financial planning is not done properly and efficiently. The current asset
ratio and liquid asset ratios suggest that the company can use the cash more
efficiently than what it is doing at present.
 Not very good at product demand forecasting leading to higher rate of
missed opportunities compare to its competitors. One of the reasons why
the inventory is high compare to its competitors is that HSBC is not very
good at demand forecasting thus end up keeping higher inventory both in-
house and in channel.
 Days inventory is high compare to the competitors – making the company
raise more capital to invest in the channel. This can impact the long-term
growth of HSBC
 The profitability ratio and Net Contribution % of HSBC are below the
industry average.

Opportunities

 HSBC's strong capitalization position will help it to acquire additional

assets to further strengthen the bank and sustain its business model.
 The market development will lead to dilution of competitor’s advantage
and enable HSBC to increase its competitiveness compare to the other
competitors.
 Lower inflation rate – The low inflation rate brings more stability in the
market, enable credit at lower interest rate to the customers of HSBC.
 Decreasing cost of transportation because of lower shipping prices can also
bring down the cost of HSBC’s products thus providing an opportunity to
the company - either to boost its profitability or pass on the benefits to the
customers to gain market share.

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  New customers from online channel – Over the past few years the company
has invested vast sum of money into the online platform. This investment
has opened new sales channel for HSBC. In the next few years the
company can leverage this opportunity by knowing its customer better and
serving their needs using big data analytics.

Threats

 The threat of financial losses, credit issues, and unethical behaviour among
the world's banks and financial institutions means that HSBC could be
threatened by prospects and customers' fears of losses may lead to a
shrinking pool of prospects and customers.
 The global credit crunch has led to challenges for all banks in terms of
lending products for many of its customer base, reducing the ability to lend
to many prospects.
 No regular supply of innovative products – Over the years the company
has developed numerous products but those are often response to the
development by other players. Secondly the supply of new products is not
regular thus leading to high and low swings in the sales number over period
of time.
 Rising pay level especially movements such as $15 an hour and increasing
prices in the China can lead to serious pressure on profitability of HSBC
 Growing strengths of local distributors also presents a threat in some
markets as the competition is paying higher margins to the local
distributors.

STRATEGIES FOLLOWED BY HSBC

HSBC being a global bank uses a mix of demographic and geographic

segmentation strategy to make its products/ services available to the individual
and corporate customers.
Differentiation targeting strategy is what used by HSBC Bank in order to satisfy
the saving and investment needs of the customers.
A value-based positioning strategy is used by HSBC to emerge as a bridge
between different segments of customers around the world.

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Marketing mix

 Product
HSBC has divided its activities under four different groups that are Private
Banking, Wealth Management & Retail Banking, Investment Banking &Global
Banking and Commercial Banking. It provides its consumers with varied list
of products and services that differ slightly from country to country. In India, the
product and service portfolio for the company includes-
 Personal Banking – Under this category the bank offers wealth
management services, retail banking, internet banking, personal loans
and international credit card in two varieties classic and gold. Through an
extensive ATM network, the bank provides banking services round the
clock.
 Non-Resident Indian Banking – With its worldwide offices the bank
provides services like internet banking, NRI related schemes of banking,
personal banking and private banking opportunities.
 Financial Planning Services – This includes services offered to both non-
resident and resident Indians like stock broking access, insurance services,
custodian management and investment opportunities.
 Corporate Banking – The bank has corporate relations with foreign banks
operating in the country as well as with Indian domestic banks providing
services that includes capital finance, corporate deposits, trade facilities,
syndications, cash management and payments.
 Business Banking – It provides the Business Vantage and Business account
to medium-size business and small-size business entities with services like
business banking in multi-branches, doorstep banking and phone banking.
 Cash and Payment Management – This includes providing the corporate
clients solutions to cash management including payment and collection
services. The consumer facilities include financial transactions; obtain
information about global financial markets and reviewing of international
and national accounts.
 Factoring services and trade – A wide range of solutions provided for
national and international business to meet the specific requirements of
each customer.
 Institutional Banking – This includes trade services, cash management,
payments, clearing and custody, correspondent services and e-banking
services to financial institutions, insurance companies and securities
houses.
 Treasury and Capital markets – It includes money market, foreign
exchange and derivatives in major currencies.
 Custody and Clearing – This includes services like fund distribution, unit
distribution and cash management.

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 Price
As the bank is in a competitive market, its pricing policies are subject to
change according to the market trends and according to the policy changes by
its rival banks. All the policies are subject to improvisation at every level and
at any point of time. In order to eliminate as much competition as possible,
HSBC has adopted an aggressive policy of pricing that involves acquisition
through available funds. The bank has also gone for value added
pricing policies for its various services to maintain its customer base.

In order to fix its pricing policies HSBC has played the twin roles of pricing
component. The company has realized that it must firstly attract the customers
so that they can purchase the numerous products and services provided by the
bank and later generate revenues. The factors that are influencing the pricing
policy decisions of the bank are maximization of market share, profit
maximization, survival strategies, personal objectives and social
considerations. The pricing strategy is varied and dynamic for different
products and services.

The important point to consider is that Banks are also under the control of
government. So, the load rates, interest rates and other such derivatives are all
in the control of government. And hence on the pricing point of view, there is
hardly any differentiation which the bank can implement. However, the
pricing differentiation happens on a transaction level, wherein they try to
maintain a premium value driven approach. HSBC provides more value In
their products when compared to SBI or other nationalized bank. Hence, the
value-based pricing can be classified as the pricing used by the Banking sector.

 Place
HSBC is the largest World Bank in assets capacity and in order to operate
successfully it has opened six thousand and six hundred offices in at least
eighty-five countries. Its operations are active around the world in territories
that spread in continents like South America, North America, Africa, Europe
and Asia. HSBC has also set up countless banks in various countries under
different names but they have all been branded together.

The bank has been expanding its branches everywhere in order to spread its
wide network. HSBC provides its global customers various financial and

40
 banking services. The Banks are set up at locations that provide best possible
services and to execute its services efficiently the bank has recruited well-
trained and competent staff to handle every query of the customer and provide
them easy accessibility to their transactions.

HSBC allows its customers internet banking services. Customers have an easy
approachability to the various internet services provided by the bank round the
clock twenty-four hours a day. ATMs are set at strategic locations in almost
all the major points so that the customers can easily benefit from the services.
Trained guards are recruited outside the ATMs and the banks so that the
customers get a feeling of safety while conducting transactions.

More importantly, HSBC is known for its partnership with corporate

customers and managing the corporate assets as well as managing the large
amount of transactions which are a part of any large company. In the
distribution mix of HSBC, you will find more concentration of corporate
clients as compared to residential clients.

 Promotion
To create awareness about its bank and the various services it provides, HSBC
has decided to use extensive promotional strategy. Advertising was the best
tool and therefore HSBC placed advertisements on billboards, newspapers and
business magazines. Informative commercials were telecast at regular
intervals on the television so that the consumers could become familiar with
the bank and its strategies.

OTHER STRATEGIES

Competitive advantage in the Marketing strategy of HSBC Bank –

The most important asset of any service-based company is its employees and
HSBC bank have more than 2, 55, 000 employees who are working in enhancing
the capabilities of the Bank.

Consolidating its operation and facilitating its products and services to customers
through its network of branches in different parts of the world by acting locally

41
(i.e. Go global act local) has helped the company in being ahead of its peer
companies.

Bank has access to 90% of the world’s GDP & Capital flows and is connected
with developed nations & markets.

Distribution strategy in the Marketing strategy of HSBC Bank –

HSBC bank has more than 4700 branches worldwide which is helping the
company to create touch points for customers. In this age of advanced
information technology, the company like HSBC discourage customers from
visiting branch and this they do by making their website and financial transactions
easily accessible to their customers through internet banking so that a customer
can avail services even at their locations rather than visiting the branch for the
same.

Market analysis in the Marketing strategy of HSBC Bank –

Due to the presence of the national and MNC players who are competing with
banking & NBFC (Non-Banking Financial Company), sustaining in the financial
market is challenging. Market forces such as customers, the central bank of the
respective countries & competitors are playing an important role in the success
of the industry.

Customer analysis in the Marketing strategy of HSBC Bank –

HSBC customers are from the upper-middle-income group when it comes to

individual customers and a corporate customer is those who are interested in
financial services like those of wealth management, investment advisory etc

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COMPETITIVE ANALYSIS

HSBC is one of the leading companies. The companies does a comparative

analysis to check their position as per the industry they belong in. this is a
continuous process and is based on various aspects. Here it is considered on the
past revenues.

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