Yes Bank: Competitive Strategy of a Late Entrant
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Case Code: BSTR276 Case Length: 17 Pages Period: 2003-2007 Pub Date: 2008 Teaching Note: Available |
Price: Rs.300 Organization: YES BANK Industry: Banking and Financial Services Countries: India Themes: Entry Strategy, Competitive Strategy, Differentiation |
Abstract Case Intro 1 Case Intro 2 Excerpts
"One of the strengths and differentiating features of Yes Bank is its knowledge banking approach. Our approach is service-oriented; we offer what is missing in the marketplace. We offer choice and convenience to customers (to enhance their banking experience)."
-Rana Kapoor, Founder, Managing Director and CEO, YES BANK.
"[Rana Kapoor's] aim is to break the stereotype image of banks and bankers. There is, of course, all the seriousness that goes with managing other people's money. Prudent management, new technology, skilled people. Good corporate governance, top quality service. Plenty of social involvement. But there is also an emphasis on conveying the message that banking is not merely a set of cold hi-tech assemblages and serious-looking bankers."
-The Week, May 22, 2005.
Saying Yes to Differentiation
In December 2006, YES BANK (Yes Bank) was rated the third best bank in India by BusinessWorld in its annual survey of listed public and private sector banks in the country. It was also ranked second among the new private sector banks in the Financial Express-Ernst & Young5 survey of India's best banks for the year 2006 published on March 28, 2007. Yes Bank had experienced unprecedented growth in the Indian banking sector since it started operations in late 2004. This was a significant achievement for a bank which had started late when compared to other new age private sector banks.
When Yes Bank announced its decision to enter the Indian banking space in the mid-2000s, industry watchers were skeptical about the move as they felt that the market was already overcrowded. But soon after starting operations, the bank caught the attention of analysts as well as its competitors with its highly differentiated strategy. The bank differentiated itself from other players in the industry through its unique 'knowledge banking approach', emphasis on technology, and human resources. The knowledge banking approach was its main pillar of differentiation and using this it provided specialized services to various sunrise industries through domain experts. It also used the latest technology available in the industry to provide highly innovative solutions. Its strategy of outsourcing information technology (IT) infrastructure to proven experts in the field not only helped it to provide superior service to its customers but also to reduce costs and focus on its core business activities.
Recognizing that human resources were a source of sustainable competitive advantage, it strove to differentiate itself from its competitors by adopting some winning HR practices. Several new initiatives like giving the employees the freedom to work in the field of his/her own specialized interest and the independence to take initiatives with regard to his/her ideas were especially noteworthy. Analysts attributed the bank's fast ascendance, despite its late entry into the market, to its innovative strategies. Unrelenting efforts to provide world class services coupled with a steadfast maintenance of operational standards were the prime reasons for the bank's phenomenal growth...
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