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
Excerpts
Differentiating Itself in an Overcrowded Market
According to industry experts, Yes Bank was entering an overcrowded market dominated by public sector banks such as the State Bank of India (SBI) and private banks such as ICICI Bank and HDFC Bank. In addition, there were many cooperative banks and foreign multinational banks. Moreover, many of the product lines of these banks had become commoditized...
The Growth Story
The bank had grown at a tremendous pace since its inception. In the 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. The bank started its operations with just 250 employees and two branches. As of October 2007, it was operating with 60 branches and 3,263 employees. The bank's business size was Rs. 800 million in December 2006....
A Successful Market Entry
According to the analysts, the bank's competence in terms of using high-end technology, its 'knowledge banking' approach, and emphasis on highly qualified human resources helped it to differentiate itself from other private banks in an increasingly commoditized market. In particular, its knowledge banking initiative drew a lot of interest. The fact that the bank catered to a niche segment of the market with a differentiated strategy meant that it did not have to compete with other banks on price...
Outlook
The high growth rates of the Indian economy provided tremendous opportunities for the Indian banking sector. The future also posed several challenges as the banking sector was set to open up to the foreign players by 2009. The banks were gearing up to face the competition. In tune with the developments, Yes Bank wanted to grow into a major bank in India with a presence all over the country. 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...
Exhibits
Exhibit I: Yes Bank's Business Segments
Exhibit II: Audited Financial Results of Yes Bank for Financial Year
Exhibit III: A List of Awards and Recognition Received by Yes Bank
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