Management Strategy

EXECUTIVE SUMMARY
ICICI BANK LTD. is one of the Indian private bank and has global presence also. It has a market share of 8.2% which is second largest after SBI. Our report talks about the strategies adopted by the bank to make it successful. We are also giving some recommendations at last which bank should follow to continue its success.

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INTRODUCTION
ICICI Bank was established in 1994 by the Industrial Credit and Investment Corporation of India, an Indian financial institution, as a wholly owned subsidiary and in 2001 ICICI merged with ICICI bank. ICICI Bank Ltd. is an Indian diversified financial services company headquartered in Mumbai, Maharashtra. It is the second largest bank in India by assets and third largest by market capitalization. It offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank has a network of 2,575 branches and 8003 ATMs in India, and has a presence in 19 countries, including India. ICICI Bank is one of the Big Four banks of India, along with State Bank of India, Punjab National Bank and HDFC Bankits main competitors ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). Vision To be the leading provider of financial services in India and a major global bank.

Mission: We will leverage our people, technology, speed and financial capital to be the banker of first choice for our customers by delivering high quality, world-class products and services Expand the frontiers of our business globally Play a proactive role in the full realization of India's potential Maintain a healthy financial profile and diversify our earnings across businessman and geographies. Maintain high standards of governance and ethics. Contribute positively to the various countries and markets in which we operate Create value for our stakeholders

(icicibank.com)

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Management Strategy COMPETITVE ADVANTAGE ICICI Bank has a competitive advantage of its Size and global presence across the world vis a vis the private sector banks. With respect to the public sector banks, the competitive advantage is more on account of the technological platforms and the responsive staff and faster service. It has already retained number 1 bank amongst the private sector banks business wise. The sustainable competitive advantage over its competitors is based on their technological platforms which requires constant up gradations and investments to make it robust and sustainable.

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PESTEL ANALYSIS

Economical Political Government policy and budget Budget measures Monitory policy FDI limit GDP Monsoon Inflation Savings and accounts Agriculture credit Interest rates Raising living standard Disposable income

Legal Reserve bank of INDIA act Banking regulation act

Socio cultural

ICICI BANK

Changes in life style Literacy rate Demographic of large population Shift toward the nuclear

Technical Technology in banks Core banking solutions (CBS) ATM Internet IT services and mobile banking

(oppapers.com)

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VALUE CHAIN FOR ICICI BANK

Branch Network ATM Net Banking Firm Infrastructure Foreign Subsidiaries Foreign Branches Mobile Banking Call Centre

Human Resource Management

Technology Development

Develop Appropriate Simulation Training E Learning Program Performance based Client Facing Incentive Employees Net Banking, Safe & Secure trading Portals Money2india.com Core Banking Solution

Call centre, Mobile Banking, ATMs, Data Analytics, Plastic Cards Time Deposit Borrowings from the RBI, Market Source of CASA Revenue / Higher Fee Based Income through Forex dealings, Guarantees, LCs, private banking and cross selling of Insurance products. Deposits Increased NIM through high CASA share and high CD ratio ( Through Borrowings) Convenience to the Global Branches Direct Sales Persons Better customer service customers ( Khayaal Aapka) Global Subsidiaries Technological , non Phone Banking facility branch channels Higher Quality Loans Technological E Mail Query platforms Different subsidiaries exposure to industry supported by the based on anticipated direct sales team economic and Market trends Structured finance Customized to the corporate requirements Operations Logistics

Marketing & Sales

After Sales Service

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PORTERS FIVE FORCES

BARGAINING POWER OF SUPPLIERS

-Low supplier bargaining power -Few alternatives available -Subject to RBI Rules and Regulations -Not concentrated -Forward integration -Nature of suppliers

THREAT OF NEW ENTRANT

HIGH-Low barriers to entry -Government policies are supportive -Globalization and liberalization policy -High exit barriers

INDUSTRY RIVARLY Intense competition Many private, public, Co-operative, foreign banks

THREAT OF SUBSTITUTES
Low threat from substitutes As of now, no alternative to 100% banking

BARGAINING POWER OF CUSTOMERS

-High bargaining power -Low switching cost -Large no. of alternatives -Homogeneous service by banks -Full information available with customers

(docstoc.com) Page 6

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CRITICAL SUCCESS FACTORS

The CSF of the Banks depends on the Business strategy adopted by the Bank. ICICI Bank has been in the market since 1990s and can be classified under Analyzer and defender The CSF required for following these strategies is, S No 1 2 3 4 CSF Ability of bank operation management Ability of bank marketing Ability of developing bank trademarks Ability of financial market management Weight Age 35% 40% 10% 15%

The First 3 include success items, which the bank can control, such as computerization, speed of handling business, and staff politeness and kindness, etc. However, the fourth factor includes certain items, which the bank can control, such as the quantity and contents of service items; but others, such

(Chen, 1999)

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SWOT ANALYSIS
STRENGTHS BRAND NAME MARKET SHARE HUGE NETWORK DIVERSIFIED PORTFOLIO SALARY ACCOUNT WORKING HOURS TREASURY DEPARTMENT TECHNOLOGY AGGRESSIVE MARKETING ADVANCED INFRASTRUCTURE ONLINE SERVICES Weakness TRANSACTION COST FOCUS ONLY ON HIGH END CUSTOMERS DEFENSIVE APPROACH IN LENDING LITTLE PRESENCE OUTSIDE INDIA POOR CUSTOMER CARE/SERVICE LESS CREDIT PERIOD

OPPORTUNITIES Fast growing insurance business in the country. Untapped rural markets. An applied research centre to create opportunities for developing techniques to provide added-value services. Deregulation of Interest rates Increasing individual income Remittances

THREATS Loss of market share to commercial banks and HFCs Higher than expected increase in funding cost Risk of fraud and NPA Lack of infrastructure in rural areas could constrain investment. High volume/low cost market is intensely competitive. Very high competition prevailing in the industry Threat from credit card collections dept. Unlike Government Banks, an account needs a minimum balance of Rs.10,000

(researchandmarkets.com) Page 8

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Management Strategy MARKET ANALYSIS

The total assets of all scheduled commercial banks by end-March 2010 is estimated at ` 40,90,000 crores. That will comprise about 65 per cent of GDP at current market prices. There are about 67,000 branches of Scheduled banks spread across India. ICICI has US$91 billion assets and more than 2500 branches. Market share of ICICI bank is 8.2%, HDFC bank is 6.8%, SBI is 21.6

COMPETITOR POSITION MATRIX In comparison to its competitors, ICICI Bank has a higher total weighted score of 2.94 which is higher than HDFC (2.84) and Axis (2.16). This implies that ICICI bank is on a better position as compared to its competitors.

EFE MATRIX
Based on the opportunities and threats to the company the weighted score evaluation was found to be as 2.81 which is good for the bank.

BCG matrix
This matrix helps to analyze the current position of the SBU with respect to its market share and relative growth. ICICI bank currently is financially strong. In fact its market share recently increased to 8.2% and the industry growth rate is also high. Thus Bank can be placed under the first quadrant in the matrix known as cash Stars.

Diversification
ICICI bank made diversification in 8 areas by making subsidiaries : ICICI LOMBARD: - the largest leading private general insurance company. ICICI Prudential life insurance Company Ltd:-one of the fastest growing Life Insurance Company. ICICI Securities Ltd.:-Provide capital to corporate sector including large, medium and small enterprises. ICICI Prudential asset management Company Ltd. ICICI Venture:-Most successful and one of the largest private equity firms which focus on area like private equity, takeovers and real estate. ICICI Home Finance :One of the leading Home loan financing company ICICI direct.com:-Deals in equity, mutual Funds, Life Insurance. ICICI Foundation: Deals with education empowerment. (moneycontrol.com)

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Mergers &Acquisitions
ICICI bank made all horizontal mergers & acquisitions: 2001: Bank of Madurai(Merger with swap ratio 1:2) 2005: Investitsionno-Kreditny Bank (IKB), a Russian bank 2007: Sangli Bank 2010: Bank of Rajasthan

Global Expansion
In 2001 in order to achieve growth, the Board of ICICI Bank decided to expand into international markets with a focus on the international remittance business. ICICI Bank plans to enter the global markets through a mix of subsidiaries, offshore branches and representative offices. Subsidiaries: ICICI Bank UK PLC(The company's UK subsidiary has established branches in Belgium and Germany) ICICI Bank Canada ICICI Bank Eurasia LLC Branches United States Singapore Bahrain Hong Kong Sri Lanka Qatar

Representative offices United Arab Emirates China, South Africa Bangladesh Thailand Malaysia and Indonesia

(moneycontrol.com)

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Corporate Social responsibility

Corporate Social Responsibility programmes for Elementary Education Read to Lead Phase I Read to Lead is an initiative of ICICI Bank to facilitate access to elementary education for underprivileged children in the age group of 314 years including girls and tribal children from the remote rural areas. Read to Lead Phase II In Phase II of the Read to Lead programme, ICICI Bank has supported the establishment of 63 libraries that will reach out to approximately 7,200 children in the rural areas of Jagdalpur block of Bastar district in Chhattisgarh. The programme includes building libraries, sourcing books and conducting various interactive activities to make the library a dynamic centre for learning. Go Green Initiative The Go Green Initiative is an organization wide initiative that moves beyond moving people, processes and customers to cost effective automated channels to build awareness and consciousness of our environment, our nation and our society. Green products and services Instabanking It is the platform that brings together all alternate channels under one umbrella and gives customers the option of banking through Internet banking, i-Mobile banking, IVR Banking. This reduces the carbon footprint of the customers by ensuring they do not have to resort to physical statements or travel to their branches. Vehicle Finance As an initiative towards more environment friendly way of life, Auto loans offer 50% waiver on processing fee on car models which uses alternate mode of energy. Carbon Footprint Calculator Inputs include region, user input of the distance traveled in a particular medium of transport daily, electricity consumed per month and LPG cylinder/piped natural gas used per month. It calculates the net carbon footprint to create awareness and sensitize people about the environment. It also shows the world's and India's average carbon footprint.

Corporate governance
Group Anti Money Laundering Policy The ICICI Group AML Policy establishes the standards of AML compliance and is applicable to all activities. Code of Conduct ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors and employees
(economictimes.com) Page 11

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Management Strategy CONCLUSION ICICI Bank has a competitive advantage of its size and global presence across the world vis a vis the private sector banks. With respect to the public sector banks, the competitive advantage is more on account of the technological platforms and the responsive staff and faster service. It has already retained number 1 bank amongst the private sector banks business wise. If ICICI Bank diligently follows the strategy they have defined for companys growth, ICICI should be able to maintain long term sustainable competitive advantage over its competitors by continuously innovating its Business Model. The sustainable competitive advantage over its competitors is based on their technological platforms which requires constant up gradations and investments to make it robust and sustainable. ICICI Bank being analyzer and defender should also focus much on its critical success factors of marketing and increasing the efficiency and the effectiveness of the bank operations. The staffs are to be well trained and succession path should be clear

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BIBLIOGRAPHY
Retrieved February Sunday, 2012, from icicibank.com: www.icicibank.com/aboutus/about-us.html Retrieved February Monday, 2012, from oppapers.com: www.oppapers.com/subjects/pest-analysis-oficici-bank-page1.html Retrieved February Saturday, 2012, from moneycontrol.com: www.moneycontrol.com BANKS PRIVATE SECTOR Retrieved from researchandmarkets.com: www.researchandmarkets.com/.../icici_bank_limited_swot_analysis.p. Chen, T.-y. (1999). Babk Marketing , 83. docstoc.com.. Retrieved from www.docstoc.com/docs/.../Porter-5-Forces-of-Indian-Banking-Indust.. economictimes.com. (n.d.). Retrieved February Friday, 2012, from economictimes.indiatimes.com ... Stock Quotes ICICI Bank Ltd.

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