SYDENHAM COLLEGE OF COMMERCE & ECONOMICS

2015-16

Program under faculty of commerce

MASTER OF COMMERCE (EVENING)

Project Title:

SWOT ANALYSES OF HDFC BANK

IN PARTIAL FULLFILMENT OF THE REQUIRNMENT UNDER SEMESTER

BASED ON

CREDIT & GRADING SYSTEM FOR POST GRADJUATION SEMESTER – I

SUBMITTED BY:

CHINTAN CHIMANBHAI KANABAR

Roll no. 27 (Div – A)

PROJECT GUIDE:

Dr. Anil R Chougule

1

DECLARATION

I, CHINTAN CHIMANBHAI KANABAR of Sydenham College of

commerce & economics ‘B’ Road, Church gate, Mumbai – 400020 currently

studying in M.com –I (Evening), Hereby declare that I have completed this

project on SWOT ANALYSES OF HDSC BANK for semester –I of the

academic year 2015-16. The information given under the project is true and

fair to the best of my knowledge.

Signature of Student:

.

CHINTAN C KANABAR

Roll No. 27 (DIV-A)

2

CERTIFICATE

This is to certify that MR. CHINTAN CHIMANBHAI KANABAR of the M.COM – I

(Evening) Semester-I has successfully completed project on Trend in India’s Trade Policies

under the Guidance of Mr. T.B GADHAVE

1. Project Guide. : T.B GADHAVE

2. Internal Examiner :

3. External Examiner :

Date :

Time :

3

INDEX

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SWOT ANALYSES OF HDFC BANK

AKNOWLEDGMENT

I would firstly like to thank “UNIVECITY OF MUMBAI” For giving us the liberty to

select the topic which will benefit to us in the future. I would like to thanks to the

principle of Sydenham College of commerce & economics Dr. Annasaheb Khemnar for

giving me an opportunity to study in the esteemed college and doing the course of

accounting. I would like to express my sincere gratitude and thanks to professor who is

my project guide , as he has been guiding light on this project and also provided me with

the best of his knowledge, advice and encouragement which helps in the successful

completion of my project.

My colleague and specially my parent who has also supported and encourages me the

success of this project to the large extant is also dedicated to them.

I would like to thanks all those who helped me but I forgotten to mention in this space.

Signature of Student:

.

CHINTAN C KANABAR

Roll No. 27 (DIV-A)

5

SWOT ANALYSES OF HDFC BANK

INTRODUCTION

SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses,

and for identifying both the Opportunities open to you and the Threats you face. What

makes SWOT particularly powerful is that, with a little thought, it can help you uncover

opportunities that you are well placed to exploit. And by understanding the weaknesses of

your business, you can manage and eliminate threats that would otherwise catch you

unawares.

More than this, by looking at yourself and your competitors using the SWOT framework,

you can start to craft a strategy that helps you distinguish yourself from your competitors,

so that you can compete successfully in your market

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SWOT ANALYSES OF HDFC BANK

HOW TO USE SWOT ANALYSIS :

Originated by Albert S Humphrey in the 1960s, SWOT Analysis is as useful now as it

was then. You can use it in two ways - as a simple icebreaker helping people get together

to "kick off" strategy formulation, or in a more sophisticated way as a serious strategy

tool

Strengths and weaknesses are often internal to your organization, while opportunities and

threats generally relate to external factors. For this reason the SWOT Analysis is

sometimes called Internal-External Analysis and the SWOT Matrix is sometimes called

an IE Matrix.

STRENGTHS :

Your strengths are usually easy to identify, through your continuing dialogue with

customers and suppliers. Your records (eg sales) will also help to indicate areas where

you are particularly strong (eg rising sales for a particular product).

For most businesses, strengths will fall into four distinct categories.

1. Sound finances may give you advantages over your competitors.

Important factors might include:

Positive cash flow.

Growing turnover and profitability.

Skilled financial management, good credit control and few bad debts.

A strong balance sheet.

Access to extensive credit, a strong credit rating, and a good relationship with the

bank and other sources of finance.

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SWOT ANALYSES OF HDFC BANK

2. Marketing may be the key to your success.

For example, your business may enjoy:

Market leadership in a profitable niche.

A good reputation and a strong brand name.

An established customer base.

A strong product range.

Effective research and development, use of design and innovation.

A skilled sales force.

Thorough after-sales service.

Protected intellectual property (eg registered designs, patented products)

3. Management and personnel skills and systems may provide equally

importantunderpinnings for success.

These may include factors such as:

Management strength in depth.

The ability to make quick decisions.

Skilled employees, successful recruitment, and effective training and

development.

Good motivation and morale.

Efficient administration

4. Strengths in production may include the right premises and plant, and good sources

of materials or sub-assemblies.

You may benefit from:

Modern, low-cost production facilities.

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SWOT ANALYSES OF HDFC BANK

Spare production capacity.

A good location.

Effective purchasing and good relationships with suppliers

Be aware that strengths are not always what they seem. Strengths may imply weaknesses

(for example, market leaders are often complacent and bureaucratic) and often imply

threats (for example, your star salesman may be a strength - until he resigns).

WEAKNESSES :

Your weaknesses are often known but ignored. A SWOT analysis should be the starting

point for tackling underperformance in your business.

1. Poor financial management may result in situations where:

Insufficient funds are available for investment in new plant or product

development.

All available security, including personal assets and guarantees, is already

pledged for existing borrowings.

Poor credit control leads to unpredictable cash flow.

2. Lack of marketing focus may lead to:

Unresponsive attitudes to customer requirements.

A limited or outdated product range.

Complacency and a failure to innovate.

Over-reliance on a few customers.

3. Management and personnel weaknesses are often hard to recognize, except with

hindsight. Familiar examples are: 9

SWOT ANALYSES OF HDFC BANK

Failure to delegate and train successors.

Expertise and control locked up in a few key personnel.

Inability to take outside advice.

High staff turnover.

4. Inefficient production, premises and plant can undermine any business, however

hard people work. Typical problems include:

Poor location and shabby premises.

Outdated equipment, high cost production and low productivity.

Long leases tying the business to unsuitable premises or equipment.

Inefficient processes.

OPPORTUNITIES :

External changes provide opportunities that well managed businesses can turn to their

advantage.

Changes involving organisations and individuals which directly affect your business

may open up completely new possibilities. For example:

a) Deterioration in a competitor’s performance, or the insolvency of a

competitor.

b) Improved access to potential new customers and markets (eg overseas).

c) Increased sales to existing customers, or new leads gained through them.

d) The development of new distribution channels (eg the Internet).

e) Improved supply arrangements, such as just-in-time supply or outsourcing

non-core activities.

f) The opportunity y to recruit a key employee from a competitor.10

SWOT ANALYSES OF HDFC BANK

g) The introduction of financial backers who are keen to fund expansion.

The broader business environment may shift in your favour. This may be caused by:

a) Political, legislative or regulatory change.

For example, a change in legislation that requires customers to purchase a

product.

b) Economic trends.

For example, falling interest rates reducing the cost of capital.

c) Social developments.

For example, demographic changes or changing consumer requirements

leading to an increase in demand for your products.

d) New technology.

For example, new materials, processes and information technology

THREATS :

Threats can be minor or can have the potential to destroy the business.

Compare both strengths and weaknesses by benchmarking key areas with those in other

businesses.

3 Directors’ Briefing

Changes involving organisations and individuals that directly affect your business can

have far-reaching effects.

For example:

• Improved competitive products or the emergence of new competitors.

• Loss of a significant customer.

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SWOT ANALYSES OF HDFC BANK

• Creeping over-reliance on one distributor or group of distributors.

• Failure of suppliers to meet quality requirements.

• Price rises from suppliers.

• Key personnel leaving, perhaps with trade secrets.

• Lenders reducing credit lines or increasing charges.

• A rent review threatening to increase costs, or the expiry of a lease.

• Legal action (eg being sued by a customer).

The broader business environment may alter to your disadvantage. This may be the result

of:

• Political, legislative or regulatory change.

For example, new regulation increasing your costs or requiring product redesign.

• Economic trends.

For example, lower exchange rates reducing your income from overseas.

• Social developments.

For example, consumer demands for ‘environmentally-friendly’ products.

• New technology.

For example, technology that makes your products obsolete or gives competitors an

advantage.

When looking at opportunities and threats, PEST Analysis can help to ensure that you

don't overlook external factors, such as new government regulations, or technological

changes in your industry.12

SWOT ANALYSES OF HDFC BANK

EXAMPLE SWOT :

A start-up small consultancy business might draw up the following SWOT Analysis:

STRENGTHS:

We are able to respond very quickly as we have no red tape, and no need for

higher management approval.

We are able to give really good customer care, as the current small amount of

work means we have plenty of time to devote to customers.

Our lead consultant has strong reputation in the market.

We can change direction quickly if we find that our marketing is not working.

We have low overheads, so we can offer good value to customers

WEAKNESSES:

Our company has little market presence or reputation.

We have a small staff, with a shallow skills base in many areas.

We are vulnerable to vital staff being sick, and leaving.

Our cash flow will be unreliable in the early stages.

OPPORTUNITIES:

Our business sector is expanding, with many future opportunities for success.

Local government wants to encourage local businesses.

Our competitors may be slow to adopt new technologies.

THREATS:

Developments in technology may change this market beyond our ability to adapt.

A small change in the focus of a large competitor might wipe out any market

position we achieve

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SWOT ANALYSES OF HDFC BANK

SWOT ANALYSES OF HDFC BANK :

HDFC Bank Limited is an Indian banking and financial services company

headquartered in Mumbai, Maharashtra. Incorporated in 1994, it is the fifth largest bank

in India as measured by assets. It is the largest private sector bank in India by market

capitalization as of February 2014. The bank was promoted by the Housing Development

Finance Corporation, a premier housing finance company (set up in 1977) of India

According to the Brand Trust Report 2014, HDFC was ranked 32nd among India's most

trusted brands. HDFC was ranked 45th on the list of top 50 Banks in the world in terms of

their market capitalization

SERVICES PROVIDED BY HDFC BANK :

WHOLESALE BANKING SERVICES

HDFC Bank provides a range of commercial and transactional banking services,

including working capital finance, trade services, transactional services, cash

management, etc. to large, small and mid-sized corporate and agriculture-based

businesses in India. The bank is also a leading provider of these services to its corporate

customers, mutual funds, stock exchange members and banks

RETAIL BANKING SERVICES

HDFC Bank was the first bank in India to launch an International Debit Card in

association with VISA (Visa Electron). The bank also issues the MasterCard Maestro

debit card. The Bank launched its credit card business in late 2001.

By the end of June 2013, it had a credit card base of 5.94 million. By March 2012, the

bank had a total card base (debit and credit cards) of over 19.7 million.

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SWOT ANALYSES OF HDFC BANK

The Bank is also one of the leading players in the "merchant acquiring" business with

over 240,000 point-of-sale (POS) terminals for debit / credit cards acceptance at

merchant establishments. The Bank is positioned in various net based B2C opportunities

including a wide range of Internet banking services for Fixed Dep

osits, Loans, Bill Payments, etc.

TREASURY

The bank has three main product areas - Foreign Exchange and Derivatives, Local

Currency Money Market & Debt Securities, and Equities. These services are provided

through the bank's Treasury team. To comply with statutory reserve requirements, the

bank is required to hold 25% of its deposits in government securities. The Treasury

business is responsible for managing the returns and market risk on this investment

portfolio

CONCEPTUAL FRAMEWORTK

INTERNAL AND EXTERNAL FACTORS

SWOT analysis aims to identify the key internal and external factors seen as important to

achieving an objective. SWOT analysis groups key pieces of information into two main

categories.

Internal factors – the strengths and weaknesses internal to the organization.

External factors – the opportunities and threats presented by the environment

external to the organization

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SWOT ANALYSES OF HDFC BANK

Analysis may view the internal factors as strengths or as weaknesses depending upon

their effect on the organization's objectives. What may represent strengths with respect

to one objective may be weaknesses (distractions, competition) for another objective.

The factors may include all of the 4Ps; as well as personnel, finance, manufacturing

capabilities, and so on.

The external factors may include macroeconomic matters, technological change,

legislation, and socio cultural changes, as well as changes in the marketplace or in

competitive position. The results are often presented in the form of a matrix.

SWOT analysis is just one method of categorization and has its own weaknesses. For

example, it may tend to persuade its users to compile lists rather than to think about

actual important factors in achieving objectives. It also presents the resulting lists

uncritically and without clear prioritization so that, for example, weak opportunities

may appear to balance strong threats.

It is prudent not to eliminate any candidate SWOT entry too quickly. The importance

of individual SWOTs will be revealed by the value of the strategies they generate. A

SWOT item that produces valuable strategies is important. A SWOT item that

generates no strategies is not important.

ADVANTAGES AND DISADVANTAGES OF SWOT ANALYSES16

SWOT ANALYSES OF HDFC BANK

ADVANTAGES

APPLICATION NEUTRALITY

SWOT analysis is conducted by specifying an objective and conducting a brainstorming

session to identify internal and external factors that are favorable and unfavorable to the

objective's achievement. This approach remains the same whether the analysis is used to

support strategic planning, opportunity analysis, competitive analysis, business

development or product development processes.

MULTI-LEVEL ANALYSIS

Valuable information about your objective's chances can be gained by viewing each of

the four elements of the SWOT analysis -- strengths, weaknesses, opportunities and

threats -- independently or in combination. For example, identified threats in the business

environment, such as new government regulations regarding a product design or the

introduction of competing products, might alert the business owner that a proposed

investment in a new manufacturing production line should be more carefully evaluated.

In addition, an awareness of a company weakness such as a lack of qualified employees

might suggest a need to consider outsourcing particular functions. In turn, opportunities

such as the availability of low-interest loans for startups might encourage the

entrepreneur to pursue the development of a new product to meet a rising customer

demand. In contrast, identified strengths, such as extensive experience in an industry

experiencing rapid international growth, might suggest the need to partner with foreign

companies.

DATA INTEGRATION :

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SWOT ANALYSES OF HDFC BANK

SWOT analysis requires that quantitative and qualitative information from a number of

sources be combined. Access to a range of data from multiple sources improves

enterprise-level planning and policy-making, enhances decision-making, improves

communication and helps to coordinate operations.

SIMPLICITY :

SWOT analysis requires neither technical skills nor training. Instead, it can be performed

by anyone with knowledge about the business in question and the industry in which it

operates. The process involves a facilitated brainstorming session during which the four

dimensions of the SWOT analysis are discussed. As a result, individual participants’

beliefs and judgments are aggregated into collective judgments endorsed by the group as

a whole. In this way, the knowledge of each individual becomes the knowledge of the

group.

COST :

Because SWOT analysis requires neither technical skills nor training, a company can

select a staff member to conduct the analysis rather than hire an external consultant. In

addition, SWOT is a somewhat simple method that can be performed in a fairly short

time.

DISADVANTAGES :

NO WEIGHTING FACTORS :

SWOT analysis leads to four individual lists of strengths, weaknesses, opportunities and

threats. However, the tool provides no mechanism to rank the significance of one factor

versus another within any list. As a result, any one factor's true impact on the objective

can't be determined.

AMBIGUITY

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SWOT ANALYSES OF HDFC BANK

SWOT analysis creates a one-dimensional model in which each problem attribute is

viewed as a strength, weakness, opportunity or threat. As a result, each attribute is seen to

have only one influence on the problem being analyzed. However, one factor might be

both a strength and a weakness.

For example, locating a chain of stores on well-traveled streets that grant easy access to

customers might be reflected in increased sales. However, the costs of operating high-

visibility facilities can make it difficult to compete on price without a large sales volume.

SUBJECTIVE ANALYSIS

To significantly impact company performance, business decisions must be based on

reliable, relevant and comparable data. However, SWOT data collection and analysis

entail a subjective process that reflects the bias of the individuals who collect the data and

participate in the brainstorming session. In addition, the data input to the SWOT analysis

can become outdated fairly quickly

USAGE OF SWOT ANALYSES

The usefulness of SWOT analysis is not limited to profit-seeking organizations. SWOT

analysis may be used in any decision-making situation when a desired end-state

(objective) is defined. Examples include: non-profit organizations, governmental units,

and individuals. SWOT analysis may also be used in pre-crisis planning and preventive

crisis management. SWOT analysis may also be used in creating a recommendation

during a viability study/survey.

STRATEGY BUILDING

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SWOT ANALYSES OF HDFC BANK

SWOT analysis can be used effectively to build organization or personal strategy. Steps

necessary to execute strategy-oriented analysis involve: identification of internal and

external factors (using popular 2x2 matrix),

selection and evaluation of the most important factors and identification of relations

existing between internal and external features

For instance: strong relations between strengths and opportunities can suggest good

condition of the company and allow using aggressive strategy. On the other hand strong

interaction between weaknesses and threats could be analyzed as potential warning and

advise for using defensive strategy

MATCHING AND CONVERTING :

One way of utilizing SWOT is matching and converting. Matching is used to find

competitive advantage by matching the strengths to opportunities. Converting is to apply

conversion strategies to convert weaknesses or threats into strengths or opportunities. An

example of conversion strategy is to find new markets. If the threats or weaknesses

cannot be converted, a company should try to minimize or avoid them.

SWOT ANALYSIS OF HDFC :

STRENGTHS

HDFC bank is the second largest private banking sector in India having 2,201

branches and 7,110 ATM’s

HDFC bank is located in 1,174 cities in India and has more than 800 locations to

serve customers through Telephone banking

The bank’s ATM card is compatible with all domestic and international

Visa/Master card, Visa Electron/ Maestro, Plus/cirus and American Express. This 20

SWOT ANALYSES OF HDFC BANK

is one reason for HDFC cards to be the most preferred card for shopping and

online transactions

HDFC bank has the high degree of customer satisfaction when compared to other

private banks

The attrition rate in HDFC is low and it is one of the best places to work in private

banking sector

HDFC has lots of awards and recognition, it has received ‘Best Bank’ award from

various financial rating institutions like Dun and Bradstreet, Financial express,

Euromoney awards for excellence, Finance Asia country awards etc

HDFC has good financial advisors in terms of guiding customers towards right

investments 

Weakness

HDFC bank doesn’t have strong presence in Rural areas, where as ICICI bank its

direct competitor is expanding in rural market

HDFC cannot enjoy first mover advantage in rural areas. Rural people are hard

core loyals in terms of banking services.

HDFC lacks in aggressive marketing strategies like ICICI

The bank focuses mostly on high end clients

Some of the bank’s product categories lack in performance and doesn’t have reach

in the market

The share prices of HDFC are often fluctuating causing uncertainty for the

investors

Opportunities

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SWOT ANALYSES OF HDFC BANK

HDFC bank has better asset quality parameters over government banks, hence the

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 corporate salary accounts

HDFC bank has improved it’s bad debts portfolio and the recovery of bad debts

are high when compared to government banks

HDFC has very good opportunities in abroad

Greater scope for acquisitions and strategic alliances due to strong financial

position

Threats

HDFC’s nonperforming assets (NPA) increased from 0.18 % to 0.20%. Though it

is a slight variation it’s not a good sign for the financial health of the bank

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

The HDFC is not able to expand its market share as ICICI imposes major threat

The government banks are trying to modernize to compete with private banks

RBI has opened up to 74% for  foreign banks to invest in Indian market

COMPANY PROFILE

As of March 31, 2008, the Bank’s distribution network was at 761 Branches and 1977

ATMs in 327 cities as against 684 branches and 1,605 ATMs in 320 cities as of March

31, 2007. Against the regulatory approvals for new branches in hand, the Bank expects to

further expand the branch network by around 150 branches by June 30, 2008.

During the year, the Bank stepped up retail customer acquisition with deposit accounts

increasing from 6.2 million to 8.7 million and total cards issued (debit and credit cards) 22

SWOT ANALYSES OF HDFC BANK

increasing from 7 million to 9.2 million. Whilst credit growth in the banking system

slowed down to about 22% for the year ended 2007-08.

The Bank’s net advances grew by 35.1% with retail advances growing by 38.6% and

wholesale advances growing by 30%, implying a higher market share in both segments.

The transactional banking business also registered healthy growth With cash management

volumes increased by around 80% and trade services volumes by around 40% over the

previous year. Portfolio quality as of March 31, 2008 remained healthy with gross

nonperforming assets at 1.3% and net non-performing assets at 0.4% of total customer

assets. The Bank‟s provisioning policies for specific loan loss provisions remained higher

than regulatory requirements.

MARCH 2006 MARCH 2007 MARCH 2008

CITIED 228 316 327

BRANCHES 535 684 761

ATMS 1323 1605 1977

TECHNOLOGY USED IN HDFC BANK

In the era of globalization each and every sector faced the stiff competition from their

rivals. And world also converted into the flat from the globe. After the policy of

liberalization and RBI initiatives to take the step for the private sector banks, more and

more changes are taking the part into it. And there are create competition between the

private sector banks and public sector bank. Private sector banks are today used the latest

technology for the different transaction of day to day banking life.

As we know that Information Technology plays the vital role in the each and every

industries and gives the optimum return from the limited resources. Banks are service 23

SWOT ANALYSES OF HDFC BANK

industries and today IT gives the innovative Technology application to Banking

industries. HDFC BANK is the leader in the industries and today IT and HDFC BANK

together combined they reached the sky.

New technology changed the mind of the customers and changed the queue concept from

the history banking transaction. Today there are different channels are available for the

banking transactions.

Centralized Processing Units Derived Economies of Scale

Electronic Straight Through

Processing

Reduced Transaction Cost

Data Warehousing , CRM Improve cost efficiency, Cross

sell

Innovative Technology

Application

Provide new or superior

products

DATA ANALYSES

24

SWOT ANALYSES OF HDFC BANK

HDFC Bank Limited (HDFCBANK) - Financial and Strategic SWOT Analysis Review

provides you an in depth strategic SWOT analysis of the company’s businesses and

operations. The profile has been compiled by Global Data to bring to you a clear and an

unbiased view of the company’s key strengths and weaknesses and the potential

opportunities and threats. The profile helps you formulate strategies that augment your

business by enabling you to understand your partners, customers and competitors better.

The profile contains critical company information including:-

Business description – A detailed description of the company’s operations and

business divisions.

Corporate strategy – Analyst’s summarization of the company’s business strategy.

SWOT Analysis – A detailed analysis of the company’s strengths, weakness,

opportunities and threats.

Company history – Progression of key events associated with the company.

Major products and services – A list of major products, services and brands of the

company.

Key competitors – A list of key competitors to the company.

Key employees – A list of the key executives of the company.

Executive biographies – A brief summary of the executives’ employment history.

Key operational heads – A list of personnel heading key departments/functions.

Important locations and subsidiaries – A list and contact details of key locations

and subsidiaries of the company.

Detailed financial ratios for the past five years – The latest financial ratios derived

from the annual financial statements published by the company with 5 years

history.

25

SWOT ANALYSES OF HDFC BANK

Interim ratios for the last five interim periods – The latest financial ratios derived

from the quarterly/semi-annual financial statements published by the company for

5 interims history.

Highlights :

HDFC Bank Limited (HDFC) offers a wide range of financial and banking products

and services to individuals, retail customers and corporate clients. It offers checking

accounts, loans, cards, insurance, investments, private banking and forex services.

The bank undertakes trading operations on the proprietary account, foreign exchange

operations, and derivatives trading both on the proprietary account and customer

flows. The bank also provides products and services through its two subsidiaries,

namely, HDFC Securities Limited (HSL) and HDB Financial Services Limited

(HDBFS).

HDFC also operates as a clearing and settlement bank to various stock exchanges.

Key benefits of buying this profile include:

You get detailed information about the company and its operations to identify

potential customers and suppliers.

The profile analyzes the company’s business structure, operations, major products and

services, prospects, locations and subsidiaries, key executives and their biographies

and key competitors. Understand and respond to your competitors’ business structure

and strategies, and capitalize on their weaknesses. Stay up to date on the major

developments affecting the company.

26

SWOT ANALYSES OF HDFC BANK

The company’s core strengths and weaknesses and areas of development or decline

are analyzed and presented in the profile objectively. Recent developments in the

company covered in the profile help you track important events .Equip yourself with

information that enables you to sharpen your strategies and transform your operations

profitably.

Opportunities that the company can explore and exploit are sized up and its growth

potential assessed in the profile. Competitive and/or technological threats are

highlighted. Scout for potential investments and acquisition targets, with detailed

insight into the companies’ strategic, financial and operational performance.

Financial ratio presented for major public companies in the profile include the

revenue trends, profitability, growth, margins and returns, liquidity and leverage,

financial position and efficiency ratios. Gain key insights into the company for

academic or business research.

Key elements such as SWOT analysis, corporate strategy and financial ratios and

charts are incorporated in the profile to assist your academic or business research

needs.

27

SWOT ANALYSES OF HDFC BANK

BUSINESS STRETEGY :

HDFC BANK mission is to be "A World Class Bank", benchmarking themselves

against international standards and best practices in terms of product offerings,

technology, service levels, risk management and audit & compliance.

The objective is to build sound customer franchises across distinct businesses so as to be

a preferred provider of banking services for target retail and wholesale customer

segments, and to achieve a healthy growth in profitability, consistent with the Bank's risk

appetite. Bank is committed to do this while ensuring the highest levels of ethical

standards, professional integrity, corporate governance and regulatory compliance.

Continue to develop new product and technology is the main business strategy of the

bank. Maintain good relation with the customers is the main and prime objective of the

bank

Based in India, HDFC Bank is the largest private universal bank by market capitalization,

with more than 25 million customers, an extensive distribution network of 2544 branches

spread across 1399 cities and more than 55,000 employees. To maintain its leadership,

HDFC Bank used CRM next to establish a single platform for execution of its strategy

across products, departments and channels. The result, over FY2008- 2011, bank's net

profit has grown from USD 318 million to USD 1033 million at a consistent rate of 30%

quarter-on-quarter for the last 3 years. During this period the banks customer base has

grown by 113%, while the loyalty index has grown from 38 to 62 as opposed to industry

average of 54.

HDFC Bank believes several steps together led to its program success, including:

28

SWOT ANALYSES OF HDFC BANK

Top management vision and support

Understanding & communicating the vision of the program clearly

Driving it as a transformation rather than a technology project

Ensuring adequate resource allocation in term of time and money

Delivering quick wins to maintain the enthusiasm

Implementation methodology

Creating a 3 year roadmap to achieve the full potential of the vision

Creating an internal CRM excellence team

Ensuring adequate multi-wave iterations for process unification

Taking quick decision during departmental conflicts

Understanding that user adoption is driven by value & not technology

Respecting technology complexities

Creating reliable integrations because they must tested day-on-day

Ensuring right strategies to work with LOB system that are not open

Understanding scalability requirements is key to decision making

Understanding the impact of reports and isolating the work load

Ownership experience

Training production teams to own such a high impact CRM

Ensuring user training are part of the HR induction program

Ensuring adequate user feedback and improvement cycles

Using strong production change management practices to deliver always on

availability

Selecting the right Partners

Understanding that such transformation need practice specialists

29

SWOT ANALYSES OF HDFC BANK

Selecting a partner who can add value to the vision

Listening to the partner especially when the advise is counter intuitive

The Opportunity

To retain competitive advantage, HDFC Bank realized that in today’s environment only

unparallel customer experience could provide a sustained edge much needed to maintain

its growth rate in spite of increasing balance sheet size. Unlike other banks, HDFC Bank

did not want to buy growth at the expense of its profitability.

The bank quickly realized that the answer was a two prong strategy

Raising the bar for its internal processes (although the bank were already

outperforming the industry) to preserve profitability.

Ensuring consistency of information and actions across channels to create an

unmatched customer experience - gaining trust and loyalty to sustain the growth

trajectory.

The Challenge

Despite the clarity in strategy, execution was an obvious challenge. Such a radical

strategy was first of its kind and faced tremendous risk due to inherent complexity and

technological challenges, considering:

The transformation had to happen across a geographically distributed team,

without hampering business and at a pace that kept it relevant.

Streamlining deliveries, keeping in mind the readiness and the ground realities.

Leveraging the data warehouse to build intelligence on customers and deploying

this information at various touch points to help maximize customer life cycle

value.

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SWOT ANALYSES OF HDFC BANK

Scalability of the system given the large data volumes, 55,000+ user base,

workflow complexities, integration, synchronization and incremental updates.

High Impact improvement areas

Customer 360 view

Creating one view of customer relationships, interactions, and product/service

offering with unified workflow for all sales & service interactions.

Customer intimacy: What do they buy? What do they need? How do they behave?

Sales process reengineering

Manage end-to-end sales process across departments for all products on a single

platform.

Ensure unification improves TAT backed by escalations at different stages of the

process, irrespective of action happening in CRM or LOB systems.

Customer experience management

Enable service and action guarantee across channels.

Enforce customer courtesies, empower relationship managers with requisite

information, define contact strategies based on customer segment bands.

Effective cross selling capability

Use CRM to enhance cross sell, up-sell capabilities across all customer touch points.

As one of the top IT spenders, HDFC Bank has deep relationships with all key

Technology partners. Aware of ground realities, the bank focused on three key parameter

to execute a vision that had no parallel

An ultra-scalable product with an architecture capable of managing

Over 55,000 users serving over 25 million customers.

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SWOT ANALYSES OF HDFC BANK

Integration capabilities that is reliable and capable of managing complex & diverse

scenarios while retaining traceability.

An implementation partner - a firm believer in practice leadership with extensive

banking domain knowledge and capability to execute the vision.

Customer 360 view

Creating a unified customer view by collating and massaging data from various

sources including the data warehouse.

Controlling customer information based on the role of users.

Enabling access to single view across various channels like branch, phone

banking, etc.

Integrated sales platform

Multi-wave process workouts to ensure unification and consolidation of all

unstructured processes (run on excel) and semi-automated processes.

Phasing out 6 applications like lead tracking system, customer contact

management, etc.

Integrating with 7 core and origin systems to provide end-to-end status visibility.

Process TAT guaranteed by alerts and multi-stage escalations across departments

and channels.

Using mobile & two way SMS capabilities to create leads, update status, request

for customer offers, etc.

Customer experience management

Enabling improved relationship management by creating virtual portfolios and

accountability.

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SWOT ANALYSES OF HDFC BANK

Ensuring information availability at all customer touch points to boost the quality

of interactions.

Enabling system driven contact strategies based on customer bands to ensure

aligned actions.

Focus on roadmap to establish CRM next as a single destination for all needs.

Effective cross selling capability

The platform operates across all channels, providing global visibility and status of

offers.

Various systems integrated to provide event based triggering such as large

deposits, channel usage, etc.

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SWOT ANALYSES OF HDFC BANK

GROWTH ANALYSES :

At HDFC Bank, we consistently aim to reduce the gap in access to financial services in

the country by offering avenues of savings and credit to the low income society in a

comprehensive and affordable manner. To cater to the basic banking needs of the

financially underprivileged and relatively untapped geographical areas, we have adopted

a customer-centric approach. In line with this approach, we offer the Basic Savings Bank

Deposit Account (BSBDA) which provides customised solutions to suit the needs of

different classes of customers.

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SWOT ANALYSES OF HDFC BANK

BRANCHES st As of 31 March 2015

RURALURBANSEMI-URBANMETROPOLITAN

Pradhan Mantri Jan Dhan Yojana

In the reporting period, we sustained the spirit of providing basic banking facilities to

the unbanked population in our execution of the Pradhan Mantri Jan Dhan Yojana

(PMJDY) through our branches, Bank Mitras and other alternate channels. Under this

mission, we were allocated 1,449 urban wards and 453 Sub Service Areas (SSA),

across 25 States and 2 Union Territories.

We identified unbanked households in allocated wards and SSAs by conducting

household surveys, which were completed well within the deadline set by Department

of Financial Services (DFS).Further, account opening for all unbanked households

was completed with 100% of the unbanked households provided with bank accounts.

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SWOT ANALYSES OF HDFC BANK

The Bank's Yamuna Nagar branch has been recognised by DFS for achieving the

highest value in a branch across the country. By using appropriate technology, we

achieved all our targets s within the deadline of 31 Jan 2015 and are now among the

leading private sector banks in terms of Account Value and number of accounts

opened under PMJDY.

In the reporting period, the Bank launched an exclusive Forex Plus card for Hajj and

Umrah pilgrims to make payments during the pilgrimage in a convenient and secure

manner. This card also helps pilgrims avoid carrying Saudi Riyals in cash, which

might get misplaced.

The Forex Plus card can be also be used to withdraw money from ATMs and comes

with a back-up card which can be activated in case of loss or damage to the primary

card. The card can be reloaded from any branch of the Bank in case the amount

loaded in the card is exhausted. Through this initiative the Bank is reaching out to

close to 1.7 lakh pilgrims across India who are expected to make the annual

pilgrimage.

We give utmost importance to serving our customers responsibly. At HDFC Bank,

responsible service encompasses following ethical practices, ensuring data privacy

and security, communicating effectively, seeking regular feedback, and addressing

grievances to satisfaction. Regular engagement with customers helps us achieve each

of the above while understanding their expectations and accordingly improving our

service

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SWOT ANALYSES OF HDFC BANK

Our Communication and Awareness Committee (CAAC) monitors compliance with

RBI guidelines on customer education to help prevent fraud attempts and to mend the

loop holes in data security.In case of service-deficiencies such as unauthorised

debiting of accounts and payment of cheques after acknowledgement of stop payment

instructions, our Customer Compensation Policy allows for customers to be

compensated for the financial losses they may have incurred.

Through feedback channels such as surveys, daily internal checks, quarterly call

evaluations and service quality assessments, we endeavour to seek feedback from our

customers to analyse the levels of satisfaction as well as to understand their issues.

Customers with grievances are encouraged to approach designated authorities for

recording, resolution and escalation of their complaints .Such complaints are resolved

in a timely manner and efforts are made to prevent recurrence wherever possible .In

cases where customers do not receive a response within one month from date of

complaint or in cases of dissatisfaction with the response received from the bank, the

Banking Ombudsman appointed by the Reserve Bank of India (RBI) may be

approached

Customer Complaints

ATM transaction

disputes on

HDFC Bank's

ATMs

ATM transaction

disputes on other

banks' ATMs

Other than ATM

transaction

disputes

Credit Card

Complaints

Pending at the beginning

of the year

159 1601 456 0

Received during the yea 11300 82572 72075 3

Resolved during the yea 11388 82839 72034 3

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SWOT ANALYSES OF HDFC BANK

CONCLUSION

Realistic recognition of the weaknesses and threats that exist for your effort is the first

step to countering them with a robust and creative set of strengths and opportunities. A

SWOT analysis identifies your strengths, weaknesses, opportunities and threats to assist

you in making strategic plans and decisions

SWOT is a simple yet comprehensive way of assessing the positive and negative forces

within and without your organization, so you can be better prepared to act effectively.

The more stakeholders you involve in preparing the SWOT, the more valuable your

analysis will be •Whatever courses of action you decide on, the four-cornered SWOT

analysis prompts you to move in a balanced way throughout your program. It reminds

you to:

Build on your strengths Minimize your weaknesses, Seize opportunities ,Counteract

threats A SWOT analysis will be most helpful if you use it to support the vision, mission,

and objectives you have already defined. The SWOT will at least provide perspective,

and at best will reveal connections and areas for action.

HDFC Bank Limited (HDFCBANK) - Financial and Strategic SWOT Analysis Review

provides you an in-depth strategic SWOT analysis of the company’s businesses and

operations. The profile has been compiled by Global Data to bring to you a clear and an

unbiased view of the company’s key strengths and weaknesses and the potential

opportunities and threats. The profile helps you formulate strategies that augment your

business by enabling you to understand your partners, customers and competitors bettel

38

SWOT ANALYSES OF HDFC BANK

HDFC Bank Limited (HDFC) offers a wide range of financial and banking products and

services to individuals, retail customers and corporate clients. It offers checking accounts,

loans, cards, insurance, investments, private banking and forex services. The bank

undertakes trading operations on the proprietary account, foreign exchange operations,

and derivatives trading both on the proprietary account and customer flows.

The bank also provides products and services through its two subsidiaries, namely,

HDFC Securities Limited (HSL) and HDB Financial Services Limited (HDBFS). HDFC

also operates as a clearing and settlement bank to various stock exchanges.

BIBLOGRAPHY

www.investopedia.comwww.answer.com

www.encyclopedia.com

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