Presented To : Prof. Sivaji Gupta Roy
Presented By :
Group - 7
Ankita Priyadarshani
Vinay Agarwal
Subham Tiwari
Subhadeep Chakraborty
Sourav Basu
Sourin Guha
Lokesh Kanodia
HISTORY
ICICI Bank was initially advanced in 1994 by ICICI Limited, an Indian money related foundation, and was its entirely claimed backup. ICICI's shareholding in ICICI Bank was diminished to 46% through an open offering of offers in India in financial 1998, a value offering as ADRs recorded on the NYSE in monetary 2000, ICICI Bank's obtaining of Bank of Madura Limited in an all-stock amalgamation in financial 2001, and auxiliary market deals by ICICI to institutional speculators in financial 2001 and financial 2002. ICICI was shaped in 1955 at the activity of the World Bank, the Government of India and agents of the Indian industry. The chief goal was to make improvement money related establishment for giving medium-term and long haul task financing to Indian organizations. During the 1990s, ICICI changed its business from an advancement monetary foundation offering just task fund to a differentiated budgetary administration gathering offering a wide assortment of items and administrations, both legitimately and through various auxiliaries and offshoots like ICICI Bank. In 1999, ICICI become the primary Indian organization and the main bank or money related foundation from non-Japan Asia to be recorded on the NYSE. Afterthought of different corporate organizing options with regards to the developing focused situation in the Indian financial industry, and the move towards all-inclusive banking, the administrations of ICICI and ICICI Bank framed the view that the merger of ICICI with ICICI Bank would be the ideal vital option for the two substances, and would make the ideal lawful structure for the ICICI gathering's all-inclusive financial procedure. The merger would improve an incentive for ICICI investors through the consolidated substance's entrance to minimal effort stores, more prominent open doors for procuring expense based pay and the capacity to take an interest in the installments framework and give exchange banking administrations. The merger would upgrade an incentive for ICICI Bank investors through an enormous capital base and size of activities, consistent access to ICICI's solid corporate connections developed more than five decades, section into new business fragments, higher piece of the overall industry in different business portions, especially charge based administrations, and access to the huge ability pool of ICICI and its auxiliaries. In October 2001, the Boards of Directors of ICICI and ICICI Bank affirmed the merger of ICICI and two of its completely claimed retail fund backups, ICICI Personal Financial Services Limited, and ICICI Capital Services Limited, with ICICI Bank. The merger was affirmed by investors of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India on April 2002. Resulting in the merger, the ICICI gathering's financing and banking activities, both discount and retail, have been incorporated in a solitary substance.
PESTEL ANALYSIS
PESTEL analysis gives incredible insight regarding working difficulties ICICI Bank Limited will look in predominant large scale conditions other than aggressive powers. For instance, an Industry might be profoundly productive with a solid development direction yet it won't be any use for ICICI Bank Limited on the off chance that it is arranged in the temperamental world of politics.
POLITICAL FACTORS: Political elements assume a noteworthy job in deciding the components that can affect ICICI Bank Limited's long haul gainfulness in a specific nation or market. ICICI Bank Limited is working in Money Center Banks in excess of dozen nations and open itself to various sorts of the world of politics and political framework dangers. The make progress in such a powerful Money Center Banks industry crosswise over different nations is to differentiate the orderly dangers of the world of politics. ICICI Bank Limited can intently dissect the accompanying variables before entering or putting resources into a specific market
● Political stability and importance of the Money Center Banks sector in the country's economy. ● Risk of military invasion ● Level of corruption - especially levels of regulation in the Financial sector. ● Bureaucracy and interference in the Money Center Banks industry by government. ● Legal framework for contract enforcement ● Intellectual property protection ● Trade regulations & tariffs related to Financial ● Favored trading partners ● Anti-trust laws related to Money Center 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 Money Center Banks ● Mandatory employee benefits ● Industrial safety regulations in the Financial sector. ● Product labeling and other requirements in Money Center Banks
ECONOMIC FACTORS: The Macro condition factors, for example, – expansion rate, reserve funds rate, loan cost, outside conversion scale, and financial cycle decide the total interest and total interest in an economy. While miniaturized scale condition factors, for example, rivalry standards sway the upper hand of the firm. ICICI Bank Limited can utilize nation's financial factor, for example, development rate, swelling and industry's monetary pointers, for example, Money Center Banks industry development rate, shopper spending and so forth to gauge the development direction of - sectoryname- - part as well as that of the association. Monetary elements that ICICI Bank Limited ought to consider while directing 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. ● The efficiency of financial markets – Does ICICI Bank Limited need to raise capital in the local market? ● Infrastructure quality in the Money Center Banks industry ● Comparative advantages of the host country and Financial sector in a particular country. ● Skill level of workforce in the Money Center 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: Society's way of life and method for doing things sway the way of life of an association in a situation. Mutual convictions and demeanors of the populace assume an incredible job in how advertisers at ICICI Bank Limited will comprehend the clients of a given market and how they plan the promoting message for Money Center Banks industry purchasers. Social factors that initiative of ICICI Bank Limited ought to dissect for PESTEL analysis are - ● Demographics and skill level of the population ● Class structure, hierarchy, and power structure in society. ● Education level as well as education standard in the ICICI Bank Limited ’s industry ● Culture (gender roles, social conventions, etc.) ● Entrepreneurial spirit and the broader nature of society. Some societies encourage entrepreneurship while some don’t. ● Attitudes (health, environmental consciousness, etc.) ● Leisure interests
TECHNOLOGICAL FACTORS: Technology is quick upsetting different ventures no matter how you look at it. The transportation industry is a decent case to show this point. In the course of the most recent 5 years, the business has been changing truly quick, not by any means offering the opportunity to the setup players to adapt to the changes. The taxi industry is currently overwhelmed by players like Uber and Lyft. The vehicle industry is quick pushing toward robotization driven by innovation firm, for example, Google and assembling are upset by Tesla, which has expressed an electronic vehicle insurgency. A firm ought not exclusively to do technology analysis of the business yet additionally the speed at which innovation disturbs that industry. Slow speed will give additional time while quick speed of mechanical interruption may give a firm brief period to adapt and be gainful. Innovation and Technology analysis includes understanding the accompanying effects - ● Recent technological developments by ICICI Bank Limited competitors ● Technology's impact on product offering ● Impact on cost structure in the Money Center Banks industry ● Impact on value chain structure in the Financial sector ● Rate of technological diffusion
ENVIRONMENT ANALYSIS: Before entering new markets or beginning another business in the existing business sector the firm ought to deliberately assess the natural guidelines that are required to work in those business sectors. A portion of the ecological components that a firm ought to consider already are - ● Weather ● Climate change ● Laws regulating environment pollution ● Air and water pollution regulations in the Money Center Banks industry ● Recycling ● Waste management in the Financial sector ● Attitudes toward “green” or ecological products ● Endangered species ● Attitudes toward and support for renewable energy
LEGAL FACTORS: In a number of nations, the legitimate system and establishments are not strong enough to secure the protected innovation privileges of an association. A firm ought to deliberately assess before entering such advertises as it can prompt burglary of association's mystery sauce along these lines the generally focused edge. A portion of the lawful elements that ICICI Bank Limited authority ought to consider while entering another market are - ● Anti-trust law in the Money Center 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
MICHAEL PORTER FIVE FORCES: Porter Five Forces is an all-encompassing technique system that removed key choice from simply investigating the present challenge. Porters Five Forces centers around - how ICICI Bank Limited can assemble a manageable upper hand in the Money Center Banks industry. Administrators at ICICI Bank Limited can not just utilize Porter Five Forces to build up a key position within the Money Center Banks industry yet additionally can investigate beneficial opportunities in the entire Financial division. Threat of New Entrants: New incumbents in Money Center Banks brings disruption, new ways of processing things and put pressure on ICICI Bank Limited through lower pricing strategy, reducing costs, and providing new value propositions to the customers. ICICI Bank Limited has to manage all these challenges and build effective barriers to safeguard its competitive edge.
TACKLING STRATEGIES: ● By enhancing new items and administrations. New items carry new clients to the crease as well as give old client motivation to purchase ICICI Bank Limited 's items.
● By structure economies of scale with the goal that it can bring down the fixed expense per unit.
● Building limits and burning through cash on innovative work. New participants are more averse to enter a unique industry where the built-up players, for example, ICICI Bank Limited continue characterizing the benchmarks normally. It essentially diminishes the window of remarkable benefits for the new firms along these lines debilitates new players in the business.
Bargaining Power of Suppliers: All most all the companies in the Banking industry buy their raw material from numerous suppliers. Suppliers, in a dominant position, can decrease the margins ICICI Bank Limited can earn in the market. Powerful suppliers in the Financial sector use their negotiating power to extract higher prices from the firms in the banking field. The overall impact of higher supplier bargaining power is that it lowers the overall profitability of Money Center Banks.
How ICICI Bank Limited can tackle Bargaining Power of the Suppliers:
● By building efficient supply chain with multiple suppliers. ● By experimenting with product designs using different materials so that if the prices go up of one raw material then company can shift to another. ● Developing dedicated suppliers whose business depends upon the firm. One of the lessons ICICI Bank Limited can learn from Wal-Mart and Nike is how these companies developed third party manufacturers whose business solely depends on them thus creating a scenario where these third party manufacturers have significantly less bargaining power compare to Wal-Mart and Nike.
Bargaining Power of Buyers: Buyers are often a demanding lot. They want to buy the best offerings available by paying the minimum price as possible. This put pressure on ICICI Bank Limited profitability in the long run. The smaller and more powerful the customer base is of ICICI Bank Limited the higher the bargaining power of the customers and the higher their ability to seek increasing discounts and offers.
How ICICI Bank Limited can tackle the Bargaining Power of Buyers
● By building a large base of customers. This will be helpful in two ways. It will reduce the bargaining power of the buyers plus it will provide an opportunity for the firm to streamline its sales and production process. ● By rapidly innovating new products. Customers often seek discounts and offerings on established products so if ICICI Bank Limited keeps on coming up with new products then it can limit the bargaining power of buyers. ● New products will also reduce the defection of existing customers of ICICI Bank Limited to its competitors.
Threats of Substitute Product and Services: When a new product or service meets a similar customer needs in different ways, industry profitability suffers. For example services like Dropbox and Google Drive are a substitute for storage hardware drives. The threat of a substitute product or service is high if it offers a value proposition that is uniquely different from present offerings of the industry.
How ICICI Bank Limited can tackle the Treat of Substitute Products / Services
● By being service oriented rather than just product oriented. ● By understanding the core need of the customer rather than what the customer is buying. ● By increasing the switching cost for the customers.
Business and Corporate Strategies of the organisation (including International, M & A, etc) :
Business Level Strategy :
1. Horizontal Mergers : ICICI has been keep consolidating partial fragmented banking industry. They have been struggling with competitors to get more market share and, ultimately, profit margins. This has led many mergers and acquisitions, domestically and abroad, by ICICI bank. Some of them are:
1996: SCICI Ltd. A diversified financial institution with headquarters in Mumbai
1997: ITC Classic Finance. Incorporated in 1986, ITC Classic was a non-bank financial firm that eng aged in hire, purchase, and leasing operations. At the time of being acquired, ITC Classic had eight offices, 26 outlets, and 700 brokers. 1998: Anagram Finance. Anagram had built up a network of some 50 branches in Gujarat, Rajastha n, and Maharashtra that were primarily engaged in retail financing of cars and trucks. It also had some 250,000 depositors
2001: Bank of Madurai
2002: The Darjeeling and Shimla branches of Grindlays Bank
2005: Investitsionno-Kreditny Bank (IKB), a Russian bank
2007: Sangli Bank. Sangli Bank was a private sector unlisted bank, founded in 1916, and 30% ow ned by the Bahte family. Its headquarters were in Sangli in Maharashtra, and it had 198 branches. It had 158 in Maharashtra and 31 in Karnataka, and others in Gujarat, Andhra Pradesh, Tamil Nadu, Goa, and Delhi. Its branches were relatively evenly split between metropolitan areas and rural or semi-urban areas.
2010: The Bank of Rajasthan (BOR) was acquired by the ICICI Bank in 2010 for INR 30 billion.
1. CHAINING : ICICI Bank has opened branches (chain of nationwide banks) at most of the cities i n India. To attract NRI customers, it has branches at prominent international locations. It also has regional offices that maximized responsiveness to the need of regional branches and customers. 2. USING INFORMATION TECHNOLOGY AND INTERNET :ICICI bank has always been differentiating its product by integrating Internet into its solution and business models. They have purchased Finacle Core Banking Solution from Infosys, which provide one stop solution for all banking related services. ICICI came up with mobile portal iMobile long back when internet penetration on mobile devices was not commonly seen. They have partnered with many other government and private organizations to provide banking solution to their customer base. One such example is providing Indian Railway ticket over mobile to those who have IRCTC account and ICICI bank account. 3. ICICI POSITION IN OVERALL INDIAN BANKING SECTOR : Indian banking sector has been through a transformation after 1991 liberalization. In dian banking industry which was highly segmented and dominated by public sector banks, took a sharp turn after post reform. Indian banking sector was opened up for various sub sectors. Also various private sector banks were introduced and they became integral part of Indian Banking industry. Today it is full of diversified financial group.
CORPORATE LEVEL STRATEGY : ICICI bank has a global distribution capability. It focuses on risk diversification and return optimiza tion of the assets and resources. ICICI bank has diversified its business into many fields.
1. DOMESTIC RETAIL BANKING: The bank intends to enhance the share of retail deposits and sustain leadership position in cre dit franchise. 2. GLOBAL CORPORATE AND INVESTMENT BANKING: Through global banking ICICI wants to leverage corporate relationships, structure expertise, balance sheet and global syndication capability. 3. INTERNATIONAL BANKING : It wants to leverage NRI opportunity and technology capabilities. 4. RURAL BANKING : This is an investment for future growth by tapping into rural areas. 5. INSURANCE AND ASSET MANAGEMENT : The bank wants to enhance and leverage market leadership position. These are the various ty pes of banking that ICICI bank do. Apart from this it also offers various products and services for different customer requirement and reduces its risk. The products and services are: 1. Personal banking
2. Global private clients
3. Corporate banking
4. Business banking
5. NRI banking
6. Life insurance
7. General insurance
8. Securities
9. Mutual fund
10. Private equity practice
6. BOSTON CONSULTANCY GROUP (BCG) MATRIX :
ICICI INTO INTERNATIONAL MARKETS :
ICICI Bank in Canada reveals that a transnational strategy coupled with an ethnocentric staffing policy allows the parent firm to retain control, while the choice of a subsidiary as an entry mode allows for local responsiveness.
In order to achieve growth, the Board of ICICI Bank decided to expand into international markets. The Board of ICICI Bank asked Lalita Gupte to lead the internationalization process. Subsequently, Bhargav Dasgupta was invited to join Gupte to build the international banking business of ICICI Bank. The management team of international business deliberated on the international strategy of the firm.
● It looked into the existing model, where the bank followed its customers, whether corporate or retail. ● It looked into the alternative modes of servicing the customers based in different parts of the world. ● It evaluated on how to leverage its banking and business network to expand in the international markets. ICICI as an organization is divided into six major product divisions like:
● Retail Banking ● International Banking ● Rural ● Micro-Banking and Agri-Business ● Government Banking ● Corporate Centre
The company identified international banking as a key opportunity, aiming to cater to the cross-border needs of clients and leveraging the domestic banking strengths to offer products internationally.
Acquisition & Mergers Of ICICI Bank : Acquisitions means to acquire/purchase any other firm. When a big company acquires a smaller company then it is known as acquisitions. There could be various reasons for an acquisition like entering into new market, reducing the level of competition, to reduce the overall cost of supply chain etc. ICICI Bank has also acquired some firms and the acquisitions with the year in these acquisitions happened are mentioned below:-
1996: SCICI Ltd. A diversified financial institution with headquarters in Mumbai
1997: ITC Classic Finance. Incorporated in 1986, ITC Classic was a non-bank financial firm that engaged in hire & purchase, and leasing operations. At the time of being acquired, ITC Classic had eight offices, 26 outlets, and 700 brokers.
1998: Anagram Finance. Anagram had built up a network of some 50 branches in Gujarat, Rajasthan, and Maharashtra that were primarily engaged in retail financing of cars and trucks. It also had some 250,000 depositors.
2001: Bank of Madurai 2002: The Darjeeling and Shimla branches of Grindlays Bank
2005: Investitsionno-Kreditny Bank (IKB), a Russian bank
2007: Sangli Bank. Sangli Bank was a private sector unlisted bank, founded in 1916, and 30% owned b y the Bahte family. Its headquarters were in Sangli in Maharashtra, and it had 198 branches. It had 158 in Maharashtra and 31 in Karnataka, and others in Gujarat, Andhra Pradesh, Tamil Nadu, Goa, and Delhi. Its branches were relatively evenly split between metropolitan areas and rural or semi-urban areas.
2010: The Bank of Rajasthan (BOR) was acquired by the ICICI Bank in 2010 for 3,000crores. RBI was crit ical of BOR's promoters not reducing their holdings in the company. BOR has since been merged with ICICI Bank.
Subsidiaries Of ICICI :
Domestic International
ICICI Securities Limited ICICI Bank UK Plc
ICICI Prudential Life Insurance ICICI Bank Canada
ICICI Lombard General Insurance ICICI Bank Eurasia Limited Liability Co Ltd Co
ICICI Prudential Asset Management ICICI Securities Holding Inc Co Ltd
ICICI Prudential Trust Ltd ICICI Securities Inc
ICICI Venture Funds Management ICICI International Limited Co Ltd ICICI Home Finance Company Ltd
ICICI Investment Management Company Ltd.
ICICI Trusteeship Services Ltd
Stakeholder Mapping :
The stakeholders of ICICI Bank can be categorised as:
1. Dormant Stakeholder: The dormant stakeholder of ICICI are its community members, who have minimum interact io n with the firm, and lack urgency and immediate attention. But they also have enough power,as they have an influence in the brand value and reputation of the company. 2. Demanding Stakeholder: These stakeholders are in form of aggrieved customers, whose claims are treated on urg e nt basis. 3. Dominant Stakeholders: These are in the form of anti-globalist, capitalists and business customers, who hold strong po w er, enough to influence decision making of the firm. 4. Dangerous Stakeholders:These stakeholders are in the form of competitors in the banking and investing part of IC ICI. They both have legitimacy as well as urgency, but low power influence. 5. Definitive stakeholders:These occur in the form of executive board, its shareholders, governments, media, and analyst which possess, power, influence as well as legitimacy.
MAPPING MODEL OF ICICI BANK
Indicative Culture:
1. Work Environment: ICICI bank’s work environment fosters growth and learning of an individual. This helps ind i vidual to fulfilling both the individual and organizational aspirations. ICICI bank tries to conduct business which refleects its values and results to maximize values to stockholder. This approach benefits both organization, stakeholders and community. Personal growth of an individual and balancing work life balance is one of the main agenda. 2. Performance Driven Culture: ICICI bank commits to create inclusive organization where everyone can succeed based on merit. 3. Learning & Development: L&D practice at ICICI promotes professional to enhance their technical, function and softer aspects required to succeed. ICICI bank thrive by imparting skills and knowledge through various training interventions to enhance personal & team effectiveness.
Competing on Valuable Resources : Every bank has a collection of physical and intangible assets and capabilities that it has developed ov er a period. ICICI is having such unique stock of resources for its competitive advantage. One of the ways in which a resource becomes inimitable is due to physical uniqueness. Physical location of a branch of bank in the heart of the financial centre of any city is a unique resource that cannot be replicated. Another example of an inimitable resource is a strong Brand name. Even if a competitor spends billions of rupees, it will find it difficult to acquire the trust and brand equity that customers associate with.
Scarcity: For the resource to be valuable, it should be scarce or rare. A prime example of such resources is the Human Resources. For a service industry such as banking where human resources form a significant source of value addition, possession of excellent quality work force generates a key competitive advantage.
● ICICI WEB TRADE is having such skilled human resources. ● ICICI WEB TRADE see itself a very strong player of the market. As per Mr. N VAGHUL, the chairperson, the financial sector will play a crucial role in India‘s potential. ● Mobilizing resources from households and canalizing these resources into areas identified as development priorities was the main strategy ICICI adopted. Because of their powerful resources of technology as well as human resource, they can compete in this global era. ● As far as marketing is concern, with ICICI Bank, we all know that how aggressively the marketing activity of ICICI has done. Through different advertisements, through a very strong background of technology and innovative product line. ● ICICI WEB TRADE is having separate Marketing Division enriched with marketing experts. As far as ICICIdirect.com is concern, the Regional Product Manager takes all the decisions or in other word, you can say a branch head is the key person how to do different activities regarding marketing. ● The main product of ICICI WEB TRADE is an online account, and the unit is having number of executives with proper training. These persons go in field and demonstrate the product.
HR Capabilities Of ICICI Bank :
Internal Recruitment :
● Managerial roles- Trace out the performances of the existing employees and conduct a review of the selection process. ● More than 10 CEO and board level positions filled only by internal staff.\ ● Horizontal growth.
External Recruitment :
● ICICI- Souring from manpower suppliers ,conducting interviews at university campuses. ● ICICI often conducts walk in interviews a time and cost saving method. ● It had also tied up with few online portal where they can post the job requirement at a regular basis. ● Apart from these ICICI also pull out candidates from various sources like, media and communication, advertisement, exetra.
HR Policies Of ICICI Bank - Banking On Care :
● Maternity leave ● Leave for child care ● Fertility leave ● Adoptive leave ● Part time employment for women ● Paid leave for travel/study or other reasons ● Transfer request ● Financial Capabilities Of ICICI Bank : ● Finance is the life blood of any Organisation, just as circulation ● of blood is essential for human life in the same way finance is ● important for any organisation. And when it comes to banks ● finance play enormously vital role because it need finance to ● provide finance to one who need finance.
ICICI BANK FINANCIAL ANALYSIS: There are many parameters used for analysing the financial status of a business and for assessment of th e liquidity, solvency ,stability and profitability of a business.
● DPS ● EPS ● P/E ● Assets turn over ratio ● Quick ratio ● Current ratio ● CASA ratio etc