PADMASHREE DR. D. Y.

PATIL UNIVERSITY DEPARTMENT OF BUSINESS MANAGEMENT

STRATEGIC

MANAGEMENT & BUSINESS POLICY WITH REFERENCE TO STATE BANK OF INDIA

 PRASHANT

KADAM PRABHAVATI SWAMY AKSHATA TAVHARE SOUMITRA IYER AKASH SINGH THAKUR SHANKAR KHANDE KUNAL RATHOD

01 07 08 10 18 19 20

State Bank of India (SBI) is the largest nationalized commercial bank in India in terms of assets, number of branches, deposits, profits and workforce. With the liberalization of the Indian banking industry in the mid1990s, SBI faced stiff competition from the private sector and foreign banks which resulted in significant loss of its market share. The case describes the efforts of SBI to regain its lost market share by undergoing a major restructuring exercise which involved redesigning its branch network, providing alternate banking channels, emphasis on lean structure and technology up gradation. The case also discusses how SBI is building its image as a customer friendly bank by launching innovative products & services and promoting its brand.

MISSION To retain the banks position as the premier Indian financial services. and aims to be a group with world class standards and significant global business commitments to excellence in customer, shareholder and employee satisfaction so as to play a leading role in expanding and diversifying financial services while continuing emphasis on its development banking role. VISSION To be a premier Indian financial services group with global perspective, world class standard of the efficiency and professionalism and also its core institutional values, To retain its position in the country as a pioneer in developing countries, It also aims to maximize its shareholders value through high sustained earnings per share.

Excellence in customer service Profit orientation Belonging & commitment to bank Fairness in all dealings & relations Risk taking & innovation Team playing Learning & renewal Integrity Transparency & discipline in policies & systems

Institutions for advanced learning Internal consultant or change agent Feedback supplier research & development role Overlapping staff training centers

1991
Maintaining profitability

2015
Service quality

Credit portfolio management

Service quality Regional economy

Maintaining profitability
Market customer /focus Operations systems management

Cost management and expenses Credit portfolio management reduction Declining Earnings/ more failures Investments to stay competitive

Institution for advanced learning: to provide state of the art training in financial products to middle level and senior level executives. Internal consultant/change agent: to act as a catalyst for change in attitudes and orientation of banking staff and to provide expertise and consultative support.
Feedback supplier: to capture and structure feedback from trainees and from the market.

Think tank: to provide expert and inform suggestions, model business strategies, analysis of market developments from a banker perspective. Research and development role: to carry out research on contemporary subjects that are relevant to the banks short term and medium term and operational needs and policy formulation.
Overlapping staff training canters: to validate and closely monitor the staff training canters in seven circles attached to the academy.

SBI carried out various marketing initiatives to enhance its reach. They included,

Segregating customers

and

targeting

existing

high

value

Cross sales of other products Setting up call centres and outbound sales force to secure new customers. Plans were also made to utilize database marketing to pursue large and medium sized corporate, government and trade finance customers.

Database marketing was expected to draw increased revenue from cross selling, lower costs and increased customer loyalty.
SBI also introduced various other ways of reaching out to customers like extension of hours of work(SBI increased daily working hours by two hours and Sunday banking was introduced) Aggressive marketing through print and television media.

Strength Brand name Wide distribution network Market leader High market capitalization & profits
Weakness The existing hierarchical management structure of the bank, although strength in some respects, is a barrier to change. Modernization: SBI lags with respect to private players in terms of modernization its processes, infrastructure, centralization. Delay in technology up gradation could result in loss of market shares.

Opportunities Expansion More deposits Strong economic growth Mergers with other banks Threats Change in government policies Changing policies of RBI Competition of MNC banks

 Threat

of competitors: Top Performing Public Sector Banks 1. Andhra Bank 2. Allahabad Bank 3. Punjab National Bank
Top Performing Private Sector Banks 1. HDFC Bank 2. ICICI Bank 3. AXIS Bank 4. Kotak Mahindra Bank

Threat of new entrants: there have been entrants in banking sector like yes bank.

many new

Threat of substitutes: investors as a substitute can always invest into the capital markets instead of depositing in their capital in the bank. Buying power of suppliers: changing policies and guidelines of RBI, interest rates, CRR and SLR maintained by the banks as per RBI norms. Buying power of customers: changing scenarios, increasing and decreasing disposable incomes, other attractive options available to customers.

There is a lot of growth potential for the banking indust ry because of increasingdisposable income of customer s, increasing working class, more volatility in other ma rkets also increasing importance of savings and in this banking industry SBI has shown a growth rate of 13% with a 21 % increase Hence it can be concluded that SBI stands at cash cow in BCG matrix.