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HDFC- The Extraordinaryordinary Company.
case -19
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HDFC- Overview
Established in 1977 by Mr. Hasmukhbhai Parekh
Promoted with an initial share capital of Rs 100 million.
HDFC is Indias premier housing finance entity in
existence for over 34 years. Primary objectives of HDFC
To cater social need- promoting home ownership byproviding long term finance.
To enhance residential housing stock in the country.
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Though housing remains the core business, HDFChas continued to make investments in its subsidiaryand associate companies.
Competitors
ICICI Housing Finance
State Bank of India Home Finance
Housing Urban Development Corporation(HUDCO)
LIC Housing Finance Limited
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SWOT Analysis
Strengths :
oVast distribution network.
o Great brand image.
o High degree of customer satisfaction.oWidest range of home loans and deposits products.
o Efficient and effective service.
o Beside the core business , HDFC has continued tomake investment in its subsidiary and associatecompanies.
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Weaknesses :
o Customer service staff need training.
o Interest rate war persistent
o Strict policy of funding.o Unable to cover rural areas.
o Unable to attract large number of middle income
house holds.
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Opportunities :
o Untapped rural markets.
o Strong economic growth .
o Lower SLR and CRR with enhance liquidity, so moreloans can be offered.
o Tax rebate on house loan.
o
Rising disposable income.
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Threats :
o Loss of market share to commercial banks andHFCs.
o Residential real estate prices in a few pockets of thecountry had risen to unrealistic levels.
o High switching cost of customers.
o Increase in funding cost.
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MarketingStrategy- STP
Segmentation :Demographics variables: Metros Other cities Rural NRIsOccupation : Salaried person Self employedPsychographic segmentation Lifestyle -People who believes in modern banking with higher set of service i.
e. internet banking (incontact, mobile refill, travel currency cardetc.)
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Target market:
o Middle income group
o Rural areas
o NRIso Corporate
oAssets and security market
o General and life insurance
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Positioning :
o Corporation that puts the customer first.
o AAA rating by CRISIL and ICRA.
o High standard serviceso Tagline with you right through make its presence
felt..
-Customer centric -Service oriented
-Product innovation
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Home loan advantages:
o Counselling and advisory services
o Instant home loan approval
o Loan approval even before the property is selectedo Flexible repayment option
o Online application facility
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Marketing Tactics- 4Ps
Product :
Home improvement loans
Home extension loans
Short term bridging loan
Loan for professionals (non residential premises)
Land purchase loan
Top- Up Loans
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Price :o Depends on rate charged by RBI and interest charge by
competitor.
o HDFC also provides its customer the choice of fixed rate
home loans, fixed first home loan and adjustable rate homeloans
Fixed rate
Adjustable rate home loanlinked with HDFCs Prime Lending Rate
Fixed first home loans
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No Charges for
o Replacement of cheques
o Income Tax Certificates
o Accelerated Repayment Option
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Place :
o 304 outlets
o Has an international office in Dubai , London and
Singapore.o Spread over 2400 towns and cities.
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Promotion :
Tagline with you right through make its presencefelt..
HDFC also advertise them self through :* T.V.
* News papers.
* Hoardings on the road side and in public places.
Property fairs
Cross-selling
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Repayment option :
o Step up Repayment facility
o Flexible loan installment plano Tranche based EMI
oAccelerated repayment scheme
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HDFC
Home Loans
HomeImprovement
Loans
HomeExtension
Loans
Short Term
Bridging Loans
Land PurchaseLoans
Loan toProfessional
NRPs
Top Up Loans
Home Loansfor NRIs
Home Loans
HomeExtension
Loans
HomeImprovement
Loans
Land PurchaseLoans
Rural HousingFinance
Loan AgainstProperty
Deposits
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Problem company facing:
o Inefficient Customer Service Staff
o Interest rate war persistent
o Less customers in rural area.o Customer inslovency
o Employees switching
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Recommendation :
o Training of Customer Service Staff.
o Need for an independent floating rate benchmark
o Trained and dedicated personnelo Loan should be given after acquiring information
about the customer
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