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Submitted to AADITYA SOOD

Sandeep Kumar Mohanty ROLL NO 1

PGDM 15- 17

Comprehensive market,enviourment &

situational analysis of sbi

I

INRODUCTION -

State Bank of India is a public corporation owned by the government of India. This multinational company deals exclusively in the financial and banking sector. SBI was founded in the year 1806 a multinational banking and financial services company based in India. State Bank OF India is India’s largest bank with total assets of US$388 billion and 17,000 branches, including 190 foreign offices, making it the largest banking and financial services company in India by assets SBI General's current geographical coverage extends to 38 cities pan India and plans are on to extend this reach to another 20-25 cities before the end of the current financial year

Strategic Evolution of SBI

Strategy can be defined as the periodic changes a business must introduce to its structure and operations in order to ensure continuity in the face of environmental changes. The strategic evolution of a business can thus be understood in terms of major social institutions such as the State, the market, community or civil society and their interrelationships that may have a bearing on its working and thereby the achievement of the principle objectives of its establishment. Historians recognize moments of profound change when the balance of power or influence shifts between these institutions. The SBI is a dynamic organization and has been continuously changing its form to adapt to its environment. Here, its three key environmental factors:

• Ownership and governance

• Business processes

• Structures and systems

MISSION -

To be a world class standard provider in buisness commitments with exellence to customers,shareholders and employees

To diversify its financial services while continuing its efforts in banking role

competitor banks of SBI are as follows –

Punjab National Bank

HDFC Bank

ICICI Bank

Axis Bank

Central Bank of India

Product in the Marketing mix  

Cards – The products in this category include Travelling cards,Debit cards and Credit cards etc,

Consumer banking – This includes special type of accounts for specific type of costumers likefor teenagers, accounts for senior citizens etc

Loans – This category includes all kinds of loans from study loan to medical loan and loans against securities

General insurance – According to the scheme launched by our prime minister ,every citizen who will open his account is liable for a general insurance of INR one lakh from the bank.under jandhan yojna

MOBILE BANKING -With SBI Bank, banking is no longer what it used to be. SBI Bank offers Mobile Banking facility to all its Bank, Credit Card and Demat customers. SBI Bank Mobile Banking enables you to bank while being on the move

Place in the Marketing mix 

The place is the most important factor and State Bank of India has opened nearly 43,515 ATMs in country. The distribution channels are fully equipped with latest infrastructure, technology with modern facilities and ATM and the branches are installed at places that are convenient to both the banker and the customer. The concept of internet banking through their residence and offices is also encouraged to save time.

Internationally, the bank has near about 190 overseas offices that extend over nearly thirty-four countries in cities like Dhaka, Tehran, Moscow, London, Maldives, Dubai, New York and many others. State Bank of India has opened various ATMs and branches for the convenience of its customers. The places are chosen with great care so that security would not be a problem.

Promotion mix

In order to promote the banking facilities & its facilities proper strategies are used and implemented like:

• Advertising: Television, radio, movies, theatres,,

•Print media: hoardings, pamphletsand newspaper, magazines

• Sales promotion: gifts, discount, incentives, etc,,

Advertisements focus on the modernization of banks and its branches and the many facilities provided by them.The main motive of promotion is that the clients become impressed and they are attracted to the services of this bank.Under the promotional strategy, ads are created with famous personalities making them brand abbasadors. The bank also provides incentives to its staff so that better work environment is established.

Price

State Bank of India offers a many types of financial services to loyal customers. It has very clear-cut pricing policy and they are in a competitive marketplace so it has a policy which includes creative efforts at each level. Hence it can be said that State bank uses competitive pricing. Also we know that the pricing of SBI is determined by many of government policies.The bank’s various strategies are made keeping in mind and examining the customer’s mindset and economic changes that are occuring around the market. State Bank of India’s pricing policy is very customer friendly. It gives many opportunities to the customers via its flexible policies like operating the home loan account in either current account mode or savings account mode. 75% of their funds are accessible at any given time.The pricing policies and decisions are made on the rate of interest that are continuously regulated by the Reserve bank of India

SWOT analysis:

Strengths:

Brand name: SBI Bank has earned a reputation in the market over the period of time(it is the oldest bank in India since 1806)

Wide Distribution Network: Excellent penetration in the country with more than 10000 core branches and more than 5100 branches of associate banks

Government Owned: Government owns 60% stake in SBI. This gives SBI an edge over private banks in terms of customer security

Weaknesses:

The existing hierarchical management structure of the bank, although strength in some respects, is a barrier to change

Still carries the image of the old Govt. sector bank

SBI has the largest number of employees in banking sector, hence the bank spends a considerable amount of its income in employee’s salary compensation

Though SBI is occupying the 2nd position in the credit card industry, it has the highest non-performing assets in the industry, which stand out to be at 16.28 % (Dec 2014)

Opportunities:

Increasing trade and business relations and a large number of expatriate populations offers a great opportunity to expand on foreign soil

Expansion into rural areas will help expand is network mre and attract more numbers of customers Micro Finance: there is a lot of growth opportunity in the area of micro finance

Threats:

The changing interest rates & also the changing policies of RBI. Slow down in the domestic economy will raise a concern over credit off-take thereby Impacting earnings growth FDI allowed in banking sector is now increased, this can be a major threat to SBI as people tend to switch to foreign banks

for better facilities and technologies in banking Private banks have started entering and penitrating into the rural and semi-urban sector, which used to be the main area of the

State Bank and other PSU banks

Porters five forces theory:

1. Threat of competitors:

Top Performing Public Sector Banks

a. Andhra Bank

b. Allahabad Bank

c. Punjab National Bank

d. Dena Bank

e. Vijaya Bank

Top Performing Foreign Banks

a. Citibank

b. Standard Chartered

c. HSBC Bank

d. ABN AMRO Bank

e. American Express

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

3. Threat of substitutes: investors as a substitute can always invest into the capital markets instead of depositing in their capital in the bank.

4. Buying power of suppliers: changing policies and guidelines of RBI, interest rates, CRR and SLR maintained by the banks as per RBI norms.

5. Buying power of customers: changing scenarios, increasing and decreasing disposable incomes, other attractive options available to customers

EXTERNAL ENVIRONMENT ANALYSIS

(PEST analysis )

Political

Political environment of any country always have effect on all the sectors of that country and banking is no exception. With good & stable political environment,banking sector is able to transfer funds more efficiently. One must note that the political instability of the country affect directly the banking sector in IndiaWeakness in Indian political system affects the economic flexibility. Bureaucracy, poor administration, coalition, and power hurts the resilience of India’s framework of policy-making.unstable politics leads to delayed decision making and implementations.Monetary policy of RBI has been restrictive over last couple of years with more intervention by RBI into money market. RBI has made many changes into repo and reverse repo rate to curb inflation and ease the pressure

Monetary policy Regulatory frame work Degulation of market

Economic

India's economic flexibility is damaged by its weak economic structure, with very low per capita GDP. However, this risk is partially covered with the growth percent that India has & with its characteristic of being a well-diversified economy.Indian

economy is getting into expansion mode combined with private sector growth. The Indian private sector has not yet fully taken the benefit of absolute credit growth ofvthis country. The increase in private sector credit has been very nominal over last few years.There is high credit risk in Indian banking sector owing to the not well developed legal framework that leads to delayed payments and lower recovery. As per S&P reviews on Indian Banking, Indian banking regulations are at par with world standards. RBI has taken noteworthy steps to ensure feasible risk-return ratio of banks

Regular change in rate of interest Complex nature of operations Consolidation of industry

SocialIndia has been on growth track and banking being an maor part of our economy it has to adjust itself so as to supplement the growth of indian economy. Despite all this growth, Indian rural part have largely deprived with the basic banking facility.where Farmers and small businessman have no other choice than to take loans from local vendors. Also The techcno type consumer provides opportunity as well as poses challenges in the banking system. The consumers are looking for electronic modes of fund transfer along with the personal touch and experience

Employment Demographics Working condition

Technological environment:

With the new changes in technology, banking has seen major changes in operations and has now focused on customer centric approach, mobile banking, ATMs, internet banking,core banking, ERP, etc. and improved efficiency and productivity. Banks are now focusing on cashless, paperless and hassle-free working. As per KPMG, non-cash payment comprised of 91% in value terms compared to 88% in 2013. Also, the payments made through cheques have also come downEstablishment of computers, internet connectivity, RTGS and NEFT, MICR Cheques, ECS ,OTP are all significant milestones in present. The continuous advancement in technology changed the way the bank interacts with consumer. Now, we have the virtual banking concept to roll out in market wherein the products or services are available only on electronic modes and these are competitively and attractively priced so as to invite customer to non-branch banking world, thereby reducing costs. With digitalization of transactions, wireless transfer of funds, paper less culture, etc. the banks have opportunity of improving the overall productivity, reduce cost and provide better customer service

PORTER’S 5 FORCE ANALYSIS

Competitor analysis

Thus we can clearly see sbi is leading and icici bank is traling

BCG theory: Cash Cow There is a lot of growth potential for the banking industry because of increasing disposable income of customers, increasing working class, more volatility in other markets also increasing importance of savings and in this banking industry SBI

has shown a growth rate of 13% with a 21 % increase in PAT standing to 62.1 cr in the FY 20013-14. Hence it can be concluded that SBI stands at cash cow in BCG matrix.

References-

http://www.researchandmarkets.com/

http://mywordsmyarticle.blogspot.com/

http://wikipedia.com

www.marketing91.com