strategy of growth

7/30/2019 Strategy of Growth

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STRATEGYDerives : Greek(strategia), command,

generalship.

Plan of action designed to achieve a

specific goal.Gaining a position of by best

possibilities.

Set of options ("strategic choices") thana fixed plan.


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NEED FOR GROWTH Survival Economies of Scale

Owners mandate

Expansion of the market Latest Technology

Prestige and Power

Government Policy

Self-sufficiency


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DISADVANTAGESFinanceMarket

Human relations problem

Management

Lack of knowledge

Social problems.


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STRATEGY OF GROWTHUSE THE CREDIT PROCESS TO IDENTIFY

OPPORTUNITIES. Information about business finances and operating

results are shared with banks as part of the creditprocess.

Banks store wealth of information to advise theirbusiness clients on strategies to improve the health oftheir businesses.

Loan officers can develop recommendations forstrategies, products and partners that enable to

improve business performance.


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PROVIDE ROBUST ONLINE INFORMATION AND

TRANSACTION CAPABILITIES.Online banking platforms be designed to

minimize the time spent on performing functions.Owners and financial managers to conduct avariety of more sophisticated transactions.

Access detailed account histories.Manage payments and move funds across

accounts.

Bankers need to arm themselves with betterproducts, customer management protocols andonline banking capabilities.


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CLIENT SEGMENTATION Segment lines of business and expanding the

businesses.

Some products developed for specific segments haveseen attractive levels of growth for example a virtual

wallet for the emerging affluent.

Done to sharpen features and pricing to have deeper

relationships.


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LIFECYCLE DEVELOPMENT This strategy requires providing continuity of client

experience, congruence of evaluation assumptionsand, importantly, consistency in advice, which pays offin client trust and loyalty.

Continuity and consistency of the wealth clientsexperience are being enhanced by increased

investment in offer management and optimizationcapabilities and infrastructure.


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INNOVATION FOR GROWTHA mutual fund store, selling solely mutual funds

through low-cost dedicated stores and advisors.

EFTs, index funds that trade throughout the day onexchanges and longevity insurance, allowing clients to

assure cash f low.

New mobile applications that provide research,

trading and funds transfer capabilities are pushing theenvelope on new distribution models.


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INTENSIVE GROWTH Market Penetration. - current product to its current customers.

Market Development. - current product to an adjacent market.

Alternative Channels. This growth strategy involves pursuingcustomers in a different way such as, for example, selling yourproducts online.

Product Development. - developing new products to sell to yourexisting customers as well as to new ones


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ACQUISITIONSThe bank with one bad purchase canbe acquired.

Acquisitions can be a massive source

of profit and a means to growth.


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DIVERSIFICATION

It is where the firm sells entirely newproducts to new customers in newmarkets.

The reasons for such a businessstrategy could be due to a rise inopportunity.


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IPO Initial public offering (IPO) refers to the company's first

equity issue made available to the public to raise newsource of funds.

If the firm decides to put up a sale of its stock and sellspart of their ownership to the public, it then engages in anIPO.


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JOINT VENTURE

Joining forces with another business.

Both parties need to benefit, and most joint ventures arecarried out by those businesses that offer

complementary services or products.

Joint ventures can give you access to new markets andcustomers.


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TECHNOLOGY IMPROVEMENT

Credit Cards/Debit Cards

ATM

E-Cheques EFT (Electronic Funds Transfer)

DeMAT Accounts

Mobile Banking

Telephone Banking

Internet Banking

EDI (Electronic Data Interchange)


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NORMS BY GOVT. NPAS

Income Recognition

Asset Classification

Substandard Asset

Doubtful Asset

Loss Asset

Provisioning Norms


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PROVISIONING NORMSASSET % OF PROVISION

LOSS ASSETS 100 %

DOUBTFUL ASSETS

UNSECURED ASSETS 100%

SECURED ASSETS( DOUBTFULPERIOD)

UPTO ONE YEAR 25%

1-3 YEAR 40%

MORE THEN 3 YEAR 100%

SUBSTANDARD ASSETS 15 % ON TOTAL OUTSTANDING LOANS


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MARKET DISCIPLINEMarket discipline is a market-based promotion of

the transparency and disclosure of the risks

associated with a business or entity. It works inconcert with regulatory systems to increase the

safety and soundness of the market.

Transparency

Disclosure of critical information


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BENCHMARKING BY

INTERNATIONAL STANDARDSBenchmarking is the process of comparing

one's business processes and performance

metrics to industry bests or bestpractices from other industries. Dimensions

typically measured are quality, time and cost.


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UNIVERSAL BANKING

Universal banking is a combination of

Commercial banking,

Investment banking,

Development banking,

Insurance and many other financial activities.


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Functions

Merchant Banking

Mutual Funds

Factoring

Credit cards

Housing Finance

Auto loans

Retail loans

Insurance.


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SUPERVISION & REGULATIONS

Monitoring and examining the condition of bank

Their compliance with laws and regulations.

Bank regulation includes issuing specific regulations andguidelines to govern the operations, activities and

acquisitions of banking organizations.


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HRD IN BANKING Human resource development is a process through which

employees in an organization are assisted to realize their

full potential for their present and future jobs.

It involves long term perspective which visualizes change

through involvement and ownership of such change by the

participants.


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OTHER STRATEGIES Improve Income

Grow by expansion

Grow by partnership

Improve Efficiency

Optimize Allocation of Capital

Reducing non profit assets


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strategy of growth

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