INDUSTRY
HDFC (Housing Development Finance Corporation Ltd.), first bank to obtain an ‘in
principle’ assent from the RBI to set up a bank in the private sector, as part of RBI’s
liberalisation of the Indian Banking Industry in 1994.
HDFC Bank commenced its operation as Scheduled Commercial Bank in January 1995.
HDFC is one of the leading housing finance company of India & it holds an ideal track
record in India as well as in international markets. It is the leading private sector bank
in India as of 2020 with a market capitalization of over 5.8 trillion Indian Rupees. HDFC
has won ‘Asiamoney Best Bank Award 2020’.
MISSION
HDFC Bank’s mission is to be a ‘World Class Bank’. And its business philosophy is based
on five core Values: Customer Focus, Operational Excellence, Product Leadership,
People & Sustainability.
VISION
HDFC’s Vision is be a World Class Bank and they have always tried to bring about
meaningful change in the society, and they are doing this by adopting technology to
power digital transformation in banking, focusing on semi-urban and rural areas to
drive high growth, and creating sustainability in far-flung areas across India. They
introduced technology led banking & it was one of the first bank to offer Net-Banking
services, 10-sec personal loan, App Banking and now WhatsApp Banking.
OBJECTIVE
Deliver superior experience and greater convenience to customers.
Increase market share in India’s expanding banking and financial service industry.
Expand geographical reach.
Cross-sell the broad financial product portfolio.
Sustain strong asset quality through disciplined credit risk management.
Maintain low cost of funds.
PORTER’s Five Forces Model
Porter’s five forces model helps to analyse that why different industries are able to
obtain different levels of Profitability. It is a type of External analysis. It is frequently
used to measure competition intensity, attractiveness and profitability of an industry.
It helps one to analyse who are their current competitors and also what kind of changes
are happening in an industry & what is their competitive position.
Bargaining
Power of
Suppliers
Threat of Bargaining
New Power of
Entrants Customers
Porter's 5
Forces
Threat of Competitive
Substitutes Rivalry
RISK
FIVE FORCES HIGH/MODERATE REMARKS
/LOW
Four major type of suppliers are;
Customer deposits, Mortgages & loans, Mortgage-
backed securities, loan from other financial
Bargaining Power of institutes.
Moderate
Suppliers Banks make sure they have these resources so that
they can meet their customers borrowing demands,
while maintaining enough capital to meet
withdrawal expectations.
As a large number of Banks are available in the
market today. Switching cost is low & also full
Bargaining Power of
Moderate knowledge of the banking industry is easily
Customers
available today over the internet so customers can
easily decide for themselves.
Competitive Rivalry High Private sector banks face highly competitive rivalry
from Public sector banks & also a major
competition by Co-operative banks as more than
50% of the rural credit is disbursed by them & they
come under NABARD’s regulation.
Earlier HDFC never dealt in Gold loans but as of
September 2020 it has launched Summer Treat
scheme for rural areas of the country which will
deal with Gold loan as well, given the current
pandemic scenario & also because they were facing
competition from Muthoot Finance Ltd &
Manappuram Finance as Gold price soared and
people in Rural areas were preferring gold loans.
For Depositors Substitutes can be investment in
Gold, Government Securities, Stock market, Mutual
Funds.
As HDFC wants to expand more in Rural area so it
Threat of Substitute Moderate
announced to provide summer offers for the Rural
areas of the as of September 2020. HDFC currently
has 1,158 banking outlets in Rural area which is
more than they have in Urban area.
RBI has made it mandatory for banks to have at
least one-third of their branches in under banked /
Low rural sectors. State Bank of India, Bank of Baroda,
& HDFC Bank & ICICI Banks will open about 14000-
Threat of New Entrants
Moderate (in case 15000 branches in unbanked/rural sector in FY21
of Rural areas) as per government directive. This will increase
threat for HDFC as other competitor banks will also
be operating in these rural areas.
