CHAPTER-1

CHAPTER-1INTRODUCTION OF GROWTH & EXPANSION STRETAGY

MEANING: The growth strategy is also called as expansion strategy. when a firm aims at substantial growth, it adopts growth strategy. according to William glueck a growth strategy is one that an enterprise pursues when it increase its level of objectives upward in significant increment, much higher then an exploration of its past achievement level. The most frequent increase indicating a growth strategy is to raise the market share and or sales objectives upward significantly. the growth strategy aims at higher objectives then before such as substantial increase in market share and/or increase in sale targets.

In order to achieve higher targets then before, a firm may enter into new markets, introduce new product lines, serve additional market segment and so on. this strategy involves greater effort and risk as compared to stability strategy. DEFINATION:Strategy aimed at winning larger market share, even at the expense of short-term earnings. Four broad growth strategies are diversification, product development, market penetration, and market development.

Growth strategy in which resources of a firm are focused on a well-defined market niche or population segment. See also differentiated marketing and undifferentiated marketing.BENIFITES OF GROWTH STRATEGYA business growth strategy starts with market insights. The source of insights lies within and across your market ecosystem. While research firms and strategic marketing consultants can bring these insights to bear on an ad-hoc basis, companies committed to growth will serve themselves well by developing systems and processes to ensure a continuous flow of market insights into their business. This is a key strategy for developing the demand side of your business

Business growth strategies are unique in every business. However there are broad categories of strategies for business growth:

New Product/Service Strategy Development

Market Expansion Strategy

Product Diversification Strategy

Market Opportunity Analysis

Competitive Market Analysis

Market Segmentation Strategy

New Product/Service Strategy Development

Perhaps the most obvious source of growth or revenue maintenance is the development of new offerings to your existing customer base. Staying close to emerging customer requirements is straight forward when there is good communication from sales and support teams. Keeping customers involved in reviewing product roadmaps and helping to prioritize features as well as confirming value and appeal are keys to the process.

Market Expansion Strategy

Learning how to expand your target markets whether by customer type or geographic location is often the linchpin for sustained growth. This requires a synchronization of operational capabilities and marketing to assure the market expansion strategy is viable and can actually be implemented. New market knowledge is critical to success, and consists of developing insights from target customers, assessing relevance and appeal versus competitive offerings, understanding the sales process and other offering delivery requirements. Maintaining clarity of the strategy just across the executive team, let alone the company, can be a huge task when the expansion strategy requires the company to reposition itself.

Product Diversification Strategy

Diversifying your product portfolio can lead to expanding your share of wallet with your customer base, as well as make your offerings appeal to a broader market base. The key is tying product development resources (engineering, product management, etc.) to real customer requirements and maintaining the customers perspectives of wants, needs and usages throughout the development process. Alpha and beta testing with customers is essential before finalizing go-to-market plans.

Market Opportunity Analysis

Related to a market expansion strategy as well as product diversification, a market opportunity analysis can be used to flesh out potential ideas. The very notion suggests that a company is more interested in a market perspective than its own often-assumptive perspective. The scope of such analysis can range from straight forward and short-term, to expansive and longer term. An initial sense of whats at stake may call for patience in conducting the more comprehensive study. Or, competitive pressures may drive a company to quickly complete its assessment. The outcome should include: target markets (by type and geography), current solutions assessments (how problems are being solved today), an extrapolation of solutions scenarios (often driven by forecasting the impact of technology and other economic drivers).

Competitive Market Analysis

In a crowded market (some refer to this as a red ocean), competitive intelligence is critical to both operational and strategic decision making. A rigorous and regular approach to competitive position, direction, and strengths and weaknesses can help senior executives identify gaps and opportunities. The implications and usages for such learnings can be highly strategic (what new markets or segments should be pursued) to very tactical (what messaging will better position our offerings in our on-going promotional activity.

Market Segmentation Strategy

Segmenting markets, targets and opportunities can yield greater clarity and more specific relevance for a company and its offerings. In some cases the same product can be repositioned to be made more relevant to a segment. In other cases, a solid market segmentation strategy will help justify new market entries and product development. This activity always leads to greater insights and clarity for how a company can serve its current and potential markets

TYPES OF GROWTH STRETAGY

The growth strategy further classified into: Internal Growth strategies, which include diversification strategy and intensification strategy.

External growth strategies, which include mergers, actuations, amalgamation and joint ventures. INTERNAL STRATEGYInternal Growth strategies relate to the following actions:

Designing and Developing new products/services

Building on existing products/service for new opportunities

Increase sales of products/ service through better market reach

Expanding existing product lines and service offering

Reaching out for new markets

Expansion into foreign marketMARKET EXPANSION GRID:

MARKET PENITRATIONIncrease sale through effective through effective marketing strategy within current market target.

1. To maintain or grow the market share of the current product range.2. Become dominate player in the growth market.3. Drive out competitors.4. Increase the usage of companys products by its current customer.

MARKET DEVLOPMENT1. Expand sales in new market through expanding geographic representation.

2. An originations current products can be changed improved and marketed to the existing market.

3. The product can also be targeted to another customer segment. Either way, both strategies can lead to additional earnings for business.

PRODUCT DEVLOPMENT1. Increase sale through new product and services

2. An organision that already has market for its product might try and follow a strategy of developing additional products, aimed at its current market.

3. Even if new products are need not be new to the market, they remain new to the business.

DIVERSIFICATION1. Diversification strategy is the development of new product in new market. it is adopted by the company if the current market is saturated due to which revenue profit is lower. it is two types 1) synergistic 2) conglomerate EXTERNAL STRATEGY MERGERThe combining of two or more companies. In merger two companies agree to move ahead and exist as a single new company.

TYPES OF MERGER

HORIZENTAL MERGER VERTICAL MERGER

CONGLOMERATE MERGER

CONCENTRIC MERGER ACQUISITIONWhen one company takes over another and clearly establishes its self as the new owner a purchase is called an acquisition. Acquisition can be friendly or hostile.

JOINT VENTURES1. A joint venture is an entity created when two or more firms pool a portion of there resources to create a separate, jointly owned organization. all involved will have an equity stake in new venture

2. It is legal partnership between two or more companies where in they both make new entity for competitive advantage

3. Unlike mergers and acquisitions, in joint venture the parent companies does not cease to exist.

REASON/OBJECTIVES/FOR ADOPTING GROWTH STRATEGY: To ensure survival in the long run. To achieve economies of large scale production and distribution. To build corporate image To survive during tough times such as during recession. To encourage innovativeness on the part of management.CHAPTER-2GROWTH STRATEGY OF SBI

NAME OF THE COMPANY

STATE BANK OF INDIAINTRODUCTION OF SBI

State Bank of India (SBI) is a multinational banking and financial services company based in India. It is a government-owned corporation with its headquarters in Mumbai, Maharashtra As of December 2013; it had assets of US$388 billion and 16,000 branches, including 190 foreign offices, making it the largest banking and financial services company in India by assets. State Bank of India is one of the Big Four banks of India, along with ICICI Bank, Punjab National Bank and Bank of Baroda. The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of Madras merged into the other two presidencies banksBank of Calcutta and Bank of Bombayto form the Imperial Bank of India, which in turn became the State Bank of India. Government of India nationalized the Imperial Bank of India in 1955, with Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India is a regional banking behemoth and has 20% market share in deposits and loans among Indian commercial banks. On October 7, 2013, Arundhati Bhattacharya became the first woman to be appointed Chairperson of the bank SBI is in the Banks - Public Sector. The current market capitalisation stands at Rs 105,400.30 crore.The bank has reported a consolidated Net Interest Income of Rs 46,946.76 crore and a Net Profit of Rs 3 crore for the quarter ended Sep 2013.

State Bank of IndiaRegistered AddressState Bank Bhavan, Corporate Centre,,Madame Cama Marg, Mumbai Maharashtra 400021

Tel: 022-22740841 022-22740842Fax: 022-22855348 Email: investor.complaints@sbi.co.inWebsite: http://www.sbi.co.inGroup: SBI Group

RegistrarsDatamatics Financial Services Ltd. Plot No. B-5, MIDC, Part B Cross Lane, Andheri (E) Mumbai - 400093Maharashtra

Tel: 022-66712151 - 160Fax: 022-66712230Email: Investorsqry@dfssl.comWebsite: http://www.dfssl.comManagement - State Bank of India

NameDesignation

Hemant G ContractorManaging Director

S VishvanathanManaging Director

S VenkatachalamDirector

Parthasarathy IyengarDirector

J B MohapatraDirector

Rajiv KumarDirector

Harichandra Bahadur SinghDirector

Urjit R PatelDirector

Rajendra Kumar SarafDy.Managing Director & CFO

NameDesignation

A Krishna KumarManaging Director

Arundhati BhattacharyaManaging Director & CFO

D SundaramDirector

Thomas MathewDirector

S K MukherjeeDirector

Deepak I AminDirector

Rajiv TakruDirector

Tribhuwan Nath ChaturvediPart Time Non Official Director

P Pradeep KumarManaging Director

Operations Conducted By SBISBI provides a range of banking products through its network of branches in India and overseas, including products aimed at non-resident Indians (NRIs). SBI has 14 regional hubs and 57 Zonal Offices that are located at important cities throughout India.

Domestic presenceSBI had 14,816 branches in India, as on 31 March 2013, of which 9,851 (66%) were in Rural and Semi-urban areas. In the financial year 2012-13, its revenue was INR 200,560 Crores (US$ 36.9 billion), out of which domestic operations contributed to 95.35% of revenue. Similarly, domestic operations contributed to 88.37% of total profits for the same financial yearInternational presenceThe Israeli branch of the State Bank of India located in Ramat Gan As of 28 June 2013, the bank had 180 overseas offices spread over 34 countries. It has branches of the parent in Moscow, Colombo, Dhaka, Frankfurt, Hong Kong, Tehran, Johannesburg, London, Los Angeles, and Male in the Maldives, Muscat, Dubai, New York, Osaka, Sydney, and Tokyo. It has offshore banking units in the Bahamas, Bahrain, and Singapore, and representative offices in Bhutan and Cape Town. It also has an ADB in Boston, USA.

The Canadian subsidiary, State Bank of India (Canada) also dates to 1982. It has seven branches, four in the Toronto area and three in the Vancouver area.

SBI operates several foreign subsidiaries or affiliates. In 1990, it established an offshore bank: State Bank of India (Mauritius). SBI (Mauritius) has 15 branches in major cities/towns of the country including Rodrigues.

State Bank of India (S.B.I.) Branch at Tsim Sha Tsui, Hong Kong

In 1982, the bank established a subsidiary, State Bank of India (California), which now has ten branches nine branches in the state of California and one in Washington, D.C. The 10th branch was opened in Fremont, California on 28 March 2011. The other eight branches in California are located in Los Angeles, Artesia, San Jose, Canoga Park, Fresno, San Diego, Tustin and Bakersfield.

In Nigeria, SBI operates as INMB Bank. This bank began in 1981 as the Indo-Nigerian Merchant Bank and received permission in 2002 to commence retail banking. It now has five branches in Nigeria.

In Nepal, SBI owns 55% of Nepal SBI Bank, which has branches throughout the country. In Moscow, SBI owns 60% of Commercial Bank of India, with Canara Bank owning the rest. In Indonesia, it owns 76% of PT Bank Indo Monex.

The State Bank of India already has a branch in Shanghai and plans to open one in TianjinIn Kenya, State Bank of India owns 76% of Giro Commercial Bank which it acquired for US$8 million in October 2005.

Associate banksMain Branch of SBI in Mumbai.

SBI has five associate banks; all use the State Bank of India logo, which is a blue circle, and all use the "State Bank of" name, followed by the regional headquarters' name:

State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Mysore State Bank of Patiala State Bank of Travancore

Earlier SBI had seven associate banks, all of which had belonged to princely states until the government nationalised them between October 1959 and May 1960. In tune with the first Five Year Plan, which prioritised the development of rural India, the government integrated these banks into State Bank of India system to expand its rural outreach. There has been a proposal to merge all the associate banks into SBI to create a "mega bank" and streamline the group's operations.

The first step towards unification occurred on 13 August 2008 when State Bank of Saurashtra merged with SBI, reducing the number of associate state banks from seven to six. Then on 19 June 2009 the SBI board approved the absorption of State Bank of Indore. SBI holds 98.3% in State Bank of Indore. (Individuals who held the shares prior to its takeover by the government hold the balance of 1.77 %.)

The acquisition of State Bank of Indore added 470 branches to SBI's existing network of branches. Also, following the acquisition, SBI's total assets will inch very close to the 10 trillion marks (10 billion long scale). The total assets of SBI and the State Bank of Indore stood at 9,981,190 million as of March 2009. The process of merging of State Bank of Indore was completed by April 2010, and the SBI Indore branches started functioning as SBI branches on 26 August 2010.

Non-banking subsidiariesApart from its five associate banks, SBI also has the following non-banking subsidiaries:

SBI Capital Markets Ltd

SBI Funds Management Pvt Ltd

SBI Factors & Commercial Services Pvt Ltd

SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)

SBI DFHI Ltd

SBI Life Insurance Company Limited SBI General Insurance

In March 2001, SBI (with 74% of the total capital), joined with BNP Paribas (with 26% of the remaining capital), to form a joint venture life insurance company named SBI Life Insurance company Ltd. In 2004, SBI DFHI (Discount and Finance House of India) was founded with its headquarters in Mumbai.

Other SBI service pointsSBI has 27,000+ ATMs and SBI group (including associate banks) has 32,752 ATMs.SBI has become the first bank to install an ATM at Drass in the Jammu & Kashmir Kargil region. This was the Bank's 27,032nd ATM on 27 July 2012.

Logo and sloganThe logo of the State Bank of India is a blue circle with a small cut in the bottom that depicts perfection and the small man the common man - being the center of the bank's business.

Slogans: "PURE BANKING, NOTHING ELSE", "WITH YOU - ALL THE WAY", "A BANK OF THE COMMON MAN", "THE BANKER TO EVERY INDIAN", "THE NATION BANKS ON US"

Listings and shareholdingAs on 30 June 2013, Government of India held around 62% equity shares in SBI. Over 800,000 individual shareholders hold approx. 5.7% of its shares. Life Insurance Corporation of India is the largest non-promoter shareholder in the company with 10.9% shareholding.Major competitorsSome of the major competitors for SBI in the banking sector are Axis Bank, ICICI Bank, HDFC Bank, Punjab National Bank, Bank of Baroda, Canara Bank and Bank of India. However in terms of average market share, SBI is by far the largest player in the market

TYPES OF GROWTH STRETAGY FOLLOWED BY SBI

Changing strategies in banks

Strategic evolution of SBIStrategy can be defined as periodic changes a business must introduce to its structure and operation in order to ensure continuity in the face of environmental changes. the strategic evolution of business can thus be understood in terms of major institution such as the state , the market, community and civil society and there interrelationships that may have bearing on its working and there by the achievements of the principle objective of its establishment.historins recognize moments of profound change when the balance of power or influences shift between institution. the SBI is dynamic organisation and has continually change its form to adapt to its environment. here its three key environmental factors. ownership and governance

business processes

structures and systems

Mission statement:

To retain bank position as the premier Indian financial services. it also aims to be a group of world class standards and significant global busssiness commitments to excellence in coustomer,share holder, employee satisfaction so as to play leading role in expanding and diversifying financial service while continuing emphasis on its development banking role.Vision statement:

To be a premier Indian financial service group with global perspective, world class standard of the efficiency and proffesnolism and also its core institutional value to retain its position in the country as pioneer in developing countries, its also aimed to maximize its shareholder value through high sustained earnings per share, to become an institution with culture of mutual care and commitment. It also focusing on a pleasant working environment to have continues working opportunities.Values:

Excellence in service

profit oriented

Belonging and committed to bank

Fairness in all dealing and relation

Risk taking and innovation

team playing

Learning and renewal

integrity

Transparency and policies and system

KEY AREA OF OPREATIONThe business operations of SBI can broadly classified into the key in come generating areas such as national banking, international banking, and corporate banking and treasury operations.Generic strategy adopted by STATE BANK OF INDIA Institution for advance learning: to provide state of the art training for financial products to middle level and senior level executive. 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 for market.

Think tank: to provide expert and information suggestion, model business strategies analysis of market development 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 polices of mulation

Overlapping staff training centers: to validate and closely monitor the staff training centers in seven circles attached to the academy.CENTRALIZATION AND DECENTRALIZATIONIt has a well defined system for decision process. The financial decisions are taken at various levels by different official depending upon their positions and also though committee approach. The centralized credit processing cells are being formed at certain centers for sanction of personal segment loans and under SBI segments. Its branches source the application and forward them to the respective credit processing sale for their consideration. Regarding the sanction of loan each offer of the bank considers the loan proposal sand takes a decision in terms of scheme of delegation of scheme of powers, on merits of proposal. If the bank needs to purchase any kind of equipment like computer and software branch managers are required to take permission to higher authority. So in term of decision making centralizations is high and low. Decentralization where in manager s have some powers to take decision but at limited base.THE RESTRUCTURING To overcome the intense competition from private and foreign banks, SBI planned a major organisional restructuring exercise. The key aspects involved:

redesigning of branches

providing alternate channels

focus on lean structure and technological up gradation

The business process reengineering (BPR) team was constituted in June 2003 with mckinsey and company consultants. the BPR basic goal was create an operating architecture that would facilities service delivery of international standards.

NEW PRODUCTES AND SERVICE Apart from restricting, SBI launched several innovative, value add products to service to projects a customer friendly image. It launched a special service for corporate customers called tele-banking and remote login to support transitional requests. This facility available at 593 branches, and remote login at 269 branches. The bank trade finance solutions called EXIMBILLS, were intended to handled trade finance transactions effectively and enhance the range of service provided to corporate and network branches. In March 2004, SBI announced it was introduced any where banking facility for its customer over 9000 branch across India in the next two years. All the branches in Mumbai would provide this facility by December 2004. SBI launched different customized loan programmed to cater to various section of society depending on income levels and repayment capabilities.intrest rates and repayment periods were tailor made to suit the customer group.ALLIENCES AND TIE-UPTo boost its business, SBI entered into several alliances and tie-up with auto mobile, mutual fund, insurance, project finance and medical equipment companies.AUTO FINANCE Unlike other competitors that they relied on reduce interest rates to get business; SBI extended the tenure of car loans from five to seven years there by lowering the monthly debt repayment burden of the loan seeker. SBI entered into a tie-up with maruti, the largest auto mobile manufacture in India, to provide loans for purchase of maruti car at the rate of 10.05 percent and 11.25 percent for three years and above three years respectively. After the scheme was introduced, SBI emerged as the largest financer of India and the number of maruti vehicle financed grew by 17 percent in the fiscal 2003-04over fiscal 2002-03.SBI STRETAGY IN CURRENT SCENARIOSBI have set up capacity in places where they are not very strong. Its time for them to follow over all SBI philosophy of planning new branches, given the huge untapped potential. Beside this also the best time to benefit from there past expansion, sins ether is lots of trust in SBI. Brand SBI is very strong while people may generally caution about some other brands. They can not only tap the potential better but can also provide safe and transparent alternative to public. The bank is entering much new business with strategic tie-ups, pension funds, general insurance, custodial services, private equity, and mobile banking point of sale merchant acquisition, advisory service structure products etc- each one of them initiative of huge potential growth. Some of the strategies to cope of with the current scenario are listed bellow: Its is SBI philosophy to open new branches. the bank is forging ahead with cutting edge technology and innovative new banking models, to expand is rural banking base, looking at the vast untapped potential in the hinterland and proposes to cover 100,000 villages in the next two years.

SBI planning to hire 11000 employees in current fiscal.

It is also focusing of top up of the market.

Countries largest state bank of India (SBI) has prepared blueprint to go retail in its international operation.

CHAPTER-3BIBLIOGRAPHY

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