indiya infoline

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INDIA INFOLINE

STRATEGIC MANAGEMENT Page 1


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INDIA INFOLINE


INTRODUCTION

INDIA INFOLINE a one-stop financial services shop, most respected for quality o

its advice, personalized service and cutting-edge technology.

The India Infoline group, comprising the holding company, India Infoline Limited

and its wholly-owned subsidiaries, straddle the entire financial services space with

offerings ranging from Equity research, Equities and derivatives trading,

Commodities trading, Portfolio Management Services, Mutual Funds, Life

Insurance, Fixed deposits, GoI bonds and other small savings instruments to loan

products and Investment banking. India Infoline also owns and manages the

websites www.indiainfoline.com and www.5paisa.com The company has a

network of 976 business locations (branches and sub-brokers) spread across 365

cities and towns. It has more than 800,000 customers.

India Infoline Ltd

India Infoline Limited is listed on both the leading stock exchanges in India, viz.the Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE) and

is also a member of both the exchanges. It is engaged in the businesses of Equities

broking, Wealth Advisory Services and Portfolio Management Services. It offers

broking services in the Cash and Derivatives segments of the NSE as well as the

Cash segment of the BSE. It is registered with NSDL as well as CDSL as a

depository participant, providing a one-stop solution for clients trading in the

equities market. It has recently launched its Investment banking and Institutional

Broking business.


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A SEBI authorized Portfolio Manager; it offers Portfolio Management Services to

clients. These services are offered to clients as different schemes, which are based

on differing investment strategies made to reflect the varied risk-return preferences

of clients.

About India Infoline Ltd (Bloomberg: IIFL)

The India Infoline group, comprising the holding company, India Infoline Ltd

(NSE: INDIAINFO, BSE: 532636) and its subsidiaries, is one of the leading

players in the Indian financial services space. India Infoline offers advice and

execution platform for the entire gamut of financial services covering products

ranging from Equities and derivatives, Commodities, Wealth management, Asset

management, Insurance, Fixed deposits, Loans, Investment Banking, GoI bonds

and other small savings instruments. It owns and manages the website,

www.indiainfoline.com, which is one of Indias leading online destinations for

personal finance, stock markets, economy and business.

India Infoline has been awarded the Best Broker, India by Finance Asia and the

Most improved brokerage, India in the Asia Money polls. India Infoline was also

adjudged as Fastest Growing Equity Broking House - Large firms by Dun &

Bradstreet. A forerunner in the field of equity research, India Infolines research is

acknowledged by none other than Forbes as Best of the Web and a must read

for investors in Asia. India Infolines research is available not just over the

Internet but also on international wire services like Bloomberg, Thomson First Call

and Internet Securities where it is amongst one of the most read Indian brokers.

A network of 1,616 business locations spread over 445 cities and towns across

India facilitates the smooth acquisition and servicing of a large customer base. All

our offices are connected with the corporate office in Mumbai with cutting edge


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networking technology. The group caters to a customer base of about a million

customers, over a variety of mediums viz. online, over the phone and at our

branches.

India Infoline refers to India Infoline Ltd and its group companies.

India Infoline Media and Research Services Limited.

The content services represent a strong support that drives the broking,

commodities, mutual fund and portfolio management services businesses. Revenue

generation is through the sale of content to financial and media houses, Indian as

well as global. It undertakes equities research which is acknowledged by none

other than Forbes as 'Best of the Web' and 'a must read for investors in Asia'.

India Infoline's research is available not just over the internet but also on

international wire services like Bloomberg (Code: IILL), Thomson First Call and

Internet Securities where India Infoline is amongst the most read Indian brokers.

India Infoline Commodities Limited.

India Infoline Commodities Pvt Limited is engaged in the business of commodities

broking. Our experience in securities broking empowered us with the requisite

skills and technologies to allow us offer commodities broking as a contra-cyclical

alternative to equities broking. We enjoy memberships with the MCX and

NCDEX, two leading Indian commodities exchanges, and recently acquired

membership of DGCX. We have a multi-channel delivery model, making it among

the select few to offer online as well as offline trading facilities.


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India Infoline Marketing & Services

India Infoline Marketing and Services Limited is the holding company of India

Infoline Insurance Services Limited and India Infoline Insurance Brokers Limited.(a) India Infoline Insurance Services Limited is a registered Corporate Agent with

the Insurance Regulatory and Development Authority (IRDA). It is the largest

Corporate Agent for ICICI Prudential Life Insurance Co Limited, which is India's

largest private Life Insurance Company. India Infoline was the first corporate

agent to get licensed by IRDA in early 2001. (b) India Infoline Insurance Brokers

Limited India Infoline Insurance Brokers Limited is a newly formed subsidiary

which will carry out the business of Insurance broking. We have applied to IRDA

for the insurance broking licence and the clearance for the same is awaited. Post

the grant of license, we propose to also commence the general insurance

distribution business.

India Infoline Investment Services Limited

Consolidated shareholdings of all the subsidiary companies engaged in loans and

financing activities under one subsidiary. Recently, Orient Global, a Singapore-

based investment institution invested USD 76.7 million for a 22.5% stake in India

Infoline Investment Services. This will help focused expansion and capital raising

in the said subsidiaries for various lending businesses like loans against securities,

SME financing, distribution of retail loan products, consumer finance business and

housing finance business. India Infoline Investment Services Private Limited

consists of the following step-down subsidiaries. (a) India Infoline Distribution

Company Limited (distribution of retail loan products) (b) Moneyline Credit

Limited (consumer finance) (c) India Infoline Housing Finance Limited (housing

finance)


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IIFL (Asia) Pte Limited

IIFL (Asia) Pte Limited is wholly owned subsidiary which has been incorporated

in Singapore to pursue financial sector activities in other Asian markets. Further to

obtaining the necessary regulatory approvals, the company has been initially

capitalized at 1 million Singapore dollars.

Global Presence :

China, Brazil, Dubai, Russia, Singapore, UK, US


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HISTORY

We were founded in 1995 by Mr. Nirmal Jain (Chairman and Managing Director)

as an independent business research and information provider. We gradually

evolved into a one-stop financial services solutions provider. Our strong

management team comprises competent and dedicated professionals.

We are a pan-India financial services organization across 1,361 business locations

and a presence in 428 cities. Our global footprint extends across geographies withoffices in New York, Singapore and Dubai. We are listed on the Bombay Stock

Exchange (BSE) and the National Stock Exchange (NSE).

We offer a wide range of services and products comprising broking (retail and

institutional equities and commodities), wealth management, credit and finance,

insurance, asset management and investment banking. We are registered with the

BSE and the NSE for securities trading, MCX, NCDEX and DGCX for

commodities trading, CDSL and NSDL as depository participants. We are

registered as a Category I merchant banker and are a SEBI registered portfolio

manager.

We also received the FII license in IIFL Inc. IIFL Securities Pte Ltd received

approval from the Monetary Authority of Singapore to carry out corporate advisory

and dealing in securities operations. Two subsidiaries India Infoline Investment

Services and Moneyline Credit Limited are registered with RBI as non-deposit

taking non-banking financial services companies. India infoline Housing Finance

Ltd, the housing finance arm, is registered with the National Housing Bank


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Milestones

1995

Incorporated as an equity research and consulting firm with a client base that

included leading FIIs, banks, consulting firms and corporates.

1999

Restructured the business model to embrace the internet; launched

archives.indiainfoline.com mobilized capital from reputed private equity investors.

2000

Commenced the distribution of personal financial products; launched online equity

trading; entered life insurance distribution as a corporate agent. Acknowledged by

Forbes as Best of the Web and ...must read for investors.

2004

Acquired commodities broking license; launched Portfolio Management Service.

2005

Listed on the Indian stock markets.

2006

Acquired membership of DGCX; launched investment banking services.

2007


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Launched a proprietary trading platform; inducted an institutional equities team;

formed a Singapore subsidiary; raised over USD 300 mn in the group; launched

consumer finance business under the Moneyline brand.

2008

Launched wealth management services under the IIFL Wealth brand; set up India

Infoline Private Equity fund; received the Insurance broking license from IRDA;

received the venture capital license; received in principle approval to sponsor a

mutual fund; received Best broker- India award from Finance Asia; Most

Improved Brokerage- India award from Asia money.

2009

Received registration for a housing finance company from the National Housing

Bank; received Fastest growing Equity Broking House - Large firms in India by

Dun & Bradstreet.


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SERVICES

The company is a one-stop financial services shop, most respected for quality o

its advice, personalised service and cutting-edge technology.

EQUITIES

Indiainfoline provided the prospect of researched investing to its clients, which was

hitherto restricted only to the institutions. Research for the retail investor did not

exist prior to Indiainfoline. Indiainfoline leveraged technology to bring the

convenience of trading to the investors location of preference (residence or office)

through computerised access. Indiainfoline made it possible for clients to view

transaction costs and ledger updates in real time

PMS

Our Portfolio Management Service is a product wherein an equity investment

portfolio is created to suit the investment objectives of a client. We at Indiainfoline

invest your resources into stocks from different sectors, depending on your risk-

return profile. This service is particularly advisable for investors who cannot afford

to give time or don't have that expertise for day-to-day management of their equity

portfolio.

RESEARCH

Sound investment decisions depend upon reliable fundamental data and stock

selection techniques. Indiainfoline Equity Research is proud of its reputation for,

and we want you to find the facts that you need. Equity investment professionals

routinely use our research and models as integral tools in their work.


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COMODITIES

Indiainfolines extension into commodities trading reconciles its strategic intent to

emerge as a one-stop solutions financial intermediary. Its experience in securities

broking has empowered it with requisite skills and technologies. The Companys

commodities business provides a contra-cyclical alternative to equities broking. The

Company was among the first to offer the facility of commodities trading in Indias

young commodities market (the MCX commenced operations only in 2003).

Average monthly turnover on the commodity exchanges increased from Rs 0.34 bn

to Rs 20.02 bn. The commodities market has several products with different and

non-correlated cycles. On the whole, the business is fairly insulated against cyclical

gyrations in the business

MORTGAGES

During the year under review, Indiainfoline acquired a 75% stake in Moneytree

Consultancy Services to mark its foray into the business of mortgages and other

loan products distribution. The business is still in the investing phase and at the

time of the acquisition was present only in the cities of Mumbai and Pune. The

Company brings on board expertise in the loans business coupled with existing

relationships across a number of principals in the mortgage and personal loans

businesses. Indiainfoline now has plans to roll the business out across its pan-

Indian network to provide it with a truly national scale in operations .


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Management Team

Mr. Nirmal Jain

Chairman & Managing

Director

India Infoline Ltd.

Mr. R Venkataraman

Executive Director

India Infoline Ltd

Mr Nilesh Vikamsey

Independent Director

India Infoline Ltd

Mr Sat Pal Khattar

Non Executive Director

India Infoline Ltd.

Mr Kranti Sinha

Independent Director

India Infoline Ltd

Mr Arun K. PurvarI

ndependent Director

India Infoline Ltd.


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KEYS STEPS TOWARDS STRATEGIC PLANNING

The preparation of a strategic plan is a multi-step process covering vision, mission,

objectives, values, strategies, goals and programs. These are discussed below. This

step is very important for growth of the organization. These steps can be explained

as follow:

VISION

MISION

OBJECTIVE

GOALS

STRATEGY

VALUES

PROGRAMESS


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y Vision:

The first step is to develop the realistic vision for the business. This vision is

represented as physical appearance, size, activities etc. of an organization which is

in exist in the market. A vision is said to be a vision when an organization develop

a statement that has to be achieved in 5 or more years. The vision statement of

INDIA INFOLINE is

` Our vision is to be the most respected company in the financial

services space.

y Mission:

The mission of INDIA INFOLINE is;

y Focus on world best network

y Forecasting the team work and enhancing the capability of g the team

y Continual improvement

y Elimination of wastes

y Objective:

The objective of INDIA INFOLINE is to provide unbiased and independent

information to market intermediaries and investors.


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y Goals:

Goals are specific interim & ultimate time based measurement to be achieved

by implementing strategy in pursuit of company objective. Following are the

goals of India Infoline:

y Leadership

y Price competitiveness

y Consumer satisfaction

y Strategy:

Strategies means the rules and guidelines by which the mission,objective etc are

achieve

y Values:

It helps in maintain good relationship with the society, suppliers, employee, local

community and other stake holder. our value is from providing information and

advice to executing the orders and providing constant service for the entire gamut

of financial services.

y Programs:

It is the final step which setout implementation plans which covers sources,

objective, time, scale, deadline, budget and performance of the company.


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LEVEL OF STRATEGIC MANAGEMENT

The strategy management level are classify into 3 levels:

1. CORPORATE LEVEL STATEGY:-It describes the companys direction in term of its general attitude towards

growth and management of its various business and product line. Corporate

strategy is the highest level of stategy. Mr. Nirmal Jain (Chairman and

Managing Director) had developed a idea to be a independent business

research and information provider. Registered with the BSE and the NSE for

securities trading, MCX, NCDEX and DGCX for commodities trading,

CDSL and NSDL as depository participants.

Corporate strategy

Business strategy

Function strategy


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2. BUSINESS LEVEL STRATEGY:- It usually occurs at the strategybusiness unit level or product level.The content services represent a strong

support that drives the broking, commodities, mutual fund and portfolio

management services businesses. Revenue generation is through the sale of

content to financial and media houses, Indian as well as global

3. FUNCTION LEVEL STRATEGY:- This strategy relates with thefunction area such as production , marketing, `financing,personnal,etc. The

function strategy aims at achiving functional objectives.


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KEYS TO BUSINESS STRATEGIES

STRENGTHS:

y There is variety of products.

y Low Brokerage charges.

y Low demat charges

y Name Fame in Online trading & Finance sector

y Online dealing with Shares &Commodities

Other Fulfill the insurance needs


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y Protection

y Saving

y investments

WEAKNESSES:

y India Infoline is facing high attrition rate.

y India Infoline process of opening of demat accounts is too lengthy.

y Lack of awareness among the customers.

y Low Morale And Fears Among Brokers

y peoples mentality

OPPORTUNITY:

y Improved technology

y Generate income

y Generate jobs

THREATS:

y Competition

y Economic conditions

y Increasing & decreasing stock market s

y Sociocultural changes

y Changes in laws & Regulations


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BCG MARTIX

The Boston Consulting Group (BCG) Matrix is a simple tool to assess a companys

position in terms of its product range. It helps a company think about its productsand services and make decisions about which it should keep, which it should let go

and which it should invest in further.

BCG matrix can be diagrammatically represented as follow:

Question Marks:

Question marks are products that grow rapidly and as a result consume largeamounts of cash, but because they have low market shares they dont generate

much cash. The result is a large net cash consumption. A question mark has the

potential to gain market share and become a star, and eventually a cash cow when

the market growth slows. If it doesnt become a market leader it will become a dog


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when market growth declines. Question marks need to be analysed carefully to

determine if they are worth the investment required to grow market share.

Stars:

Stars generate large sums of cash because of their strong relative market share, but

also consume large amounts of cash because of their high growth rate. So the cash

being spent and brought in approximately nets out. If a star can maintain its large

market share it will become a cash cow when the market growth rate declines.

Cash Cows:

As leaders in a mature market, cash cows exhibit a return on assets that is greater

than the market growth rate so they generate more cash than they consume.

These units should be milked extracting the profits and investing as little as

possible. They provide the cash required to turn question marks into market

leaders.

Dogs:

Dogs have a low market share and a low growth rate and neither generate nor

consume a large amount of cash. However, dogs are cash traps because of themoney tied up in a business that has little potential. Such businesses are candidates

for divestiture.


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BCG MATRIX

OF

INDIA INFOLINE

STARS STAGE

1. INDIA INFOLINE

INVESTMENT

SERVICES

LTD...(BROKING)

QUESTION MARK STAGE

1. INDIA INFOLINE

INSURANCES

SERVICES LTD...

COW STAGE

1. INDIA INFOLINE

HOUSING

FINANCE LTD...

DOG STAGES

INDIA INFOLINE MEDIA &

RESEARCH SERVICES LTD...


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GE GROWTHMARTIX / GE PLANNING GRID /

MCKINSEY MATRIX

The GE matrix/ McKinsey matrix is a model to perform business portfolio analysis

on the strategic business unit of a corporation. General Electric of USA with the

support of consulting firm McKinsey and company developed a more complicated

matrix as a technique of portfolio analysis. The aim of portfolio analysis was:

y To analysis it current business portfolio and decide which SBU should

received more or less investment.

y To develop growth strategy for adding new product and business to the

portfolio

y Decide which business or product should no longer be retained

The GE business screen includes 9 cells based on 2 parameter i.e. long term

industries attractiveness/ market attractiveness and business strength/ competitive

position. GE matrix includes;

INDUSTRIES ACTRACTIVNESS BUSINESS STRENGTH

y Market growth rate y Market share

y Profitability y Technological position

y Size y Profitability

y Pricing y Size

y Practices y Strength

y Opportunities y Weakness

y Threats


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S

trong Average Weak

3

3

2

1

High

Medium

Low

1

1

2

2

3


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GE Matrix is divided into 9 cells:

CELLS INDICATE

1

Company should investment or

Growth such as market development,

expansion of business

2

Company should hold and maintain

of current strategy

3 Company should stop and selectretrenchment strategies

India Infoline is in business of finance only so GE matrix of this company is not

possible.


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7 s McKinsey model

HARD SKILLS:

1. STRATEGY:- The direction and the scope of the company for a long term

is called strategy.india Infoline Build stronger institutional relationships

through wider and quality research.

2. SYSTEMS:- sitting late or carrying the work home and completing it to

meet the exigencies of deadlines. Taking complete care of the office

property and material like his/her own. Suggestion and action on saving

costs many times for activities not pertaining to his/her own department.

Helping team members from his/her own functional areas as well as others.


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3. STRUCTURE:- The basic organization of the company entities the

structure of the organization.India Infoline Limited is listed on both the

leading stock exchanges in India, viz. the Stock Exchange, Mumbai (BSE)

and the National Stock Exchange (NSE) and is also a member of both the

exchanges. It is engaged in the businesses of Equities broking, Wealth

Advisory Services and Portfolio Management Services

4. SKILLS:- the capabilities and competencies that exist within the company

to do the best for the organization. Its a financial services shop, most

respected for quality of its advice, personalised service and cutting-edge

technology.

5. STAFF:- : the companies people resources the way in which they are

developed, trained and motivated to double digit growth.

6.

SHARED VALUE: A and belief of company that ultimate guide employee

towards value behavior. India infoline committed to provide value added

product to its customer by ethical working enhancing core competencies of

its team. Continual increasing in the system involving total employees

maintaining internal and external customer concept.

7. STYLE:--The India Infoline Group is committed to placing the Investor

First, by continuously striving to increase the efficiency of the operations as

well as the systems and processes for use of corporate resources in such a

way so as to maximize the value to the stakeholders.


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STRATEGIC MANAGEMENT AND

ORGANISTION STRUCTURE


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1 Strategy Formulation

Strategic formulation can also be called as strategic planning. The strategic

formulation can be done it top level or at corporate level. The strategicformulation involves the following steps:

Framing Mission and Objectives: - The first step in formulation of a strategy is

to frame mission and objective of the firms. Vision of India infoline is to be the

most respected company in the financial services space which is made by chairman

Mr.Nirmal.jain.

Analysis of the Internal Environment:- After framing objective and goals

management needs to make an analysis of internal environment. The internal

environment include strengths and weakness of organization. the strength

include Money power which makes them ignorant about the gestation

period. Brand image , brand experience and innovative products.this is also

decided by the top level management or build up automatically as company

progressed up.

Analysis of the External Environment:- the management must conduct an

analysis of the external environment. It include analysis of opportunities and

threats. Huge market is still untapped, only 20 % is insured. and Players like

Angel and Share khan have low premium for similar plans.

Gap Analysis:- management must also conduct Gap analysis i.e. it must

compare an analysis its present performance level and desire future level.

India Infoline are technologically Efficient, powerful, standardized,

segmented according to categories and cheap in price. So all together

customer gets what they need, sometime there is gap between their

expectations and companies delivery of product.


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Framing Alternative Strategies:- They have also back up plan, they use

those plan according to the market condition.

Choice of Strategy:- Mahindra,s first choice of strategy is to appoint more

and more broker and open more branches across india

STEP 2:- STRATEGY IMPLEMENTATION

The strategy is formulated for each and every functional department such as

human resources, marketing, finance and operation. Once the strategy is

formulated next step is implemented of such strategy.

y Formulation of plans, program, and project:- The strategy planned

by top level management. But the implementation part has done by

Business level and function level.The plan that how can they achieved

the target. For this they divided the big work into small work. After

that they implement small work.

yProject implementation:- A project passes through various stages

before the actual implementation . A various phases are follows:

i. Conception phase: - Idea generation. India infoline assist a

company through its various stages of growth beginning with

Private Placement of equity or convertible instruments while it

is privately held

ii. Defining phase: - preliminaries analysis. helping it achieve a

significant size,

iii. Planning and organizing phase: - required recourses. taking it

to the markets through an IPO


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iv. Implementation phase:- taking the project. continuing to

multiply its growth Post-IPO through the inorganic route with

our strategic Mergers & Acquisitions services.

y Procedure implementation:- you have to do is register with us and thats

all. No paperwork no queues and No registration charges.

y Resources allocation:-

a. Membership on the Bombay Stock Exchange Limited and the National

Stock Exchange

b. Registered with the NSDL as well as CDSL as a depository participant,

providing a one-stop solution for clients trading in the equities market

c. Broking services in cash and derivative segments, online as well as

offline.

d. Presence across 350 cities and towns with a network of over 850

business locations Equity client base of over 500,000 clients

y Structural Implementation:- There is a need for organization

structure to implement the strategy. Organization structure is the framework

through which an organization operates. India Infoline uses Divisional

structure.

y

Functional Implementation:- A manager can also change activity of

the sales person. Like India infoline are operate by their authorized

broker.

y Behavioral Implementation:-India Infoline is very much employee


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oriented organization the marketing departments have given the

performance bonus & they have been send to the corporate world to

performance and marketing also.

STEP 2 Strategy Evaluation

y Setting of Standards:- In this level manager set target to his sales person,

generally every departments work on target basis.

y Measurement of Performance:-Now in this case manager analyze that

whatever the target had given to the sales broker has done or not.

y Comparison ofActual Performance with standards:-Now they check

the actual performance of the sales broker and analyze the performance.

y Finding out deviations:- In this case they check why the sales broker not

able to achieve the target, whatever the target had given to the sales people

where was the deviation.

y Analyzing Deviations: - After that the manager and top level management

check that deviation.

y Taking Corrective measures:- After that manger tries to solve those

deviation. Basically the sales people will again send to the training field

review and on job training, the method India infoline adopts quite often.


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Organization Structure

DIVISIONAL STRUCTURE:-As the small business grows it has more

difficulties in managing different function in different geographical market . this

requires a structure that control operation complete successfully in various

location. Requirement of business growing from small to medium is fulfilled by a

structure is called as divisional structure whose division can be as follows :-

a. Geographical area

b. Product and services

c. Customer

STRATEGIC BUSINESS UNIT:- As the business grow in size and diversify ,

organization control & evaluation becomes more difficult the span of control

become too large thus increase in revenue did not mean increase in profit. This

increases co-ordination and communication leading to increase profitability and

overall efficiency.

It can be represent as follows :


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TYPES OF STRATEGY

Diversification strategy

Diversification is a form of corporate strategy for a company. It seeks to increase

profitability through greater sales volume obtained from new products and new

markets. Diversification can occur either at the business unit level or at the

corporate level. At the business unit level, it is most likely to expand into a new

segment of an industry which the business is already in. At the corporate level, it is

generallyand it is also very interesting entering a promising business outside of the

scope of the existing business unit.

Diversification is part of the four main marketing strategies defined by the

Product/Market Ansoff matrix:

Ansoff pointed out that a diversification strategy stands apart from the other three

strategies. The first three strategies are usually pursued with the same technical,

financial, and merchandising resources used for the original product line, whereas

diversification usually requires a company to acquire new skills, new techniques

and new facilities.


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The different types of diversification strategies

The strategies of diversification can include internal development of new products

or markets, acquisition of a firm, alliance with a complementary company,

licensing of new technologies, and distributing or importing a products line

manufactured by another firm. Generally, the final strategy involves a combination

of these options. This combination is determined in function of available

opportunities and consistency with the objectives and the resources of the

company.

There are three types of diversification: concentric, horizontal and conglomerate:

Concentric diversification

This means that there is a technological similarity between the industries, which

means that the firm is able to leverage its technical know-how to gain some

advantage. For example, a company that manufactures industrial adhesives might

decide to diversify into adhesives to be sold via retailers. The technology would bethe same but the marketing effort would need to change. It also seems to increase

its market share to launch a new product which helps the particular company to

earn profit. However, there's one more example, Addition of tomato ketchup and

sauce to the existing "Maggi" brand processed items of Food Specialities Ltd. is an

example of technological-related concentric diversification.

Horizontal diversification

The company adds new products or services that are technologically or

commercially unrelated (but not always) to current products, but which may appeal

to current customers. In a competitive environment, this form of diversification is


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desirable if the present customers are loyal to the current products and if the new

products have a good quality and are well promoted and priced. Moreover, the new

products are marketed to the same economic environment as the existing products,

which may lead to rigidity and instability. In other words, this strategy tends to

increase the firm's dependence on certain market segments. For example company

was making note books earlier now they are also entering into pen market through

its new product.

Horizontal integration occurs when a firm enters a new business (either related or

unrelated) at the same stage of production as its current operations. For example,

Avon's move to market jewelry through its door-to-door sales force involved

marketing new products through existing channels of distribution. An alternative

form of that Avon has also undertaken is selling its products by mail order (e.g.,

clothing, plastic products) and through retail stores (e.g., Tiffany's). In both cases,

Avon is still at the retail stage of the production process.

Conglomerate diversification (or lateral diversification)

The company markets new products or services that have no technological or

commercial synergies with current products, but which may appeal to new groups

of customers. The conglomerate diversification has very little relationship with the

firm's current business. Therefore, the main reasons of adopting such a strategy are

first to improve the profitability and the flexibility of the company, and second to

get a better reception in capital markets as the company gets bigger. Even if thisstrategy is very risky, it could also, if successful, provide increased growth and

profitability.


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INDIA INFOLINE


India infoline use Concentric diversification strategy as Addition of equity

business it Acquired commodities broking license; launched Portfolio Management

Service following the a technological similarity between the industries


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CONCLUSION

Thus to conclude Money power which makes them ignorant about the

gestation period.Brand image , brand experience and innovative products.it

is the largest Corporate Agent for ICICI Prudential Life Insurance Co

Limited, which is India's largest private Life Insurance Company. India

Infoline was the first corporate agent to get licensed by IRDA in early 2001.

India Infoline Insurance Brokers Limited India Infoline Insurance Brokers

Limited is a newly formed subsidiary which will carry out the business of

Insurance broking. We have applied to IRDA for the insurance broking

licence and the clearance for the same is awaited. Post the grant of license,

we propose to also commence the general insurance distribution business.

Intermediary plays a very impportant role because of the following reasons :

y Its a personalised type of marketing.

y Moral hazard of the insured is to be judged.

y Layman does not know insurance

y He has to be guided for the best cover

y He has to be given service in terms of proposal form, claim form, getting

refunds, giving policies, receipts , cover notes.

y He has to be told about requirements and documentation.


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RECOMMENDATIONS

THE INSURANCE PRODUCTS SHOULD NOT BE PITCHED AS PURE

INSURANCE PRODUCTS BUT AS INVESTMENT INSTRUMENTS

HUGE MARKET IS STILL UNTAPPED; OUT OF 320 MILLION

INSURABLE MARKETS ONLY 20 % IS INSURED.

HEALTH INSURANCE AND PENSION SCHEMES HAVE AN

ESTIMATED MARKET POTENTIAL OF 15 BILLION

MANY COMPETITORS IN THE MARKET SELL THE SAME PRODUCT

WITH A SLIGHT DIFFERENCE IN PREMIUM AND OFFERINGS

THE REACH IN SEMI-URBAN AREAS AND RURAL MARKETS IS

STILL VERY LESS

indiya infoline

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