Part A, B, C.docx

Part A 1. Introduction to the project: Increasingly more number of Indians is joining the millionaire’s club and wealth management in India is gaining popularity. The economic boom and subsequent increase in income levels are acting as the impetus in driving India forward. Wealth management is an investment advice or assistance to manage a person’s finances. “A professional service is the combination of financial / investment advice, accounting/ tax services and, legal / estate planning for one fee.” There are majorly three types of service providers for wealth management currently-Banks, Brokerage firms and Boutique advisory firms. 

Banks have larger investment distribution model which means they concentrate on a larger investment portfolio, they cater to the mid level segment clients as well as HNWI’s (High Net-Worth Individuals).

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Brokerage Firms focus on investing the customers majorly in shares, IPO (Initial Public Offering), which are equity market products.

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Boutique Advisory Firms provides customized financial solutions who are majorly the Ultra-HNWI’s.

The 21st century in India saw a spell of entrepreneurial ventures that has created an ever growing HNWI’s. Due the constant growth of HNWI’s there has been a rapid growth in wealth management as well. India currently has the fourth highest number of HNWI’s in the Asia Pacific region after Japan, China and Australia. The wealth management in India is growing rapidly due two reasons: Changing revolutionary environment and increasing competition. The existing business houses are also diversifying their services and venturing into wealth management. Today wealth management in India is still nascent and hence largely fragmented. Just like every growing industry, competitive rivalry is increasing in wealth management sector in India with existing players expanding their offerings, and the emergence of new local and global players. As of now this industry is fragmented with brokers, sub-brokers, financial advisors, and insurance and tax consultants. Financial institutions, private banking divisions of popular lenders and public sector banks provide wealth management services in India. Wealth management in India is still prospering and also presents itself as a promising profession for

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the new age India. This is could be just the beginning of the boom that the industry is yet to see. Mutual fund Mutual fund is a trust that pools money from a group of investors (sharing common financial goals) and invest the money thus collected into asset classes that match the stated investment objectives of the scheme. Since the stated investment objectives of a mutual fund scheme generally form the basis for an investor's decision to contribute money to the pool, a mutual fund can not deviate from its stated objectives at any point of time. Every Mutual Fund is managed by a fund manager, who using his investment management skills and necessary research works ensures much better return than what an investor can manage on his own. The capital appreciation and other incomes earned from these investments are passed on to the investors (also known as unit holders) in proportion of number of units they own.

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Life Insurance A life insurance policy is a contract with an insurance company. In exchange for premium payments by the beneficiary, the insurance company provides a lump-sum payment, known as a death benefit, upon the insured's death. Usually, life insurance is chosen based on the needs and goals of the owner. Term life insurance generally provides protection for a set period of time, while permanent insurance, such as whole and universal life, provides lifetime coverage. It's important to note that death benefits from all types of life insurance are generally income tax-free

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2. Brief Company Profile: 2.1 Organization history in brief: Bank of Baroda is an Indian state-owned International banking and financial services company headquartered in Vadodara (earlier known as Baroda) in Gujarat, India. It is the second largest bank in India, next to State Bank Of India. Its headquarters is in Vadodara, it has a corporate office in the Mumbai. The bank was founded by the Maharaja of Baroda, Maharaja Sayajirao Gaekwad III on 20 July 1908. The bank, along with 13 other major commercial banks of India, was nationalised on 19 July 1969, by the Government of India and has been designated as a profit-making public sector undertaking (PSU).Bank of Baroda started its overseas journey by opening its first branch way back in 1953 in Mombasa, Kenya. Since then the Bank has come a long way in expanding its international network to serve NRls/PIOs, Indian Corporates around the world and to meet the banking requirements of the local population in the country of operation. The Bank has transformed into 'India's International Bank.'It has significant international presence with branches and offices in 25 countries including Australia, New Zealand, USA, UK, Belgium, Hong Kong, Singapore, Bahamas, Bahrain, Dubai, UAE, China, Fiji Islands, Mauritius, South Africa, Seychelles, Oman, Guyana, Trinidad & Tobago, Kenya, Zambia, Ghana, Thailand, Malaysia, Uganda and Botswana. 2.2 DETAILS ABOUT TOP MANAGEMENT

Non-Executive Chairman

Shri Ravi Venkatesan

Managing Director & CEO Shri P. S. Jayakumar

Executive Directors

Shri Mayank K. Mehta

Executive Directors

Smt. Papia Sengupta

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Directors

Shri Debasish Panda

Directors

Shri Ajay Kumar

Shri

Gopal

Krishan

Directors

Agarwal

Directors

Prof. Biju Varkkey

Directors

Smt. Soundara Kumar

Shri Directors

Directors

Bharatkumar

D.

Dangar

Ms. Usha A Narayanan

2.3 SIZE OF THE ORGANIZATION

Bank of Baroda is a government-run listed banking corporation headquartered in Vododara, Gujarat. It is the country's second biggest bank after State Bank of India (SBI). Bank of Baroda has 5,481 branches across the world. The company has a workforce of over 52,000. In FY17, Bank of Baroda reported a net profit of Rs 1,383 crore and revenue of Rs 42,200 crore. In its international expansion, the Bank of Baroda followed the Indian diaspora, especially that of Gujaratis has 107 branches/offices in 24 countries(excluding India) including 61 branches/offices of the bank, 38 branches of its 8 subsidiaries and 1 5

representative office in Thailand. The Bank of Baroda has a joint venture in Zambia with 16 branchesAmong the Bank of Baroda's overseas branches are ones in the world's major financial centres (e.g., New York, London, Dubai, Hong Kong, Brussels and Singapore), as well as a number in other countries. The bank is engaged in retail banking via the branches of subsidiaries in Botswana, Guyana, Kenya, Tanzania, and Uganda. The bank plans has recently upgraded its representative office in Australia to a branch and set up a joint venture commercial bank in Malaysia. It has a large presence in Mauritius with about nine branches spread out in the country.The Bank of Baroda has received permission or in-principle approval from host country regulators to open new offices in Trinidad and Tobago and Ghana, where it seeks to establish joint ventures or subsidiaries. The bank has received Reserve Bank of India approval to open offices in the Maldives, and New Zealand. It is seeking approval for operations in Bahrain, South Africa, Kuwait, Mozambique, and Qatar, and is establishing offices in Canada, New Zealand, Sri Lanka, Bahrain, Saudi Arabia, and Russia. It also has plans to extend its existing operations in the United Kingdom, the United Arab Emirates, and Botswana.

2.4 VISION & MISSION ‘‘To be a top ranking National Bank of International Standards committed to augmenting stake holders' value through concern, care and competence.’’

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LOGO Their new logo is a unique representation of a universal symbol. It comprises dual ‘B’ letterforms that hold the rays of the rising sun. They call this the Baroda Sun. The sun is an excellent representation of what their bank stands for. It is the single most powerful source of light and energy – its far reaching rays dispel darkness to illuminate everything they touch. At Bank of Baroda, they seek to be the source that will help all their stakeholders realise their goals. To their customers, they seek to be a one-stop, reliable partner who will help them address different financial needs. To their employees, they offer rewarding careers and to their investors and business partners, maximum return on their investment. The single-colour, compelling vermillion palette has been carefully chosen, for its distinctiveness as it stands for hope and energy. They also recognize that their bank is characterised by diversity. Their network of branches spans geographical and cultural boundaries and rural-urban divides. Their customers come from a wide spectrum of industries and backgrounds.

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3. Industry Analysis:

3.1 PESTEL: The banking industry affects all countries. But it’s subservient to many factors, particularly to the government and the economy. Growing middle class income, increased technology usage, legal and regulatory factors and in this way several forces impact the banking sector. Here is a PESTEL analysis of the Banking industry that analyses the impact of these forces on the industry and its growth.  Political factors: Political factors acquire a very important role in the context of the banking sector. Due to this the level of government scrutiny and regulation have to deal with is also very high. However, because of being the leading repositories of the public’s savings, the banks must be regulated and still strict regulation has often been criticised for hindering growth. Apart from it the level of involvement between the banks and the government has also been high since always. 

The government passed the Banking Regulation (Amendment) Bill 2017, which will empower RBI to deal with NPAs in the banking sector.

 Economic factors: Banks and economic growth are interrelated. A growing economy is good for banking sector and a healthy banking sector can be good for the regional economy. Investment banks play an important role in the regional economies and this is particularly true in the case of the US economy. In case of the mixed economies, large corporations and governments depend upon the investment banks when they have to raise funds. In the 21st century, the banks have emerged as important players facilitating business growth. They have emerged as critical partners for small and large businesses helping them with loans, consumer transactions and several other things. 

Reserve Bank of India (RBI) to hike the policy repo rate by 25 basis points (bps) on 1 August , but will pause thereafter when CPI inflation starts moderating in the second half of 2018. Beyond August, RBI will be hiking next in April, once inflation starts inching toward 5% in the January-March 2019 period.

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 Social Factors: Socio cultural forces too can have a deep impact on the banking industry. Changing social trends and people’s preferences can affect the business and growth of the banking brands. Consumer demographics and people’s attitudes towards the financial services have also changed a lot. The millennial whether students or professionals make use of credit cards for small and big transactions. Businesses whether small or big are more open to taking financial assistance from the banks. Consumer confidence has surged owing to economic factors but socially to the acceptance of bans and banking services has risen. 

26 crore bank accounts opened under the Sukanya Samriddhi Scheme.

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Allocation of Rs. 52,719 crore for social inclusion of scheduled castes is proposed in the budget.

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The state government is all set to amalgamate its regional rural banks (RRBs) as well as its district central cooperative banks. This move will enable RRBs cut overheads, improve their capital and use technology, besides helping them draw better scaleefficiency, higher productivity, improved financial inclusion and greater credit flow to rural areas.

 Technological factors: Technology is virtually everywhere in the 21st century. A large part of the tasks carried out by the banks are carried out online. Information technology has taken centre stage and from customer accounts to loans and insurance, several services can be availed of online. Technology has added convenience to banking. However, some issues have also arisen amid all this technological development and innovation. Privacy and security concerns have also grown bigger with the rising use of technology. Banks have to spend significantly large sums on the maintenance of a large technological infrastructure. Apps are common and customers use them any time from their smart phones to shop and pay online. These apps are full of features and make it easy to pay bills online. 

The banking sector is laying greater emphasis on providing improved services to their clients and also upgrading their technology infrastructure, in order to enhance the customer’s overall experience as well as give banks a competitive edge.

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As of March 2018, total number of ATMs in India increased to 207,052 and is further expected to increase to 407,000 ATMs in 2021. 9

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RBI has taken several steps to enable mobile payments, which forms an important part of mobile banking; the central bank has recently removed the transaction limit of INR 50,000 & allowed banks to set their own limits.

 Legal Factors: The banking industry globally is impacted by several laws. It is also a large employer and is affected by the labour laws. Legal risks are immense because oversight and regulation are very high in this sector. 

For the banking sector, the new GST regime brings in a lot of challenges in terms of transaction, customer profiles, IT systems etc. for capturing both front and back-end data. This will require vigilant IT operations and the ability to process high volume data, in order to be ready for complete GST compliance.

 Environmental factors: Sustainability and environment friendliness has become important for the banking sector too just like other businesses. Energy management and other environmental concerns are being addressed by banks globally. Banks also publish their yearly environmental reports highlighting their critical achievements over the year in this area. It creates a positive image and also reduces costs in several operational areas. 

The adoption rate of financial technology, or fintech, in India among digitally-active consumers at 52%. The fintech sector itself has evolved from start-ups disrupting incumbents with their innovative approaches, to the incumbents collaborating with these start-ups to stay relevant and strengthen the financial services ecosystem.

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Automating the workflow to cut workforce inefficiencies : Tool that help firms automate their workflow, track their sales people on a real-time basis and cut inefficiencies of their sales force.

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Smallest wearable wallet: It allows customers to put all their cards in a small device from which they can pay for anything.

3.2 Porter’s Five Forces Analysis: The nature of competition in the industry in large part determines the content of strategy, especially business level strategy .based it is on the fundamental economics of the industry, the very profit potential of an industry is determine by competition interaction. 10

Where these interactions are intense, profit tends to be whittled away by the activities of competing. Porter’s model is based on the insight that a corporate strategy should meet the opportunities and threats in the organizations external environment. Especially, competitive strategy should base on and understanding of industry structures and the way they change. Porter has identified five competitive forces that shape every industry and every market. These forces determine the intensity of competition and hence the profitability and attractiveness of an industry. The objective of corporate strategy should be to modify these competitive forces in a way that improves the position of the organization. Porter’s model supports analysis of the driving forces in an industry. Based on the information derived from the Five Forces Analysis, management can decide how to influence or to exploit particular characteristics of their industry.

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Rivalry among Competing Firms: Rivalry among competitors is very fierce in Indian Banking Industry. The services banks offer is more of homogeneous which makes the Company to offer the same service at a lower rate and eat their competitor market’s share. Market Players use all sorts of aggressive selling strategies and activities from intensive advertisement campaigns to promotional stuff. Even consumer switch from one bank to another, if there is a wide spread in the interest. Hence the intensity of rivalry is very high. The no of factors has contributed to increase rivalry those are.

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A large no of banks: There are so many banks and non financial institution fighting for same pie, which has intensified competition has a vague idea

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High market growth rate: India is seen as one of the biggest market place and growth rate in Indian banking industry is also very high. This has ignited the competition. 11

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Homogeneous product and services: The services banks offer is more of homogeneous which makes the company to offer the same service at a lower rate and eat their competitor market’s share.

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Low switching cost: Consumers switching cost is very low, they can easily switch from one bank to another bank and very little loyalty exist.

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UN differentiated services: Almost every bank provides similar services. Every bank tries to copy each other services and technology which increase level of competition.

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High exit barriers: High exit barriers humiliate banks to earn profit and retain customers by providing world class services.

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Low government regulations: There are low regulations exist to start a new business due policy adopted by India.

BARGAINING POWER OF SUPPLIERS Banking industry is governed by Reserve Bank of India. Reserve Bank of India is the authority to take monetary action which leads to direct impact on circulation of money in the Economy. The rules and regulation lay down by RBI. Suppliers of banks are depositors. These are those people who have excess money and prefer regular income and safety. In banking industry suppliers have low bargaining power. 

Nature of suppliers: Suppliers of banks are those people who prefer low risk and those who need regular income and safety as well. Banks best place for them to deposits theirs surplus money.

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RBI rules and regulations: Banks are subject to RBI rules and regulations. Banks have to behave in a way that RBI wants. So RBI takes all decisions related to interest rates. This reduces bargaining power of suppliers.

BARGAINING POWER OF CONSUMERS In today world, Customer is the King. Banks offers different services According to clients need and requirement. They offer loans at Prime Lending Rate (PLR) to their trust worthy clients and higher rate to others clients. Customers of banks are those who take loans and uses services of banks. Customers have high bargaining power. These are

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Large no of alternatives: Customers have large no of alternatives, there are so many banks, which fight for same pie. There are many non financial institutions like ICICI, HDFC etc. which has also jump into these business .there are foreign banks , privet banks, co-operative banks and development banks together with specialized financial companies that provides finance to customers .these all increase preference for customers.

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Low switching cost: Cost of switching from one bank to another is low. Banks are also providing zero balance account and other types of facilities. They are free to select any banks service. Switching cost are becoming lower with internet banking gaining momentum and a result customers loyalties are harder to retain.

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Undifferentiated service: Bank provide merely similar service there are no much diffracted in service provides by different banks so, bargaining power of customers increase. They cannot be charged for differentiation.

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Full information about the market: Customers have full information about the market due to globalization and digitalization Consumers have become advance and sophisticated. They are aware with each market condition so banks have to be more completive and customer friendly to serve them. For good creditworthy borrowers bargaining power is high due to the availability of large number of banks

POTENTIAL ENTRY OF NEW COMPETITORS Reserve Bank of India has laid out a stagnant rules and regulation for new entrant in Banking Industry. We expect merger and acquisition in the banking industry in near future. Hence, the industry is less porn of new competitor. Barriers to an entry in banking industry no longer exist. So lots of privet and foreign banks are entering in the market. Competitors can come from an industry to ‘disinter mediate ‘bank product differentiation is very difficult for banks and exit is difficult. So every bank strives to survive in highly competitive market so we see intense competitive can mergers and acquisitions. Government policies are supportive to start new bank. There is less statutory requirement needed to start a new venture? Every bank to tries to achieve economics of scale through use of technology and selecting and training manpower .There are public sector banks, private sector and foreign banks along with non banking finance companies competing in similar business segments.

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POTENTIAL DEVELOPMENT OF SUBSTITUTE PRODUCTS Every day there is one or the other new product in financial sector. Banks are not limited to tradition banking which just offers deposit and lending. In addition, today banks offers Loans for all products, derivatives, For Ex, Insurance, Mutual Fund, Demit account to name a few. The wide range of choices and needs give a sufficient room for new product development and product enhancement. Substitute products or services are those, which are different but satisfy t he sam e set of cust om ers. In privat e banking indust r y foll owi ng are the substitutes: 

NBFC: Non-banking financial Institutions play an important role in giving financial assistance. Mobilization of financial resources outside the traditional banking system has witnessed a tremendous growth in recent years in the India. Borrower can easily raise funds from NBFC because it requires less formal procedure for getting funds compare to private banks.

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Post Office Products: Post office is also providing some service like fixed deposit facility, saving account, recurring account etc. The interest rate of savi ng account i s hi gher t han pri vat e banks. It i s ful l y secured b y t he government so people who do not want to take risk for them post office saving is good substitute.

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Government Bond: Govt. Bond also attracts savings from the general public. It is less risky and more secured as compare to savings in private banks.

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Mutual Funds: Mutual funds are also now proving as good substitutes for banks. They assure for providing high return with less time in comparison of banks. The administrative expenses are also very low as compared to banks. Investment in Mutual funds is more flexible than investment in banks.

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Stock Market: People who are ready to bear risk and wants a high return on their investment, stock market is a good substitute for them. Day by day inves tors are moving towards stock market as interest rate in banks are decreasing. So now stock market has proved as a big competitor for banking sector.

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Debentures: Debentures is also proved as a good substitute of bank’s fixed deposit as return on debenture is fixed and high. There are different types of debentures, which attract various classes of investors.

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Other Investment Alternatives: Now common people’s attraction is shifting from banks to other various alternatives such as gold, precious metals, land, small savings etc. As we can see the growing trend in these alternatives in comparison of decreasing interest rates in banks.

3.3 Porters Generic strategies:

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Cost Leadership: Banking industry has ability to cut price .The banking industry sells its products either at average industry prices to earn a profit higher than that of rivals, or below the average industry prices to gain market shares. Banks may acquire cost advantages by improving process efficiencies, gaining unique access to a large source of lower cost materials, making optimal outsourcing and vertical integration decisions, or avoiding some costs altogether.

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Differentiation: Banking industry seeks to provide unique products with unique features. Customers value the attributes and the uniqueness of the products that bank offers, it may allow the banks to charge customers with premium charge price. It’s mainly on technological aspects but 15

certain low end customers find it interesting and innovative. Sometimes some customers may not be open to the new and innovative techniques and may be unwilling to pay the extra premium charge. 

Focus: Banking industry also focuses on narrow segment and with that segment it either attempts to achieve cost advantage or differentiation. Banking industry focus strategy either achieves differentiation by tending to the needs of particular targets or succumbs to the cost demands of the particular target.

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4. Company Analysis: 4.1 SWOT:

Strengths: 

Diversified branch network: Bank of Baroda, being the second largest bank in India, has a diversified branch network mix which sustains low cost resource mobilization. Bank of Baroda has about 5330 branches throughout the country and has penetrated into the rural India too with about 1964 branches in rural India.

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Complete Banking products portfolio – Bank of Baroda has the complete portfolio of Banking services and financial products, many of which are availed by their customers.

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Government accounts – There are multiple government accounts which support the operation of Bank of Baroda. For example – Railways pensioners get their pension from Bank of Baroda accounts. Similarly, different government profiles need to have a government bank account to receive salary or pension in which case Bank of Baroda benefits over private banks.

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Strong Capital Position: Bank of Baroda has maintained at good capital adequacy ratio (CAR) of 13.2% as on March 31, 2016.The bank’s net worth was at INR 305,860 million. The strong capital position helps the bank to sustain its solvency levels in the time of adverse market conditions.

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Second Largest Bank: Bank of Baroda is the second largest bank in India with its global business at INR 9,578,080 million as on March 31, 2016.

Weakness: 

High growth in NPAs: The growth in Bank of Baroda’s NPAs is outpacing the growth in its advances. In FY2016, BOB’s NPA was 9.9% of gross advances. From 0.9% in 2009, the bank’s NPA has grown to 5% in 2016. Higher growth in NPAs is offsetting benefits of growth.

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Low overseas presence: Bank of Baroda is in the top 25 banks in Asia, yet the bank is over dependent on its Indian market, i.e. 89.6%. BOB’s contribution of operations to revenue and profits is very low when compared to the top 10 largest banks in Asia. The low overseas presence increase business risks.

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Low brand equity being government banks – Government banks are known to advertise very less and only as per budget available. As a result, the bank has very low brand equity when compared with private banks. In terms of Government banks, State bank of India and other such state bank branches as well as Bank of India has higher brand equity.

Opportunities: 

Transformation to Bankassurance model: BOB has the vision to transform itself into a bancassurance driven financial institution. BOB has ventured into a Joint Venture with Andhra banks and a UK based company Legal and general, to form a life insurance company called IndiaFirst Life Insurance. This model may yield results in the long run for Bank of Baroda.

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Favourable interest rate policies: Improvement in business confidence in India has driven RBI to exit from an expansionary monetary policy (low interest) to a more calibrated monetary policy (high-interest rate). This will boost net interest margins for Indian banks.

Threats: 

Intensifying Competition: RBI has allowed foreign banks to invest up to 74% in Indian banks. This allows competition to raise funds from the foreign banks and give competitions to existing large public and private sector banks in India.

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Lukewarm global interbank lending: Post the sub-prime crisis, the global market for interbank lending has been lifeless. The sub-prime crisis has exposed various banking institutes of US, UK and many European countries. This has made raising money in foreign currencies all the more difficult for the existing banks

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Private banks – Private banks are a major competitor to government banks due to facilities provided and because of the high functionality of Private banks over government ones.

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4.2 7 S frameworks to analyse different aspects of the organization: McKinsey 7s model is a tool that analyzes firm’s organizational design by looking at 7 key internal elements: strategy, structure, systems, shared values, style, staff and skills, in order to identify if they are effectively aligned and allow organization to achieve its objectives.

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Shared values: Shared values are also known as super ordinate goals. These are the core values of the company that are evidenced in the corporate culture and general work ethic. In Bank of Baroda the values are meant to be more over as the same as any corporate values are. The main core values are integrity (towards business), understanding (towards colleagues and customers), excellence (to achieve the best), unity (amongst the staff) and responsibility (towards the business).

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Structure: In Bank of Baroda they follows structure which refers to an arrangements about reporting relationships, line communication, rules and procedures which exist to guide the various activities performed by various hierarchical position in organization structure. E.g. In the branch all the important activities regarding loans is passed through the branch manager’s approval only.

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Systems: The bank follows all the rules and regulations and procedures that are permitted to it by the R.B.I to conduct the daily activities. It includes production, planning and control systems, cost accounting procedures, capital budgeting system, recruiting and training development system, performance evaluation system.

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Styles: In Bank of Baroda they adopt the leadership style technique as to wherein the top management takes decision to make organizational changes. It is the pattern of management team over a period of time.

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Staff: The banking staffs in the branch are well trained and work till late hours to complete the given tasks. They are selected for a task according to their potential. They are given constant feedback on their work and are always motivated to perform better in future. There is always constant corporation and unity to be found amongst the bank employees

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Skills: Various steps are also taken in the bank to understand the issues of the employees and also to match up to their expectations. Constant creation of motivation is prompted amongst the employees. A collaborative leadership techniques are often are followed. Identification of key leaders (drivers of change) and development of soft skills in handling delicate process of redundancy.

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Strategy: Bank of Baroda has adopted targeted marketing as a critical component of marketing success. Attracting and retaining profitable customers and turning potential customers into actual customers are a huge challenge – especially when considering the multitude of consumer data available. By understanding the demographic characteristics, lifestyle behaviours and purchase preferences that drives the audience's decisions the bank achieves the marketing strategies. Banks, insurance, finance and investment companies that plan their targeted marketing strategies around deepening their customer and prospect relationships are the ones that remain competitive. Therefore need is to determine and understand the best customers' financial behaviour through segmentation, data, demographics, survey research and modelling. Bank of Baroda pays prompt attention to customer complaints.

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4.3 Value Chain Analysis:

Marketing: Competition has grown intense in the banking sector and there are more international players in the market. As such marketing becomes important for banks to avoid the competitive pressures too. Attracting and retaining customers requires more focus on marketing. Moreover, segmentation is important for banking and insurance companies as all the consumer segments cannot be targeted in the same manner. Bank of Baroda targets different customer segments with suitable plans and services. Brand image is also an important concern for the banking brands. Most often the brand image is influenced by the service quality. Still, marketing in the banks plays an important role in raising brand awareness and it is why banking companies spend so much on advertising and other aspects of marketing. Visibility remains an important concern if brands are to expand their customer base. It is also why banks focus heavily on marketing of their brand and its services. Post-recession growth in the developing countries has remained slow and therefore attracting and retaining customers was somewhat difficult for the brands. So, in this period they were mainly forced to rely on marketing to retain their customer base. The marketing activities involved mainly in Bank of Baroda are made up of sales support,

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branding and advertising activities. However, its overall aim is to maximize profits by driving sales higher. Sales: Sales are also an important function in the banking value chain which is because of the importance of sales for banks. Bank of Baroda is highly competitive bank and apart from entering new markets and finding new customers, it looks out to retain its existing customers. The sales function serves a very important role at this point where it does not just sell but also works at customer engagement and retention. This helps the bank to be connected with its customers. This has also improved the performance of the bank and also has an important effect on the bank’s personality and image. Product: Bank of Baroda offers variety of products to its high end and low end customers. From loans to deposits, Bank of Baroda provides several kinds of products and services. Banks provide a series of products and services, some of which are tangible and several intangible. From deposits and loans to credit cards and foreign exchange services, banks provide plethora of products and services. Transactions: With the help of Technology Bank of Baroda has made transaction facility to its customers very easier and millions of transactions are carried out everyday throughout the world online and offline. From ATMs to online payments, simply millions exchange hands in the form of transactions. Variety of payment clearance systems and settlement systems are used by banks globally. Some of them are ACH networks, ATMs, bankcard networks and check clearing systems. Another method of transaction prevalent is the internet based bill payment system. The debit and credit cards have remained at the forefront of this growth in electronic payments. Even in the branch the customers need not wait in the line for too long for depositing their money they can do it themselves without the need of any cashier as Bank of Baroda has cash depositing machines available at each and every branch.

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Supporting activities are as follows: Technology: The role of technology has grown increasingly important in the banking world. Specifically, several of the most important developments have taken place during the last two to three decades. Technology can also be a source of competitive advantage for the banks since it helps deliver better services than the competitors. Technology has made banking easier and also improved the bank’s productivity. Several of the services can be availed of online and customers do not always need to go to the branch to receive their services. Human Resources: Despite the growing role of technology human resources continue to play an important role in the value chain of the banking industry. Their importance in the banking industry is higher because trust plays an important role in this environment too. Bank of Baroda always tries to match up to the customer’s expectations as the staffs in branch provide excellent services to its customers. Infrastructure: Infrastructure also plays a key role in the banking industry. From physical infrastructure to technology and particularly IT, Bank of Baroda has excellent infrastructure which ultimately has played an important role in the growth and functioning of the bank in all the branches throughout the world. Risk Management guidelines: As banking is all about risk taking, Bank of Baroda provides several rewards to its customers permitted under R.B.I guidelines. Several of the inherent rewards in bank are born of risks. Still, the bank is managing all the risks properly. It is because neither poorly managed nor excessively managed risks are good for the health of the bank. Risk management guidelines

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are therefore an important aspect of the banking value chain. It helps the bank managers to manage their risks and reduce them as required. 4.4 B.C.G Matrix: BCG matrix is a framework created by Boston Consulting Group to evaluate the strategic position of the business brand portfolio and its potential. It classifies business portfolio into four categories based on industry attractiveness (growth rate of industry) and competitive position (relative market share). These two dimensions reveal likely profitability of the business portfolio in terms of cash needed to support that unit and cash generated by it. The general purpose of the analysis is to help understand, which brands the firm should invest in and which ones should be divested.

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Stars: This implies high growth, high market share. The major growth of Bank of Baroda comes from debit cards, credit cards and online transactions this implies that bank has been making most of its money from these activities. Also the bank has a huge customer base and makes most of its money from saving deposits and fixed deposits. The bank credibility depends on its huge client base.

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Cash Cows: This implies low growth and high market share. In Bank of Baroda they are being safe in giving out loans to the customers as a lot of NPA cases have turned up these days. Bank doesn’t easily provide home loans to its customers. Also the bank

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is improving the locker facility in all branches as lockers are not easily available and there is less availability of lockers for existing customers. 

Dogs: This implies low growth and low market share, Zero balance account facility is slowly being removed from the bank as it provides no profit no gain to the bank.



Question marks: This implies high growth and low market share, Bank of Baroda has been providing mutual funds and life insurance products facility to its customers with various flexible payment schemes. It itself has introduced India First Life for Insurance and Baroda Pioneer for mutual funds. Also it has tie ups with Star health Insurance, Max Bupa e.t.c. but the reach of these schemes to its customers is less proclaimed. It’s been trying to improve its reach on overall basis.

4.5 ANS-off Matrix: The Ansoff Product Market Matrix provides a framework for thinking about different options for growth. In essence, the matrix is built around the idea that a growth strategy may focus on either existing or new products or either existing or new markets. This Matrix produces four broad growth strategies.



Market Penetration: It provides more of the same to the same and existing customers. Increase sales of existing markets. It also means penetrating more deeply into the

25

existing markets. In 2012 Bank of Baroda announced the reduction in home loan rates by 25 basis points across all the categories for the existing customers. At Bank of Baroda they try to maintain their existing customers with appropriate schemes. Also try and maintain great relationship with existing customers. 

Market Development: It looks out for new customers for the existing products. Existing products are sold to the new customers mainly to the NRI customers. In Bank of Baroda they have been improving the client base drastically; they also have trying to reach out to the low end customers by providing them required information about the insurance and various schemes in financial sector. - The Bank devised new products, two new deposit schemes `BOB SUVIDHA', `BOB CAPITAL GAINS EXEMPTION DEPOSIT' was launched to suit the savings requirements of individuals, HUF, Association of pursuing, firms and companies.



Product Development: This deals with providing new products to the existing customers. Anytime launching of new products for the existing markets.



Diversification: It looks out for new products and new markets. New products are sold in a completely new market.

26

Part B 5. Introduction: 5.1 Nature of the Problem: The lack of Awareness amongst salaried individuals or amongst working and non working class of the Indian Society on options available for investment and saving purpose is mainly because of the knowledge inference. The gap of knowledge has to be filled with various options for saving and investing amongst the literate and illiterate public as their unaware as to where park their hard earned money. These people are also unaware about the need and importance of both saving and investment.

5.2 Objectives of the study: 

To understand the difference between mutual fund and life Insurance.



To analyse the importance of saving and investing in respect of mutual funds and life insurance.



To study the approach of investors towards mutual funds and life insurance.

5.3 Utility of the study: 

The research is useful to the salaried individuals/banking sector/other financial institutions.



To those who have mere knowledge on mutual funds and also to those who are uncomfortable to make major investment decisions.

5.4 Limitations of the study: 

The sample size limited to 33 out of 40 because of the limited time which is small to represent the entire population.



Narrow minded understanding or thinking of middle class society in India on mutual funds investment as not their cup of the tea.



The research is limited to Tilak Nagar branch in Chembur only and if the same research was carried out in another city the results may vary.



Sometimes the respondents due the time constraints were unable to fill the form with entire concentration.

27

6. Methodology: 6.1 Approach: The approach in which the research has been carried out is quantitative as well as qualitative approach. The planning process applied in the study includes the framework of the entire research process, starting from developing hypothesis to the final evaluation of collected data.

6.2 Sources of the data: Data has been collected from both primary and secondary sources. 

Primary data: Primary data was collected through questionnaires filled by the respondents.



Secondary data: Secondary data was collected through books, Journals, online articles, journal reports.

6.3 Method of Data collection: The data for the following research study was collected through the medium of a questionnaire. The questionnaire was set on the basis of various parameters. These were multiple choice questions, wherein people through various streams filled a form according to their preferences and choices.

6.4 Size of samples and method of sampling: 

Size of the sample was mainly the respondents from the city of Mumbai. The total no of respondents covered were almost 60. The same number of questionnaires was distributed but only 33 were completely received. The results are based on the responses of these 33 respondents.



For the method of sampling the respondents were selected on the basis of convenience sampling method. The selection of units from the population based on their easy availability and accessibility to the researcher is known as convenience sampling. This method was used as part of preliminary research that formed a base for further conducting a detailed research.

28

6.5 Method of Data Analysis: The data thus collected was tabulated, analysed and interpreted with a view to make the study or research more meaningful. Further pie charts are used to get a better understanding of the data collected.

7. Context of the industry problem: The biggest problem faced by the industry is that it’s somehow failing to reach out to the lower class of the society. By this I mean illiterate public of the Indian society. Some people are still oblivion to the concept of saving and investing and they think that its waste of time and money.

8. Presentation/Analysis of the Data:

I.

Age. Responses

Frequency

Percentage

18-30

17

51.5

30-50

13

39.4

50-70

3

9.1

70 above

0

0

Total

33

100

Frequency 18-30

30-50

50-70

70 above

0 3

13

17

29



Analysis:

The age group that has mainly answered or the maximum no of respondents that has answered the questionnaire fall under the age group of 30-50 that is the salaried public of the society, who earn money on monthly basis. 

Interpretation:

Salaried people are aware of the difficulty faced to pool in their hard earned money. After spend on the monthly expenses they are generally uncomfortable in making decisions of saving and investing.

II.

Number of Insurance Policy Holders.

Responses

Frequency

Percentage

Yes

23

72.7

No

10

27.3

Total

33

100

Chart Title 80 70 60 50 40 30 20 10 0 Frequency

Percentage Yes



No

Analysis: 73% of the respondents have an insurance policy.

30



Interpretation : More number of yes indicates that people are aware of the importance or the of having an insurance policy in today’s fast life, but still there is 27% of the public who are not considering it as of great importance.

III.

Number of Mutual Fund Investors.

Responses

Frequency

Percentage

Yes

14

42.4

No

19

57.6

Total

33

100

60 50 40 30 No

20 10

Yes

0 Frequency

Percentage Yes



No

Analysis : The analysis indicates that only 42% of the public invest in mutual funds.



Interpretation: The above data interprets that the respondents are aware of mutual funds but still there is 58% of the population who are oblivion to the concept of investing or do not find it safer medium to invest money.

31

IV.

Preference between Life Insurance and Mutual Funds.

Responses

Frequency

Percentage

Life Insurance

19

59.4

Mutual Funds

14

40.6

Total

33

100

60 50 40

Life Insurance

30

Mutual Funds

20 Mutual Funds Life Insurance

10 0 Frequency



Percentage

Analysis : The analysis indicates that 59% of the public are comfortable with life insurance than mutual funds.



Interpretation: The above data interprets that people are generally only considered with getting life insured rather saving or investing for future prospects.

32

V.

Purpose for Investment.

Responses

Frequency

Percentage

For Good returns

21

63.6

For Investment

5

15.2

For Tax Relief

7

21.2

Total

33

100

Frequency

For Good returns For Investment For Tax Relief



Analysis : The analysis indicates that 64% of the public invest only for the purpose of good returns.



Interpretation: The above data interprets that the respondents expect good returns out of their investments in mutual funds or life insurance.

33

VI.

Preferred Sector to Invest the money.

Responses

Frequency

Percentage

Public Sector

22

66.7

Private Sector

11

33.3

Total

33

100

80 70 60 50 40

Public Sector

30

Private Sector

20 10 0 Frequency



Percentage

Analysis : The analysis indicates that 67% respondents believe investing only in public sector rather than private sector.



Interpretation: The above data interprets that the public don’t want to pool in their money into private sector for safety purposes.

VII.

Percentage of Income invested By the Respondents. Responses

Frequency

Percentage

0-5%

18

54.5

5-10%

9

27.3

10-15%

6

18.2

Total

33

100

34

10-15%

Percentage

5-10%

Frequency

0-5%

0



10

20

30

40

50

60

Analysis : The analysis indicates that 55% of the public only save in the range of 0-5% of their income.



Interpretation: The above data interprets that 18% of the respondents who believe in saving 1015% of their income, are only bothered about spending rather than saving.

VIII.

Suitable Insurance in Current Policy stage of life.

Responses

Frequency Percentage

Life Insurance

5

15.2

Life Insurance and Investment Plan

17

51.5

Pension Plan

5

15.2

Child Plan

0

0

Tax Saving Plan

6

18.2

Total

33

100

35

Frequency Life Insurance Life Insurance and Investment Plan Pension Plan Child Plan Tax Saving Plan



Analysis : The analysis indicates that 52% of the respondents are opting for both concept of life insurance and investment plan.



Interpretation: This further interprets that people would go for both investing and saving options if give any such as ULIPS.

IX.

Preferable Options for Saving and Investment.

Responses

Frequency

Percentage

Fixed Deposits

13

39.4

Post Office Saving Schemes

7

21.2

Recurring Deposits

7

21.2

Others

6

18.2

Total

33

100

36

Others

Recurring Deposits Percentage Frequency

Post Office Saving Schemes

Fixed Deposits

0



20

40

Analysis : The analysis indicates that 39% of the respondents are opting for fixed deposits.



Interpretation: This further interprets that major amount of respondents would go for fixed deposits for future prospects they are not bothered about getting higher returns rather prefer saving the principal amount first.

X.

Mode of Information that is used for Insurance Companies.

Responses

Frequency

Percentage

Advertisements

5

15.6

Financial Institutions

10

31.3

Agents

12

37.5

Workshops

0

0

Others

6

15.6

Total

33

100

37

Advertisements Financial Institutions Agents Workshops Others



Analysis : The analysis indicates that 38% of the respondents get their information from Agents.



Interpretation: This further interprets that all modes of information are not the same. The major portion of respondents gets their information from Agents.

XI.

Factor considered before investing in Mutual Funds.

Responses

Frequency

Percentage

Safety of Principal

5

15.2

Low Risk

10

30.3

Higher Returns

11

33.3

Maturity Period

4

12.1

Terms and Conditions

3

9.1

Total

33

100

38

Frequency Safety of Principal Low Risk Higher Returns

Maturity Period Terms and Conditions



Analysis : The analysis indicates that 33% of the respondents are considered about getting higher returns on their investments.



Interpretation: This further interprets that people would consider about pooling their money in mutual funds with expectation of higher returns.

9. Analysis / Discussion of the Data i.

Age. The salaried individuals are aware of the need and requirement of saving as well as investing, therefore the maximum number of individuals that has answered the questionnaire fall under the age group of 30-50.

ii.

Number of Insurance Policy Holders. Maximum number of respondents have insurance policy but still there are some who don’t consider it of a need or requirement. We can understand that people, who don’t have an insurance policy, are unaware of their major responsibility towards their family.

iii.

Number of Mutual Fund Investors. Only 42% of the total respondents have invested in mutual funds, which means these respondents are aware of the concept of mutual funds, also there aware of its risk and benefits, remaining respondents don’t either understand the concept of mutual funds or either are unaware about the benefits of having a mutual funds.

39

iv.

Preference between Life Insurance and Mutual Funds. From above analysis we can understand that maximum number of respondents have higher preference for life insurance over mutual funds as people are not considered about the future prospects.

v.

Purpose for Investment. The major purpose of investment for every investing respondent is getting good returns over tax relief and just investment purpose.

vi.

Preferred Sector to invest the money. Maximum number of respondents prefers investing in public sector over private sector as people are not ready to risk their principal amount that they have invested.

vii.

Percentage of Income invested by the Respondents. The data interprets that maximum number of respondents believe in saving only 0-5% of their income, which means a smaller portion of income only must be saved rest all is bound to be spent on monthly expenses or on higher standard of living.

viii.

Suitable Insurance in Current Policy stage of life. If respondents are made aware of the schemes available in investing and saving both at the same time they ready to go for such schemes for example ULIPS.

ix.

Preferable Options for Saving and Investment. Maximum number of respondents goes for Fixed Deposits than any other saving and investing options because they want to save the principal amount first for future prospects.

x.

Mode of Information that is used for Insurance Companies. From the above data we can interpret that maximum number of respondents believe in getting their information regarding mutual funds and life insurance from marketing agents of the companies rather than any other modes of information.

xi.

Factor considered before investing in Mutual Funds. Maximum number of respondents consider only of getting higher returns after investing in mutual funds.

40

10. Conclusion: 10.1 Inferences: From the above study it can be concluded that the major salaried public of the Indian society are only considered about getting life insured first and then investing in mutual funds. The general public is unaware about the difference between saving and investing. People just want to spend their money for high standard of living rather than saving for future prospects of life. 10.2 Managerial Implications: The above study can be implied for various investors, also to various financial institutions for the practical understanding of the customers. 10.3 Recommendations (if any): 

Till date people in India don’t want to invest in share market because they are under the impression that it is a bad thing but as the awareness about Mutual fund is increasing as more and more private players are entering in the market. So awareness about MF is good and it can be improved.



Mutual fund is having good growth but many customers from rural areas don’t have any knowledge about Mutual fund. So they must be made aware of why its importance to save and invest.



Deriving the right feedback from customers and bringing out innovative products which cater to customer demands will go a long way in tapping the market potential of the insurance and Mutual fund sector.

41

References:  Porter's Five Forces Model of Competition  Bank Of Baroda, India's International Bank https://www.bankofbaroda.com 

Banking Industry Pestle/pestel Analysis Abhijeet Pratap - https://www.cheshnotes.com/banking-industry-pestelanalysis/

 

Toppicks_sharekhan_100211 | Economic Growth | Inflation https://www.google.com/search?q=porters+generic+strategies&client=firefo xb&source=lnms&tbm=isch&sa=X&ved=0ahUKEwi6oLmFsO7cAhUN3o8 KHfEzD_0Q_AUICigB&biw=1408&bih=689#imgrc=55wLFHgtsmMnxM: https://www.google.com/search?q=porters+generic+strategies&client=firefo xb&source=lnms&tbm=isch&sa=X&ved=0ahUKEwi6oLmFsO7cAhUN3o8 KHfEzD_0Q_AUICigB&biw=1408&bih=689#imgrc=55wLFHgtsmMnxM: http://www.netmba.com/strategy/matrix/bcg/ http://bizdiagram.com/tag/bcg-matrix-example/



 

42

Annexure (Questionnaire)

I.

Age 18-30



30-50



50-70



70 above

II.



III.

IV.

V.

VI.

VII.

Do you have an insurance policy? 

Yes



No

Have you ever invested in mutual funds? 

Yes



No

Whom do you prefer first? 

Life insurance



Mutual funds

What is the purpose of investments? 

For good returns



For investments



For tax relief

In which sector do you prefer to invest your money? 

Public sector



Private sector

What percentage of your income do you invest? 

0-5%



5-10%



10-15% 43

VIII.

IX.

X.

XI.

What kind of insurance would suit your current policy stage of life? 

Life insurance



Life Insurance and Investment plan



Child Plan



Pension Plan



Tax Saving Plan

In what other options of saving or investing would you prefer? 

Fixes deposits



Post office schemes



Recurring deposits



Others

Mode of information that is used for insurance companies 

Advertisements



Financial Institutions



Agents



Workshops



Others

What factor do you consider before investing in a mutual fund? 

Safety of principal



Low risk



Higher returns



Maturity period



Terms and conditions

44

Part C Learning and Takeaways

1. Application of concepts, tools, techniques and skills learnt at PiMSR. 

To maintain the professional etiquettes at workplace.



To have a critical and analytical thinking skill with a view to solve problems from strategic and business focused perspective.



To maintain calm and compose attitude towards the customers.



Learnt how the factors of PESTEL work under the banking industry. Which of the factors affect the banking industry more?



To analyse various prospects of ANSOFF and BCG Matrix and how it has been applicable to the banking industry.



The need and requirement to know the SWOT of the bank, as it helps to understand the major strengths, weakness, opportunities and also the threats faced by the bank.

2. Mention new knowledge, tools, techniques or skills that you may have picked up. 

The ability to build, sustain and expand a network of people, and the ability to solve complex problems.



The ability to work with a wide variety of people, time management and the ability to prioritize customers’ requirements.



Knowledge on how the marketing managers cater to the needs and requirements of customers.

3. Any augmentation of soft skills such as building interpersonal relationships. 

Learnt that the need or preference of various customers differs on the basis of their age, income earned, therefore the basic skill of understanding people and their requirements.



Also how managers have to maintain the decorum of a workplace even at worst conditions.



I majorly learnt that every section of bank needs to operates with different principles and has different working mechanics.

45



There can’t be any room for mistakes in the bank as it’s the customers hard earned money that and the branch possess therefore a need always being alarmed at any plausible situations is of great importance.

4. Any directions for future learning or career path that you may like to pursue. The internship was a great exposure to learn how corporate world works. This experience has helped me to understand my skills, strengths and also to understand where I lack the most and need improvement. Open communication with customers was one of the strongest and most apparent skills that I have learned during my summer internship. Therefore it was a hand’s on experience to understand various customers and also to cater to their needs. I also learnt from my branch manager that even at immense stressful situations we have to maintain the professional etiquettes of a workplace and learn to take responsibility of our subordinate’s mistakes. The internship helped me understand that how to analyse the strengths, weakness, opportunities and threats of the organization and to work upon it. Any tough situation or any stressful situation the branch is able to face it without any doubt, always be able to solve the customer’s problem.

46