ICLA Assignment
ICLA Assignment
ICLA Assignment
GROUP ASSIGNMENT
VALUE CHAIN ANALYSIS OF HDFC LTD.
GROUP 9
Pratyush Kumar Pran(G002)
Arnav Gakhar(G009)
Prathamesh Kolhe (G019)
Hakeemuddin Syed(G029)
Aditya Bajad(G039)
Palak Kewlani(G059)
Kopal Gupta(G069)
Value Chain Analysis for HDFC Bank
Primary Activities:
1. Inbound Logistics (Funds Management)
o Deposits & Liabilities: HDFC Bank generates value by effectively managing
deposits through savings, current accounts, and term deposits. A large CASA
(Current Account Savings Account) base enables the bank to source low-cost funds,
though the CASA ratio has recently seen a decline post-merger (44% to 38%).
o Borrowings: Borrowings from the interbank market, RBI, or through debt
instruments are managed to ensure liquidity. The post-merger increase in borrowings
from 8% to 21% needs efficient management to minimize the impact on profitability.
2. Operations (Core Banking Services)
o Retail & Corporate Banking: HDFC Bank provides services such as loans, wealth
management, and treasury services. The bank’s focus on cross-selling products like
home loans, credit cards, and insurance post-merger with HDFC Ltd. adds to its
revenue-generating capabilities.
o Digital Banking Operations: The bank is a pioneer in digital banking, with
substantial investments in platforms like NetBanking, MobileBanking, and
PayZapp, which streamline operations and reduce transaction costs.
o Risk Management: The bank’s high Capital Adequacy Ratio (CAR) of 19.3%
ensures that it effectively manages credit, market, and operational risks, adding to its
operational robustness.
3. Outbound Logistics (Delivery of Financial Products)
o Branch Network: HDFC Bank’s vast network of 8,851 branches ensures extensive
reach across urban, semi-urban, and rural areas, making banking accessible to a wide
customer base.
o ATMs and Digital Channels: With 20,938 ATMs and extensive digital platforms, the
bank ensures seamless delivery of services like fund transfers, bill payments, and
cash withdrawal. These channels also facilitate cost-efficient customer interaction and
service delivery.
4. Marketing and Sales
o Product Cross-Selling: Post-merger, HDFC Bank is leveraging its expanded
customer base for cross-selling various financial products such as mutual funds,
insurance, and home loans, which is a key revenue driver.
o Digital Marketing: The bank has a strong digital marketing presence and focuses on
customer engagement through personalized offers, online promotions, and social
media marketing, which helps in acquiring new customers and retaining existing
ones.
o Brand Value: HDFC Bank is a well-established brand in India, consistently ranked as
one of the top private sector banks. Its brand reputation drives customer trust and
loyalty.
5. Services (Customer Support)
o Customer Support Infrastructure: HDFC Bank offers multi-channel support
including call centers, in-branch assistance, chatbots, and digital help desks. This
enhances customer satisfaction and problem resolution, ensuring long-term customer
retention.
o Digital Support & Self-Service: The bank’s investment in mobile apps, AI-driven
chatbots, and robust digital self-service platforms helps reduce costs while offering
high-quality service to customers.
o Personalized Services: High-net-worth individuals (HNIs) and priority banking
customers receive personalized banking services, creating additional value and
loyalty.
Support Activities:
1. Firm Infrastructure
o Management: HDFC Bank is known for its strong management and governance
structure. The leadership team drives the strategy with a focus on innovation, risk
management, and sustainability. Its regulatory compliance infrastructure is robust,
although managing post-merger complexities has increased regulatory burdens.
o Financial Systems: The bank has integrated advanced enterprise resource planning
(ERP) and financial risk management systems to ensure operational efficiency and
accurate financial reporting.
2. Human Resource Management
o Talent Acquisition & Retention: Despite facing challenges like high attrition
rates(27%), HDFC Bank continues to recruit talent from top-tier institutions. They
provide rigorous training programs focused on customer service, sales, and digital
banking.
o Employee Training: The bank’s learning and development programs aim at
upskilling employees to handle digital platforms, customer relations, and regulatory
requirements, thus contributing to overall service excellence.
o Employee Welfare: HDFC Bank is working towards improving employee
satisfaction and reducing attrition through better work-life balance initiatives,
employee benefits, and growth opportunities.
3. Technology Development
o Digital Transformation: HDFC Bank has been an early adopter of digital banking
solutions. The bank continues to invest in technologies such as AI, blockchain, cloud
computing, and cybersecurity to drive innovation and maintain its competitive edge
in the rapidly evolving financial landscape.
o Fintech Collaborations: The bank actively collaborates with fintech firms to
integrate innovative solutions such as digital lending platforms, AI-driven customer
service, and blockchain for trade finance, enhancing operational efficiency.
o Cybersecurity: HDFC Bank has invested in robust cybersecurity frameworks to
protect customer data, prevent fraud, and ensure secure online banking experiences.
4. Procurement
o Third-Party Services: HDFC Bank procures software services, IT infrastructure, and
cybersecurity solutions from top providers. Its partnerships with technology vendors
help enhance digital banking services.
o Vendor Management: The bank has a well-established vendor management system
for procuring everything from office supplies to technology services, ensuring
efficient supply chain management that aligns with its cost-reduction strategies.