This presentation is on Religare Enterprises Limited(REL). This presentation has been done in the perspective of research methodology and marketing strategy. You will find detailed information on Religare business strategies and its growth potential in the Indian financial, capital, insurance, asset and wealth management sector.
2. About Religare Online
Religare Online provides online trading facilities. It is a user-friendly web portal that
enables trading across all asset classes and provides a superior Next Gen trading
experience.
Religare Online Trading portal is power packed with useful features like advanced
portfolio tracker, contextual research reports, stock and mutual fund screeners,
interactive charting and many more.
Analysis tools such as Star Ratings provide the latest stock upgrade and downgrade
estimates for around 250 Indian Companies to help you take relevant decisions on your
portfolio.
3. Religare Enterprises Ltd (Religare) is the holding company for the Religare Group, a
diversified financial services group with a presence across Asia, Africa, the Middle
East, Europe and America.
Religare offers a range of financial services - broking and investment banking, retail
and commercial loans, asset and wealth management, and insurance in India.
Religare is expected to face intense competition in the lending business from banks
and other players with access to low-cost funding. The aggressive expansion in loan
book also exposes it to loose under-writing standards and asset quality risks. Any rise
in loan delinquencies could significantly impact Religare’s operations.
Religare aims to establish itself as an emerging market-focused investment bank to
capitalize on the strong economic activities in these markets.
http://www.crisil.com/capital-markets/CRISIL-Research_ier-report-religare.pdf
Religare Business Research Overview
4.
5. Research In Growth Potentials
Life insurance business - huge growth potential Religare offers life insurance
services through its joint venture AEGON Religare Life Insurance Company Ltd
(AEGON Religare) established in July 2008, where it holds a 44% stake. Other
partners are Bennett Coleman & Company (30%) and AEGON N.V (26%).
The Indian life insurance industry is one of the fastest growing industries. Currently,
at US$ 41 bn, India is the fifth largest life insurance market in the world, growing at
~32- 34% p.a. It is believe that the Indian life insurance industry is poised for healthy
growth supported by strong demographics, rising affluence, high savings rate and
increasing life expectancy.
Strong growth in the life insurance industry
6. Wealth management
The flourishing economy along with a boom in asset classes has resulted in a large
number of people moving to the high net worth individual (HNI) category. Religare
operates its wealth management business in partnership with Macquarie through
Religare Macquarie Wealth Management Limited. Backed by the global expertise of
Macquarie and its domestic linkages, Religare has swiftly ramped up its wealth
management platform by offering personalized wealth management solutions to its
HNI and corporate clients.
The wealth management business offers financial products (including mutual funds,
structured products, insurance products and loan products) and financial services to
HNIs. Religare has increased its sales team to ~186 relationship managers. Religare’s
global asset management platform will further strengthen its position in the wealth
management area and provide tailor-made solutions to its HNI clients.
Research In Growth Potentials
7. Problems
The debenture issue has been rated CARE AA- by CARE and [Icra] AA-(Stable) by
Icra. “AA” rating suggests that a company has high ability for servicing financial
obligations and low credit risk, but the modifier suggests that within its category the
company’s comparative standing is below average.
Religare Finvest, a wholly owned subsidiary of Religare Enterprises Ltd, is an NBFC
that doesn’t accept deposits and has its main focus on financing small and medium
enterprises (SMEs) and retail capital market financing.
Investment interested population does not know the company. Most of the banks due
to good branding have the faith of the customers of their banking database. So they
enjoy the liberty of huge database and customers find it more reliable to trade there
rather than with a unknown broker.
Other business player have the advantage of linking the trading accounts of their
customers to saving accounts. Similarly sales proceeds are credited directly to saving
account that attracts a good share of market and run parallel to giant companies.
Religare Business Research
8. SWOT Analysis Identifying Internal strengths (S) and weaknesses (W) External opportunities (O) and threats (T)
Strengths
Religare is market leading securities firms in India serving over 8 lakh clients across
both Offline and Online platforms.
Strong retail, commodities, insurance, asset management, client coverage and wealth
management sector trading growth and increasing internet based trading.
An Integrated Financial Services Platform with 81 institutions including 20 mutual
funds, 10 insurance companies, 35 banks and 11 FIIs. Has strong institutional research
team covers over 185 companies in 16 sectors.
http://www.religare.com/pdf/InvestorPpt050808.pdf
9. SWOT Analysis Identifying Internal strengths (S) and weaknesses (W) External opportunities (O) and threats (T)
Strengths
Leading players in the retail broking segment
The Retail Broking business facilitates trading and investment in equities and equity
derivatives, currencies and commodities for its clients and is operated by RSL and its
subsidiaries.
Religare among India’s largest retail broking and distribution networks: 1,494 points
of presence with a customer base of over 950,000 clients as of March 31, 2015; market
share of 1.44% in equity broking and 3.41% in commodities broking in FY15.
The strong branch network has helped Religare steadily increase its equity broking
client base and expand its market share to 1.44%. The management has indicated
further expansion, especially in Tier II and Tier III cities, through the franchisee
model.
http://www.religare.com/pdf/InvestorPpt050808.pdf
10. SWOT Analysis
Weaknesses
Less penetration in rural areas in life insurance sector
No direct marketing strategy
Customer satisfaction - The company does not have enough Relationship managers
to cater to huge customer base. The account opening takes 2working days whereas an
India bull takes half the time for this purpose.
Branding - Though the company has a efficient products but large part of
investment interested population does not know the company. Most of the banks due
to good branding have the faith of the customers of their banking database. So they
enjoy the liberty of huge database and customers find it more reliable to trade there
rather than with a unknown broker.
Services - Banks like HDFC Bank and ICICI Bank have the advantage of linking the
trading accounts of their customers to saving accounts. Similarly sales proceeds are
credited directly to saving account that attracts a good share of market and run parallel
to giant companies.
11. SWOT Analysis
Opportunities
After the NSE brought the screen based trading system stock market become more
secured and more investors attracted towards securities business. Religare is one of the
early entrants here. This opportunity help him to grab more customers.
It can easily tap the retail investors with small saving through promotional channels
like print media, electronic media, etc. For online business, SEO and PPC are the
most effective digital marketing strategies.
Understanding of stock exchange increasing day by day as the education level in the
country is improving year after year as far as technology goes. This is the biggest
opportunity in stock broking industry in future.
http://www.religare.com/annual-reports.aspx
12. SWOT Analysis
Opportunities
Macro-economic Developments
The Indian economy seems to be getting reenergized, having recorded more than 7%
growth in FY2014-15. This has been on account of improved industrial and services
sector performance. Some of it is also on account of overall improvement in business
sentiment since the formation of the new government at the center.
The overall positive sentiment was also reflected in the improved performance of the
equity market that witnessed one of the highest returns in the recent past, as also in
most other segments of the financial services industry. Over time, the monetary policy
has also been easing with the containment of inflation, in order to provide a further
impetus to growth. All these factors have contributed to an expectation of a further
improvement in the growth trajectory, with the growth rate likely to cross 8% if
enabling structural reforms are implemented.
13. SWOT Analysis
Threats
Direct Competitors - A lot of new competitors are trying to enter the market in this
bullish run to taste the flavor of this cherry. This is creating a lot of competition and it
is creating little confusion in the minds of the customers about the services provided
by the broker. Also many banking firms are entering into the market with huge
investment. Competitors like ICICI, Kotak, HDFC etc. are posing a lot of threats to the
company.
Technology - Online trading is totally based on the technology. Typically, the
technology solution has to start from the Internet front-end. So technology is a kind of
threat because unless until it is working properly it is good but, if business website
does not functioning properly then it will be big threats.
Cost - Small popular stock brokers charged comparatively less than big market
players; hence there is big threat of cost competition. (e.g. discount operator in India
Zerodha, RKSV, SAS Online etc.)
http://clearlogic.ca/the-5-forces-of-competition-and-the-threats-they-pose/
14. Sustainable Competitive Advantage For Religare
Competitive advantage is a company’s ability to perform in one or more ways that
competitors cannot or will not match
- - - Philip Kotler
Religare can gain a competitive advantage when it is able to deliver the more or same
benefits as competitors but at a lower cost (cost Advantage) or deliver benefits that
exceed those of competitive products. (Differentiation Advantage).
How it is obtained –
Marketing Strategies
Finding ways to use resources & capabilities to set firm apart from competitors
Doing something better than other organizations
Controlling or having something others do not have
15. Sustainable Competitive Advantage For Religare
Competitor analysis -- knowing about competitors
1. Who are our
competitors?
2. What are
their strategies?
3. What are
their objectives?
4. What are their
strengths and weaknesses?
5. What are their
reaction patterns?
16. Leading Players In Indian Stock Broking Industries
ICICI Direct India Infoline
ShareKhan Aditya Birla Money
Kotak Securities Motilal Oswal
HDFC Security Angel Broking
Reliance Money Indiabulls Securities
Religare Securities
Sustainable Competitive Advantage For Religare
17. Cost Leadership Differentiation
Focus
(Low Cost)
Focus
(Differentiation)
Market
Scope
Broad
Narrow
Low Cost Differentiation
Competitive Advantage
• Religare can charge optimal cost for its services in the industry to gain competitive
advantage
• Possessing a product or offering a service that is perceived as unique in the
industry
• Providing quality services over competitors
Best Example in India
• Telecom Industry Players
• Chinese Toys
• Pharma Companies as Mankind
Sustainable Competitive Advantage For Religare
18. Strategic Planning Process for Religare Service
Strategic Hierarchy
Strategic Positioning – sets out a corporate-level set of objectives, goals,
mission
(The vision is to build Religare as a globally trusted brand in the financial
services domain and present it as the ‘Investment Gateway of India’.)
Service Strategy – takes these corporate level strategies and refines them into
specific objectives and missions
Tactical Execution – executes the service strategy
19. Strategic Market Planning Process For Growth – Religare
Market
Penetration
Strategy
Product/Service
Development
Strategy
Market Development
Strategy
Diversification
Strategy
Existing
Market
New
Market
Product/Service
Existing New
20. Market Penetration Strategy –
Religare can use market penetration strategy when it seeks to achieve growth with
existing product/service in the current market segment, aiming to increase its market
shares. In a growing market, simply maintaining market share will result in growth,
and there may exist opportunities to increase market share if competitor reach
capacity limits.
Religare provides verities of financial services, it includes –
Equity, Derivatives, Commodities, Currency, Health insurance etc..
With the help of market penetration strategy Religare can maintain its existing
customers. Religare also achieve market penetration through aggressive marketing
campaigns and distribution strategies.
It may saturate the market with an aggressive advertising campaign consisting of TV,
radio and direct mailing ads. It may also penetrate the market by saturating there
services in the market.
Strategic Market Planning Process For Growth – Religare
21. Market Penetration Strategy With Examples –
Price penetration - drop the price of the product thereby possible increasing the
attractiveness of the product and taking on the challenge of the competitor. price
penetration is not so easy and requires a lot of thinking before the strategy is
implemented because it will also affect the brand and positioning.
Increase promotions - By giving trade discounts, sales promotion discounts, and any
such additional benefits to the customers.
Increase reach - Increasing reach through display advertising, e-mail marketing,
social media marketing, affiliate marketing, relationship manager etc.
Increase usage - By increasing the usage of a services, you can increase its
consumption.
Attract competition customers and dealers - The cola wars are the best example of
attracting competition customers .
Strategic Market Planning Process For Growth – Religare
22. Market Development Strategy –
In this strategy Religare try to develop a business strategy whereby it attempts to find
new groups of buyers as potential customers for its existing products and services. In
other words, it can expand its business into untapped markets. These potential
customer groups may already be served by competitors or may not be currently
marketed to by anyone for the product.
With the help of this strategy Religare can tap different market segment investors like
low income group investors, rural investors, small financial groups etc.
New product/service dimensions or packaging, New distribution channels and
different pricing policies to create a new market segment will help to develop in the
existing competitive environment.
To develop effective market development strategy required detailed market and
competitor intelligence, well researched market, financial data.
Strategic Market Planning Process For Growth – Religare
http://study.com/academy/lesson/market-development-examples-definition-process.html; http://www.quickmba.com/strategy/matrix/ansoff/
23. Market Development Strategy –
New geographical markets - This could involve expanding outside of your region or
selling to a new country or a new continent. Religare also has an international
footprint beyond India through its Capital Markets & Global Asset Management
businesses but still there is huge potential for international growth. Geographical
expansion works well for a company that wants to expand its service territory because
it needs a physical location to serve its customers. Many of the big boys of business,
including McDonalds, Wal-Mart, and Home Depot, have exported their operations to
other countries.
Different pricing policies to create a new market segment - This could involve
charging different prices for different services in different market segment to target
different type of customers.
Strategic Market Planning Process For Growth – Religare
24. Product/Service Development Strategies –
One of the most comfortable business growth strategies for entrepreneurs is
introducing new products or service into existing market as it mirrors the market
development strategy. Even though it appears to be an easier strategy to implement, it
doesn’t come without challenges. Developing new products/services requires new
skills and continual tweaking until success is achieved.
While developing new product/services few things need to be considered –
Religare can introduced new services in the market with proper understanding of
investors need, considering there own brand and use of latest technology like online
trading, mobile trading, personal interaction with client, proper guidance in the
services etc.
Strategic Market Planning Process For Growth – Religare
Customer Needs
Brand Extension
Technology
26. Diversification Strategy –
Diversification strategy is the development of new service in the new market.
Diversification strategy is adopted by the company if the current market is saturated
due to which revenues and profits are lower.
With the help of diversification strategy Religare can expand its business with offering
new services in the market.
As a broker would split his budget across multiple investment tracks and companies,
they should do the same when creating a diverse marketing portfolio. The objective is
to reach your users across all platforms at all times.
Brokerages can earn a lot more revenues from real estate advisory, retail lending,
property loans, health cards, gold refining and trading of renewable energy
certificates, that they earn from good old stock broking. “They have to diversify to
survive tough times.
Strategic Market Planning Process For Growth – Religare
27. Diversification Strategy –
• A diversification strategy achieves growth by developing new products for
completely new markets
• Diversification can occur at two levels: either at the business unit level or at an
organizational level
• The three approaches to diversification or integration are: full diversification,
backward diversification and forward diversification
Examples
Nokia were extremely successful when they diversified into cell phone manufacturing
from their original focus as a producer of paper products. They became the European
market leader, but they have recently suffered a setback with the introduction of
Smartphones. It will take them time to respond to this setback and restore their market
position.
Strategic Market Planning Process For Growth – Religare