TEACHING PLAN

MKTG-4-0047A | November 17th 2015

BAJAJ FINSERVS QUEST TO STAND

APART

by A. J. Swapna and Dr. Nagendra V. Chowdary

This Teaching Plan was prepared by A. J. Swapna and Dr. Nagendra V. Chowdary, ET CASES, after classroom adaptation. It is
only an illustrative orchestration of the case flyer BAJAJ FINSERVS QUEST TO STAND APART. It is never meant to limit
the learning outcomes, nor does it suggest in any way being the best possible outcome or decision approach.
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No part of this publication may be copied, stored, transmitted, reproduced or distributed in any form or medium whatsoever
without the permission of the copyright owner.

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BAJAJ FINSERVS QUEST TO STAND APART | MKTG-4-0047A

BAJAJ FINSERVS QUEST TO STAND APART

Synopsis
This case flyer offers an overview of the Indian Financial Services industry. It explains the differentiation
strategies for a financial brand and further connects these concepts to Bajaj Finservs differentiation
strategy in the light of Sanjiv Bajajs contrarian decisions.

Prerequisite Conceptual Understanding (PCU)/Before the Classroom Discussion

The students should have a basic understanding of the Indian Financial System and Indian Financial
Services Industry. Also, they must have familiarized themselves with an overview of Bajaj Finservs
businesses and its business performance since 2007.

Case Positioning and Setting

This case flyer can be used for the following:

In MBA Program: This case flyer can be used either in Marketing or Brand Management courses
to discuss how differentiation strategy can be conceived and executed especially in a highly
commoditized industry like financial services

In MDPs/EDPs: This case flyer can also be used in strategy course to understand the importance
of leadership in putting together a differentiated value proposition that can lead to a high
performing business

Case Flyer Analysis and Classroom Discussion

TEACHING PLAN

Preamble to this Case flyer Analysis:

Indian Financial services industry is highly fragmented (and therefore commoditized) with a few
notable national players with strong regional and local players. Bajaj Finserv, with a few contrarian
decisions, has differentiated itself in a commoditized industry, thanks to Sanjiv Bajajs clear thinking
and a well-crafted strategy. Accordingly, this case flyer enables a discussion on the factors that have
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MKTG-4-0047A | BAJAJ FINSERVS QUEST TO STAND APART

helped Bajaj Finserv to differentiate itself in a crowded financial service industry. The classroom
orchestration of this case flyer was carried out in the following (suggested) way [Exhibit (TN)-I]:
Exhibit (TN)-I: Classroom Discussion Dashboard
Analysis
Segment

I. Indian Financial Services

Industry: Commoditized
and The Need for
Differentiation

II. Bajaj Finserv's

Differentiation:
DNA

III. Bajaj
Finserv's
Differentiation
Advantage: The Role
of Leadership

Relevant Section
of Case Flyer

Section I

Section II

Section III

Discussion
Points

Indian Financial System

Types of Financial services
Importance of Financial
Services

Brand
Differentiation
Strategies
Bajaj Finserv's
Differentiation
Strategies

Sanjiv Bajaj's strategic

leadership
Building
highperforming
and
strategically aligned
leadership team.

Anchor Point of
Discussion

The need for differentiation in

Indian Financial services
industry

How Bajaj Finserv

differentiated through a
few
contrarian
decisions?

The importance
leadership

Expected
Learning
Outcomes

Aware of the commoditized

nature of Indian financial
services industry and the need
for differentiation

The
points
of
differentiation for Bajaj
Finserv

Gauge the role and

importance of 'strategic'
leadership in leading a
financial services business

Suggested
Duration

20 minutes

20 minutes

15 minutes

Wrapping Up/
Debriefing

Summarizing
the discussion

of

5 minutes

Prepared by the authors

I.

Indian Financial Services Industry: Commoditized and The Need for Differentiation

The purpose of the first segment/section of this case flyer is to let the students/participants understand
the Indian financial services industry structure and business dynamics of the same. Without a reasonable
understanding of these it wouldnt be prudent to connect the dots between how Bajaj Finserv positioned
its brand vis--vis its differentiation strategy.
What do you mean by financial services? What are characteristics of financial services?

Financial services Financial services also known as financial intermediation, refer to the
services provided by the finance industry, which deal with the management of money by
banks, investment companies, leasing companies, venture capital companies, credit card
companies, insurance companies, consumer finance companies, stock brokers, investment
funds, accountancy companies and government sponsored enterprises

These institutions provide a variety of services to corporate and industrial enterprises for the facilitation
of various financial transactions and other related activities.
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CASE FLYER | 3

TEACHING PLAN

1.

BAJAJ FINSERVS QUEST TO STAND APART | MKTG-4-0047A

2.

Characteristics of financial services The following are the characteristics of financial

services:

i)

Intangibility Financial services are intangible, they cannot be standardized or reproduced

in the same form

ii)

Inseparability The production and supply of financial services cannot be separated, they
have to be performed simultaneously

iii)

Perishability Services cannot be stored, they have to be supplied when the customers
need them

iv)

Variability Financial service organizations have to offer a wide range of products and
services to cater a wide range of customers

v)

Dominance of Human Element Financial services are labor intensive, thus dominated
by human element, as it requires competent and skilled personnel to market the quality
financial products

vi)

Information-based Financial service industrys essential component is information. It

involves creation, dissemination and use of information

What is the importance of financial services for an economys economic growth?

TEACHING PLAN

Financial services industry, like banking industry, provides the momentum to a countrys economic
development by facilitating money transactions and through empowering individual consumers.
Financial services industry promotes economic development through the following:
i)

Economic Growth: The economic growth of any country depends upon the savings and
investments done by its people. Financial service industry mobilizes the savings of people
and channels them into productive investment

ii)

Promotion of Savings: Financial Service industry promotes savings of its people by

providing transformation services

iii)

Capital Formation: Financial service industry facilitates capital formation by rendering

various capital market intermediary services

iv)

Creation of Employment Opportunities: The financial service industry provides

employment opportunities to millions of people all over the world

v)

Contribution to GNP: The contribution of financial services to the GNP has been increasing
steadily

vi)

Provision of Liquidity: The financial services industry facilitates easy conversion of financial
assets into liquid cash thereby promoting liquidity

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MKTG-4-0047A | BAJAJ FINSERVS QUEST TO STAND APART

3.

What are the different types of financial services that are available in India?

The different types of financial services that are available in India were summarized as follows, [Exhibit (TN)-II]:
Exhibit (TN)-II: Types of Financial Services in India
Provision of
Funds

Managing
Investible Funds

Risk Financing

Consultancy Services

Market Operations

Research &
Development

Venture
Capital
Banking
Services
Asset
Financing
Trade
Financing
Credit Cards
Factoring
and
Forfaiting

Portfolio
Management
Merchant
Banking
Mutual and
pension
funds

Project
preparatory
services
Insurance
Export
credit
guarantee

Project preparatory
services
Project report
preparation
Project appraisal
Rehabilitation of
projects
Business advisory
services
Valuation of
investments
Credit rating
Merger, acquisition
and re-engineering

Stock market
operations
Money market
operations
Asset
management
Registrar and
share transfer
agencies
Trusteeship
Retail Market
operation
Futures, options
and derivatives

Equity and
market
research
Investor
education
Training of
personnel
Financial
information
services

Prepared by the authors for classroom discussion

4.

What is the difference between Fund-based Services and Non-Fund-based Services?

The financial services can be broadly classified into two:

a)

Fund/Asset-based Services: Fund Based services involve provision of funds against assets
and bank deposits

b)

Non-Fund/Fee-based Services: The banks charge commission/fee for the services rendered
by financial services company, this is known as non-fund based services

This was further detailed to the participants using Exhibit (TN)-III.

Fund-based Services

Non-Fund-based Services

Underwriting or investment in Shares, debentures, bonds, etc.

Dealing in secondary market activities
Participating in money market instruments like Commercial
Papers, Certificate of Deposits, Treasury Bills, etc.
Equipment leasing or lease financing
Hire purchase
Venture capital
Bill discounting
Insurance services
Factoring
Forfaiting
Housing Finance
Mutual Fund

Securitization
Merchant Banking
Credit Rating
Loan Syndication
Business opportunity related services
Project advisory services
Services to foreign companies and NRIs
Portfolio management
Merger and acquisition
Capital restructuring
Debenture trusteeship
Custodian Services
Stock broking

Prepared by the authors for classroom discussion

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CASE FLYER | 5

TEACHING PLAN

Exhibit (TN)-III: Differences between Fund-based Services and Non-Fund-based Services

BAJAJ FINSERVS QUEST TO STAND APART | MKTG-4-0047A

5.

What do you understand by Indian Financial System and what is the structure of Indian
Financial industry?

The structure of Indian Financial industry was illustrated using Exhibit (TN)-IV:
Exhibit (TN)-IV: The Structure of Indian Financial Industry
COMPONENTS OF THE INDIAN FINANCIAL SYSTEM

Financial Institutions

Banking
Institutions

Financial Markets

Non Banking Money

Institutions Market

Commerical
Banks

- Primary Market
- Secondary Market
- Derivative Market

Organised Financial
Institutions

Type

Public Sector
Private Sector
RRBs
Foreign Banks

Financial Services

Fund
Based

Fee
Based

- Leasing
- Hire Purchase
- Factoring

- Short term
- Medium term
- Long term

- Call Money Market

- Treasury Bills
- Commercial Bills

Cooperative
Banks

Financial Instruments

Capital Term
Market

- Primary Securities
- Secondary Securities
- Innovative Instruments

- Merchant Banking
- Credit Rating
- Mergers

Unorganised
Financial Institutions

Source: http://www.indianmba.com/Faculty_Column/FC1063/fc1063.html

6.

How do you characterize the nature of Indian Financial Service industry?

Majority of the participants said that the Indian financial service industry was highly fragmented and
commoditized because very few organized players operate in financial services [Exhibit (TN)-V].
Exhibit (TN)-V: Relationship between Commoditization and Differentiation

Need for Differentiation

TEACHING PLAN

High

Low
Low

Commoditization/Fragmentation High

Source: Classroom Analysis

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The x-axis represents the commoditization/fragmentation and the y-axis represents the need for
differentiation

The higher the commoditization/fragmentation, the need for differentiation increases

proportionately

7.

List the top 10 financial services players in India and characterize the competition in financial
service industry.

Exhibit (TN)-VI illustrates the top 10 financial services players in India for the year 2014-15:

Rank

Financial Services
Players

Type of Financial
Services Offered

Head
Office

Founded
in

Key Strengths/Known for

SBI Capital Markets

Limited

Investment Bank

Mumbai

1986

Excellent services & satisfied customers

Housing
Development
Finance Corporation

Development
Finance Institution

Mumbai

1977

Providing Mortgage Loans to eminent

clients.

Indiabulls Housing
Finance

Private Housing
Finance Company

Gurgaon

2005

Providing hassle free loan services,

incredible team of customer's support, loan
against property on easy terms and low
interest rates.

LIC Housing
Finance Limited

Housing Finance
Company

Mumbai

1989

Capturing the growing mortgage market,

with a huge footprint, they are present in
areas where banking has not reached

Bajaj Capital
Limited

Investment Services
Company

New
Delhi

1965

Talented team of professionals and

customer centric approach

ICICI Group

Banking

Mumbai

1988

Offering tailor made financial services

according to need of customer

L&T Finance
Limited

NBFC

Mumbai

2006

Product list that include home loans,

personal loans, commercial loans,
corporate loans, construction loans, etc.

PNB Housing
Finance Limited

Registered Housing
Finance Company

New
Delhi

1988

Providing personal and corporate loans for

construction

Birla Global Finance

Limited

NBFC

Mumbai

1991

Providing a wide gamut of financial offering

such as Life Insurance, Asset Management,
NBFC, Private Equity, Broking, Wealth
Management & Distribution and General
Insurance Broking Services

10

DSP Merrill Lynch

Limited

NBFC

Mumbai

1914

Helping clients to raise capital, mergers

and acquisitions, securities research, sales
and trading and investment advisory
activities.

Prepared by the authors for classroom discussion

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CASE FLYER | 7

TEACHING PLAN

Exhibit (TN)-VI :Top 10 Financial Services Players in India (2014-15)

BAJAJ FINSERVS QUEST TO STAND APART | MKTG-4-0047A

A detailed analysis was done by the participants based on the information provided in the
Exhibit (TN)-VI:

Out of the top 10 players, three are from the government sector namely, SBI Capital Markets
Limited, LIC Housing Finance Limited and PNB Housing Finance Limited and the remaining
seven are from the private sector. It was also noted that all top 10 players were listed companies

In addition, in the last twenty years there were only two registered companies i.e., IndiaBulls
Housing Finance and L&T Finance Limited. This highlights the market penetration

Most of them have huge housing loans portfolios, which in itself is a clear indicator for kind of
demand the housing sector has

The competition is quite intense because of the market reach and presence of most of these
players. For instance, LIC & SBI with their banking and insurance arms and the accompanying
depth of the distribution are able to penetrate well into the sub-urban and rural areas

Apart from these ten, there are many regional, state and local players that give intense competition
to these established players

II. Bajaj Finservs Differentiation: DNA

The purpose of the second section of the case flyer is to let the students/participants to understand the
points of differentiation for Bajaj Finserv. How Bajaj Finserv differentiated through a few contrarian
decisions was discussed in detail.
1.

What do you think can be the possible platforms for a financial service company to distinguish
and differentiate itself? How do you connect these platforms to Bajaj Finserv?

The possible platforms for a financial service company to distinguish and differentiate itself are quite
a few. However, the class was directed to look out for simple yet powerful ways by which a financial
services company can aim to differentiate itself. After quite a bit of discussion and debate, the broad
contours of differentiating a financial services company was captured through the five
platforms TRUST (Trust, Reach, Unique Product/Service, Service Delivery & Turnaround Time)
[Exhibit (TN)-VII]:
2.

What is Bajaj Finserv and what are its constituent companies involved in offering financial
services in India?

TEACHING PLAN

Bajaj Finserv was formed in April 2007 as a result of its demerger from Bajaj Auto Limited.
This demerger enabled Bajaj Finserv to independently run the core businesses of Lending,
Insurance and Wealth Advisory. Exhibit (TN)-VIII portrays the constituent companies of
Bajaj Finserv

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Exhibit (TN)-VII: Differentiating Platforms of a Financial Service Company

Trust - Bajaj Finserv believes in building Trust through Transparency

T
R

Retail Presence/Reach Bajaj Finserv through its joint ventures and subsidiaries
employs over 20,000 employees and has established a nationwide presence across over
1400 locations (March 2015)

Unique Product/Service Bajaj Finserv as a part of its mission of differentiating itself in

a crowded financial service market, full of me-too players, came up with innovative
and unique insurance products.
Service Delivery Bajaj Finserv's service delivery was convenient and time saving. It
took the distribution office to the customer door step

Turnaround Time For example, for Home loans the time taken by the representatives
to process the loan is 3 minutes and to process loans for consumer durables or two
wheeler loans for existing customers, the process time is just 3 seconds

Source: Classroom Analysis

Exhibit (TN)-VIII : Constituent Companies of Bajaj Finserv

Bajaj Finserv Limited
Bajaj Finance Limited

Insurance Joint Ventures

Bajaj Allianz General
Insurance Company Limited
Bajaj Allianz Life Insurance
Company Limited
BAJAJ

Brand

Bajaj Auto
Finance Limited

Synergies
Scale

Bajaj Allianz
General Insurance
Company

Diverse pool of managerial skill, operational efficiencies

and similar customer base
Among the largest No. 2 in private
No. 2 in private
NBFCs
sector
sector
401 locations

Reach

Bajaj Allianz
Life Insurance
Company

1713 employees

1007 locations

165 locations

TEACHING PLAN

Businesses

Bajaj Finserv

264549 employees 8877 employees

and agents
and agents

4.0 mn customers 6.1 mn customers 5.9 mn customers

Compiled from various sources for classroom discussion

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CASE FLYER | 9

BAJAJ FINSERVS QUEST TO STAND APART | MKTG-4-0047A

3.

Sanjiv Bajaj was quoted in the base article that, when you enter a new space, the initial
impression you create is very important; we dont want to launch something ordinary and
then improve on it later on. How do you think a financial service company can create an
initial impression? Do you think the value proposition can be precisely planned and delivered
or do you think it should and can evolve?
a)

How do you think a financial service company can create an initial impression?
A financial service company can create its first impression through:

b)

By understanding the deeper/latent needs of customers and designing a product/service

that addresses this/these need/needs

Financial Service business should be convenience-driven and build trust among its customers

Many financial service companies have some hidden costs therefore transparency and
upfront communication proves to be very vital

The initial impression in the case of Bajaj Finserv was created with compelling value
proposition with a few differentiating factors which would be elaborated later in this section

The very fact that Sanjiv Bajaj delayed the launch of Bajaj Finservs portfolio of services
is to build trust; instead of launching new products and keep tweaking it, which
would have completely eroded the consumers trust

Do you think the value proposition can be precisely planned and delivered or do you
think it should and can evolve?
Value Proposition Strategy: Planned vs emerging

4.

TEACHING PLAN

The compelling value proposition of Bajaj Finserv in Financial services has been wellcrafted as the base article points out. And most importantly well-executed with a
battery of seasoned professionals

In some cases the value proposition strategy is expected to evolve. In this case Sanjiv
Bajaj decided to be near perfect before he went public with its Go-To-Market (GTM)
Strategy. The logic can be because of the availability of strong reference points in the
form of GE Capital as Sanjiv Bajaj seem to be enamored with its success, especially
under Jack Welsh leadership

How does Bajaj Finserv go about its mission of differentiating itself in a crowded financial
service market, full of me-too players, as the base article questions?

Bajaj Finserv as a part of its mission of differentiating itself in a crowded financial service
market, full of me-too players, came up with innovative insurance products. For instance,
most home insurance products only covered the cost of construction, but Bajaj Finservs
home insurance covered an insurers actual value of house and also its contents1

Contents insurance is the insurance where the insurance company pays for damage to, or loss of, an individuals personal
possessions while they are located within that individuals home.

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5.

Similarly, the general insurance business was restricted to the larger towns and cities because
setting up distribution centers were limited (in terms of cost for acquiring and setting up
offices in hinterland which was prohibitive). To curb this Bajaj Finserv launched virtual
offices at all major locations in India

To change the way financial services are sold and distributed, Bajaj Finserv abandoned cash
collection and operated using cards, thereby taking the distribution office to the customers
doorstep

Headquartered in Pune instead of Mumbai, the financial services capital of India

Rajeev Jain (CEO, Bajaj Finserv) was quoted in article that, We are in a highly commoditized
business and so Sanjivs question to the management has been focused on one area - are we
bringing to market a differentiated proposition that helps customers identify with us very
differently?. What kind of differentiated proposition has Bajaj Finserv been able to bring
to the market across its financial services?

The differentiated proposition that Bajaj Finserv brought to the market across its financial services
was divided into Organizational-Centric and Customer-Centric approach by the participants.
Exhibit (TN)-IX illustrates the discussion.
Exhibit (TN)- IX: Bajaj Finserv Differentiation Proposition
Customer-Centric

Benchmarking Out of 41 top executives, 11 were from GE capital

services/alumni of HBS. This in itself had set a benchmark for performance

Corporate Governance Sanjiv Bajajs focus was on building trust through

transparency. In financial services it is all about trust, which must be
always high

Management Team At Bajaj Finserv, each business had its own CEO.
The respective CEO acted as a strategy guide for the respective team

Diversification Strategy Unlike the

popular mono-line model, Bajaj Finserv
opted for a diversified lending model/multiline model. Examples of Mono-line models
are, Mahindra Finance for purchase of
tractors, Muthoot Finance for gold
mortgage

Technology At Bajaj Finserv, the motto was to innovate using technology

Legacy It was vital for the whole organization to carry the legacy of
Bajaj forward

One- stop Shop It is a one-stop shop

destination for all financial services to
customers

Instant Loans Elaborate systems and

process for instant loan processing for loans

Time Saving 3 minutes for all customers

and 3 seconds for existing customers

Increase in cross-selling Cross-selling is the central framework of Bajaj

Finservs businesses

The Outcomes of the Organizational-Centric approach of differentiation :

Increase in Profits Bajaj Finserv posted a profit of INR1544 crore in

2013-14 from the INR32 crore loss in 2007-08

Increase in number of outlets The company has expanded from 90 to

243 towns having its outlets

The Outcomes of the Customer-Centric

approach of differentiation:

Convenience & Time Saving Taking the

distribution office to the customers door
step

Classroom Analysis

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TEACHING PLAN

Focused Strategy Clear focus on strategy, than taking U-turns

Outcomes

Outcomes

Organizational-Centric

BAJAJ FINSERVS QUEST TO STAND APART | MKTG-4-0047A

6.

Sanjiv Bajaj was quoted in the article that, when you arent selling a physical product,
people become your biggest asset and who you hire becomes even more important. What
is the importance of people in a financial services business?

The importance of people in a financial services business was discussed in the classroom under the
following heads:

Nature of Business Being a service based industry, people are the focus of the business

Need Driven and Trust based Financial service businesses are always need driven and are
built on trust. Therefore, trustworthy people are required especially when dealing with
others money

Push & Pull Strategy More of push than pull strategy i.e., a manufacturer of a product
needs to set up distribution channels and persuade middle men and retailers to stock up the
products so that the product reaches the customer. Similarly, Bajaj Finserv adopts a push
strategy for their products to generate exposure

Further, the participants also discussed the kind of people that a financial services company must have,
which is illustrate below:

7.

Compliance Driven Who is completely compliance driven because it is highly regulated

business

Process Centric and People Focused One eye on process and one eye on people. He/she
should do justice to both and should not serve one at the cost of other

Service Business In any service business it is the person who is serving which is more
important than what is being served

Ethical & Moral Values Need people with high integrity

What is your analysis for Bajaj Finserv financial performance since it is being carved out of
Bajaj Auto Finance in 2007? Do you think Bajaj Finservs performance reflects Bajaj Finservs
brand equity built since 2007?

TEACHING PLAN

Bajaj Finservs financial performance was analyzed by the participants, which is captured,
Exhibit (TN)-X:

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Exhibit (TN)-X: Bajaj Finserv Financial Performance (Q2-2015)

Gross Revenue

INR5185 crore

Profit After Tax

INR441 crore

Number of Branches

7000 retail outlets spread across 115 cities pan-India

No of Employees

Over 20,000 employees

Product Portfolio

Loan Against Shares, Loan Against Insurance Policy, Loan against Mutual Fund, Loan against Bonds,
Business Loan, Home Loan, Doctor Loan, Loan Against Property, Durable Finance, Lifestyle Finance,
EMI Card, Gold Loan, Loan against FD, Lease Rental Discounting, Ecommerce Seller Financing, Two
& Three Wheeler Finance, Extended Warranty and Vendor Finance

Figures in `crore show net profit of

leading life insurance firms in 2011/12

Note: A diversified Aditya Birla Nuvo also houses finance biz. where revenues and
EBITDA attributed to it are `6,550 crore and `661 crore respectively, for 2012.
Bajaj Finance is a standalone lending NBFC, whereas Reliance Capital and Aditya
Birla Nuvo act like holding companies

Figures in `crore show net profit of top

non-life insurance firms for 2011/12
Source: Companies

Compiled from various sources for classroom discussion

The purpose of the third section of the case flyer is to let the participants/students understand the
importance of leadership in building a high-performing and strategically aligned team. By the end of
this section the students should be able to gauge the role and importance of strategic leadership in
leading a financial services business, like Bajaj Finserv.

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TEACHING PLAN

III. Bajaj Finservs Differentiation Advantage: The Role of Leadership

BAJAJ FINSERVS QUEST TO STAND APART | MKTG-4-0047A

1.

What is your assessment of the contribution made by Sanjiv Bajaj, for turning Bajaj Finserv
around from INR32 crore losses in 2007-08 to INR1544 crore profits in 2013-14? What
factors do you think enabled him to deliver such a spectacular performance in 7 years?

TEACHING PLAN

The various factors that enabled Sanjiv Bajaj, deliver such a spectacular performance in 7 years is listed
below:

Family Business Background Sanjiv Bajaj is the younger son of Rahul Bajaj and grandson
of Jamnalal Bajaj, the Founder of the Bajaj business house. Sanjiv carries forward the proud
legacy of Bajaj family

Experience at Bajaj Auto Sanjiv Bajaj began his career on the shop-floor of Tata Motors
and later joined his family business at Bajaj Auto. He took charge as Managing Director of
Bajaj Finserv soon after the company demerger in 2006

Educational Background Sanjiv Bajaj is an MBA graduate from Harvard Business School.
He completed his MSc in manufacturing from University of Warwick and Mechanical
Engineering from University of Pune

Strategic Clarity There has always been constant comparisons between Sanjiv and his
elder brother Rajivs businesses (in terms of profits). But Sanjiv was never daunted by such
comparisons. His mantra was to have a differentiated strategy to cautiously scale up his
businesses. The slow-and-steady approach also reflects in Sanjivs business strategy

Contrarian Decisions Unlike most home insurance products which only covered the
cost of construction Sanjiv Bajaj came up with a product that included both home insurance
and content insurance in a single product. When all the leading insurance players opted the
popular mono-line model, Sanjiv Bajaj chose a diversified lending model/multi-line model.
Sanjiv Bajaj, who had studied mechanical engineering and manufacturing, took control of
a completely new portfolio of businesses financial services. Another divergent decision
was setting up his financial services business in Pune instead of Mumbai

Enforcement of Best Practices Sanjiv Bajaj practiced Cross-selling technology framework

and believed in offering products which cannot be copied by his competitors in next six
months. The target for cross-selling is to have two products per customer in the consumer
business and five products per customer in the SME business,2 said Jain. In wealth
management, too, Sanjiv plans to bring in the cross-selling model

Decision-making Sanjiv Bajajs approach to decision making was consultative in manner;

yet within the strategic framework of company. Sanjiv Bajaj spent most of his time interacting
with financial regulators. It was Sanjiv Bajajs conscious decision to slow down the business
from 2008 because, unlike manufacturing, financial sector was dependent on the regulatory
environment

Anand Adhikari, The Other Bajaj, http://www.businesstoday.in/magazine/features/sanjiv-bajaj-finserv-holdings/story/

191068.html, January 20th 2013 (accessed date: October 22nd 2015)

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MKTG-4-0047A | BAJAJ FINSERVS QUEST TO STAND APART

Sanjiv Bajaj was quoted in the article that, Getting the right people on board was the most
important decision we had to make, followed by getting the strategy right and setting the
right governance mechanism in each of these companies. How do you think Sanjiv Bajaj
has been able to distil the right leadership team across three of his companies?

Sanjiv Bajaj hired some executives whose background was from a diversified finance
company, mostly GE Capital. Even the companys MD and CEO, Rajeev Jain is among
the 11 of the 41 top executives who were recruited from GE Capital

Apart from this Bajaj Finance also took a team of 90 members to Dubai for strategizing,
where video film on Jack Welsh was a part of the training

In a nutshell, Sanjiv Bajaj has been able to distil the right leadership team across three of his
companies by doing the following:
a)

By hiring the leadership team from a diversified financial services company like GE.
(11 out of 41top executives are from GE Capital)

b)

By scheduling one-on-one lunches with senior managers across business to establish a

personal connect as well as to understand their areas of expertise so that he can directly
tap into them when he needs advice

c)

As quoted by Rajeev Jain, He is a professional managers delight provided you are

aligned with his value system and emphasis on building a long term sustainable business.
That being the case, he is highly trusting of senior leaders, highly empowering and
non-intrusive.4

Priyanka Sangani, People become your biggest asset when you arent selling a physical product, http://
economictimes.indiatimes.com/magazines/corporate-dossier/people-become-your-biggest-asset-when-you-arent-selling-aphysical-product/articleshow/45559419.cms, December 19th 2014 (accessed date: October 15th 2015)

Ibid.

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CASE FLYER | 15

TEACHING PLAN

2.

Ownership Culture As stated in the base article, Sanjiv Bajaj is trying to build an ownership
culture in his business. He points out that there should be no chasing of market share at the
cost of profits. To achieve this, Sanjiv always asks two questions about any fresh business
proposal. Can it scale to become a billion-dollar business? And, how will it be different
from others in the same field?3 Once these broad goals were set, he gave the operating
CEO complete freedom.

BAJAJ FINSERVS QUEST TO STAND APART | MKTG-4-0047A

Wrapping Up/Debriefing
The last 5 minutes of the 60 minutes session were used to debrief the class based on what had been
deliberated during the previous 55 minutes. The class deliberated on issues such as functioning and
business dynamics of financial services industry. The class discussed in detail about how differentiation
played an important role in carving a unique identity for brands, especially in commoditized industry
like financial services. The role of leadership in formulating a well-defined strategy and how Bajaj
Finserv has differentiated itself with a few defining contrarian decisions were discussed and summarized.

Big Picture
Differentiation plays an important role in carving a unique identity for brands, especially in a
commoditized industry like financial services. Similar is the role of leadership, in formulating a
well-defined strategy with precision-like execution.

Additional Readings
The following material is suggested for the faculty to provide richer insights into the underlying topic
of the case flyer:
David A. Soberman, The Role of Differentiation in Markets Driven by Advertising, California
Management Review, Volume 45, Spring 2003

Branding: Differentiation that Customers Value, Harvard Business School Press, 2006

Youngme Moon, Break Free from the Product Life Cycle, Harvard Business Review, May
2005

Cynthia A. Montgomery, Putting Leadership Back into Strategy, Harvard Business Review,
January 2008

TEACHING PLAN

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