Running head: THE LEADER AS A STRATEGIST

The Leader as a Strategist

Viralkumar Patel

THE LEADER AS A STRATEGIST

Company Details
ICICI Bank (Industrial Credit and Investment Corporation of India) is an Indian multinational
banking and financial services company headquartered in Mumbai, Maharashtra, India, with
its registered office in Vadodara, Gujarat ,India . In 2014, it was the second largest bank in India
in terms of assets and third in term of market capitalization. It offers a wide range of banking
products and financial services for corporate and retail customers through a variety of delivery
channels and specialized subsidiaries in the areas of investment banking, life and non-life
insurance, venture capital and asset management. The bank has a network of 4,450 branches
and 13,995 ATMs in India, and has a presence in 19 countries including India.

Products
Credit card, Consumer banking, Corporate banking finance and Insurance, Investment banking,
Mortgage loans, Private banking, Wealth management, Personal loan and payment Solutions.

Vision
To Be the Leading provider of financial services in India and a major global bank

Mission
We will leverage our people, technology, speed and financial capital to:
Be the banker of first choice for our customers by delivering high quality, world-class products
and services.
Maintain a healthy financial profile and diversify our earnings across businesses and
geographies.

THE LEADER AS A STRATEGIST

Maintain high standards of governance and ethics.

Create value for our stakeholders.

Target Segment
People in the high and the mid income group in cross all geographical area.

Positioning
ICICI Bank has positioned itself as the bank that is customer friendly and is using technology to
reach its customer. Michael Porters (1997) articalwhat is strategy mention Strategy position
can be based on customers need, customers accessibility or they variety of a companys products
or services. The ICICI Bank has grown and evolved substantially in these last 20 years.
Normally, banks define as being either retail or corporate, but ICICI transformed itself from a
corporate bank into a retail bank, and now a universal bank. When infrastructure financing
became a big thing in India, ICICI has set up the infrastructure-financing practice for the bank.
When commercial banking opened up for the private sector, they set up the retail-banking
division and grew it substantially. Then Bank ran the international side of for a few years

The retail industry itself was very, very small in India at that time. The first Strategic question
was whether to plan for a big-scale business or a small-scale one; and the leader had to guess
whether this industry was going to grow significantly for the country or not. Bank Leaders knew
this: If per-capita income crosses say, $500, there is a shift in consumer behavior, which results
in a huge amount of consumer spending and consumer borrowing. Then they made the strategic
call (risk taking), saying, India is passing through that phase, and therefore this industry is going

THE LEADER AS A STRATEGIST

to be a big one. Lets plan not for the small size the industry is today, but for what the industry is
going to be five years from now. Clearly, many people were skeptical, saying we were creating
a scale that may never be used. But, as it turned out, this industry grew by more than 50% per
annum, year on year, for many years. The other strategic challenge was that the business was
very new for ICICI itself. They had created a team of people who had worked in this industry for
other banks. That team was ICICIs strategic thinking, but when it came to domain knowledge or
product nuances, Leader had to learn from the team. In that way, the CEO was a kind of a
leadership bridge between ICICIs way of thinking on the one hand and the domain knowledge
of the team on the other hand. CEO had to arrive at decisions not based on past experience, but
on a mix of their domain knowledge and leader gut feel. One of the big decisions was about
customers using electronic channels. At that time, India had some200 or 300 ATMs. ICICI made
the call to set up 3,000 ATMs just from ICICI Bank over two years. This was a big decision, for
which the Bank no past experience to tell them whether it was correct or not. Leaders had to do a
lot of thinking about the shape consumer behavior was going to take. But they thought, This
business is scale-related. You cannot make money in a retail business if youre small-scale. So,
they planned that in three or four years, Bank ought to be the number-one player in this business,
starting from a zero market share. Thats indeed what happened. After about four years, ICIC had
53% market share of the countrys retail credit business. Today, ICICI is the largest player in the
consumer-credit business in India

SWOT Analysis
Strengths
Brand ICICI: The brand image of ICICI is its utmost strength

THE LEADER AS A STRATEGIST

Customized products for rural India: Through the rural branches as well as business
correspondents, ICICI have close to 15 million savings accounts. These products are truly
designed for rural India with focus in convenience, minimum or no paper work as well as
flexibility to transact into small denominations.
Huge network: With the largest number of branches and ATM network (private banks), ICICI
offers great connectivity. With its operations in 19 counties with more than 4450 branches and
13995+ ATMs, ICICI have made its presence felt in market. Internet and mobile banking have
ensured that the banking and financial services of ICICI is, virtually, present at any point in time.
Consistent performance by employees: With over 75000 employees working for ICICI, it takes
immense pain and dedicated team to convert the opportunity into revenues, lowering cost, NPAs,
etc. The employees are the key strength of ICICI. Khayaal Appka (We care for you) spirit of
the employees keep them motivated to do their best in customer satisfaction and enriching
customer experience.
Product Portfolio: ICICIs strength lies in the variety it offers under one roof i.e. product line,
product width and product depth. It provides both banking and non-banking products. Under
banking, it offers personal banking, loans, global private banking, corporate banking, business
banking and NRI banking. Each of these product have further categories, each having its USP to
suit the requirement of its vast customer base.
Technological advances: With its marketing theme Khayaal Appka (We care for you), first of
its kind, ICICI have rolled out 27x7, 365 days electronic branches and electronic lobbies. At
these electronic branches, ICICI have cheque deposit machines, 24 hours video conferencing
facility to interact with customer care personal and kiosk to access internet- banking using debitcard. Further, Money2India, Tab banking, iBizz are examples of innovative products/services

THE LEADER AS A STRATEGIST

offered by ICICI. Leading the industry by taking care of the customers convenience is what
differentiates ICICI from other competing banks.

Weakness
Low penetration in rural market: ICICI has its presence in Rural India. However, the rural market
is so vast that ICICI is just on the tip of the ice berg. Compared to Public Sector Bank which
have deeper penetration in rural market (especially State bank of India).
High transaction cost compared to PSU banks (Public sector bank/Government bank): ICICI
bank charges higher than most of its counterpart and PSU banks for its services. Most of the
companies and individual/retail customer prefers nationalized banks because of their lower
transaction costs. Today, companies opt for multi-bank operations so as to get the benefit of
lower cost for its different financial needs. Thus, if ICICI is able to control its cost and make it
more flexible, there exist an opportunity to increase market share.
Poor customer service: ICICI has, no doubt, increased its customer base and market share
rapidly in last decade. However, the service quality has not matched the standards that the
company sets in due to less number of employees to service the huge customer network.
Presence outside India: Compared to Multi National bank which has wide presence globally,
ICICI fails on this front. That is the reason why most of the International trading company
prefers transacting with MNC Bank and not with ICICI. Expanding its base globally will help
ICICI get hold of corporate clients and accelerating revenues.

Opportunity
Rural Growth: Growth is the all-inclusive i.e. one cannot afford to ignore any segment while

THE LEADER AS A STRATEGIST

seeking growth, be it urban or rural. Specially with respect to Indian market where fortune of any
company lies at the bottom of the pyramid, where a large chunk of population dwells in rural
India and with increasing awareness among the rural people.ICICI have a great opportunity to
expand its base in rural market. From micro banking facilities to micro loans, from multiple
small transactions to transfer of government schemes into rural segment, the rural India is a
multi- billion dollar segment, yet most untouched and untapped. The major transition is
diversification of rural market from agriculture to manufacturing to service industry.
Technological advancement: The change in technology in past decade has changed the way we
live and interact and the effect of technological changes is no exception for banking. Obviously
these changes poses both opportunity and threat, the opportunities outperform the threats. The
increased penetration of internet and computers, the dropping cost of mobile phones device and
access to internet means people have now more accessible ways to interact and conduct business
and this means a lot to banking system as a whole.
Business advising for small players: ICICI as business advisor is very popular among high-end
players, but is almost non-existent at the bottom of the market. ICICI should take this as an
opportunity and provide business advising services to Small and medium enterprises at
competitive rates and be the market leader by having first mover advantage.

Threats
Credit risk and market risk: Credit risk is the risk that the borrower fails to meet its obligation
towards lender. Though there are set of policies and procedures that govern lending of various
products depending on customer profile, there is always a risk associated with it. Similarly, the
market risk, a risk associated with change in macro environment that affects the value of any

THE LEADER AS A STRATEGIST

financial instruments like change in rate of interest, asset pricing, forex, etc., poses challenges
and threats that are difficult to manage and are beyond control.
Unorganized money lending market: Though the bank has been able to get revenues out of rural
market, there is still a lot to be touched. The major hurdle is the unorganized money lending
market that is monopoly of people called Shroff, Sahukar, Seth, etc. These ranges from small
lenders to lenders as big as a bank itself.
Changing banking regulations and economic instability: The ever changing policies of RBI
(Reserve bank of India) with respect to the Cash reserve ratio, SLR, repo and reverse repo rates
affects the money flow into the market. In last couple of years, RBI has used these monetary
instruments to control the inflations in Indian market (Wholesale Price Index). Further, the
change in global economy that directly affects the Indian economy is another threat to banks.
Banking, being an integral part of the economy, is the first sector to get affected by any global
changes.
High competition: In the last decade, Indian banking sector have gone through various reforms
and transitions owing to the changes in policies, FDIs and FFIs investment. The sector that was
once controlled by the state-owned banks like SBI, PNB, Bank of Baroda, etc. is now opened up
for private players. These private players and ICICI is no exception, faces tremendous challenge,
especially in rural market where the state-owned banks have its wide network. Further, the
globalization invites the foreign players like HSBC, DCB, Citi Bank, and as they are
technologically advanced, they pose further threats.
Increasing NPAs: The health of any banking firm is known by its ability to control NPAs (Non
performing asset). Though the Indian banks have shown tremendous growth and quality
performance, NPAs are still concern for banks. Despite write-offs, NPA have been rising,

THE LEADER AS A STRATEGIST

resulting in eroding profitability.

Environment Analysis
Political Environment:
Political environment of any country deeply affects all the sectors of that country and banking is
no exception. With favorable and stable political environment, the banking sector is able to
mobilize funds more efficiently then otherwise. The unstable political environment jeopardizes
the ability to screen the good from the bad, creating credit risks for the bank. It also affects the
investment due to future uncertainty. One must note that the political instability of the country
affect directly the banking sector in India. Weakness in Indian political system affects the
economic flexibility. Bureaucracy, poor administration, coalition, and power hamper the
resilience of Indias policy-making framework. Coalition politics results into delayed decision
making and implementations due to diversified interest of different political group and come to
an agreement. Despite of all this, there are high hopes with respect to the steps that government
can take to boost up the economy and the banking sector.
Economic Environment:
India's economic flexibility is obstructed by its weak economic structure, with very low per
capita GDP. However, this risk is partially covered with the growth prospectus that India has and
with its characteristic of being a well- diversified economy. It is clear that the fiscal deficit
constraints the governments ability to stimulate growth by fiscal policies. Further, Indian
economy is into expansion mode together with private sector growth. The Indian private sector
has not taken the benefit of Indias absolute credit growth. The increase in private sector credit
has been very nominal over last few years. With the limitation of fund raising options in India,

THE LEADER AS A STRATEGIST

10

banks have provided

Social Environment:
India has been on growth track and banking being an integral part of economy it has to adjust
itself so as to compliment and supplement the growth of the economy. Despite enormous growth,
Indian rural segment have largely deprived with the basic banking facility. Rural market, wherein
fortune lies for any sector, has largely remained untapped. Farmers and small businessman have
to take loans from local vendors. The tech-savvy consumer provides opportunity as well as poses
challenges in the banking system. The consumers are looking for electronic modes of fund
transfer along with the personal touch and experience. In the information age, the young
generation keep themselves updated and makes informed decision. They now take their own
decision and manage their own finances well.
Technological environment:
With the technological advancement, banking has seen vital changes in operations and has now
focused on customer centric approach, universal banking, ATMs, internet banking, interactive
kiosks, core banking, ERP, etc. and improved efficiency and productivity. Banks are now
focusing on cashless, paperless and hassle-free working. Establishment of computers, internet
connectivity, RTGS and NEFT, MICR Cheques, ECS were all significant milestones in past
decade. The continuous advancement in technology changed the way the bank interacts with
consumer. Now, we have the virtual banking concept to roll out in market wherein the products
or services are available only on electronic modes and these are competitively and attractively
priced so as to invite customer to non-branch banking world, thereby reducing costs. With
digitalization of transactions, wireless transfer of funds, paper less culture, etc. the banks have
opportunity of improving the overall productivity, reduce cost and provide better customer

THE LEADER AS A STRATEGIST

11

service.
What I feel about ICICI Bank leadership and culture
The ICICI Bank just doesnt have a set of rules that bind the employees and customers, but a
belief system that guides in everything they do. They are fast and nimble at every customer
interaction is a chance to be friendly, fast and fair in their response to customer, particularly in
their time of need. For the Bank, this attitude is paramount all the time with customers and
partners. ICICI Bank has a commitment to set benchmarks and raise industry standards. They do
this across areas be it product innovation or service quality, customer information or
community welfare. Whatever their domain, job or skill set, each Employee of the company
holds the key to our companys success in his or her hand. It is this belief that drives them all to
scale higher peaks and foray into newer pastures. This is how they build long-term value.
The Bank's environment that fosters teams and their work; allows them to share ideas, pool
resources and ensure the best person is given a chance to do the job. Bank strives to create an
environment that allows every employee to try new things, take smart risks and tolerate honest
mistakes. For us, failures are opportunities to learn. Meritocracy is the foundation of Bank's work
culture it brings out the best in each of them and is the fuel for a winning team.
Out of five leadership model, developed by James Kouses and Barry Posner and described in
their work- The Leadership Challenge (Model the Way, Inspire a Shared Vision, Challenge the
Process, Enable Others to Act, Encourage the Heart) applied to organizational leaders, On the
basis of my personal experience I think it will follow under the Encourage the heart style. In
Encourage the heart style Kouses and Posener described that-Leaders encourage the heart by
Recognizing the Contributions of Others and by Celebrating the Use of Values and Victories.
And during working with ICICI bank I had realized that also. During my first year of job due to

THE LEADER AS A STRATEGIST

12

absent of my senior I have to handle certain critical task of my senior for long time .I have
completed that task under the guidance of my zone leaders. And the end of year I have not
expected that I will be got double promotion and award as young achievers at the first year of my
job and career. When I went to my boos to get explanation for my double promotion, he inform
me that you have done a small job but this job is interlink with another top managements projects
and a small-small efforts of every employee lead to achieve the organization vision. This is the
way they banks every middle level and top level leaders is working.

THE LEADER AS A STRATEGIST

13

References
Narsalay, Raghav; Patrao, Mudeita. Vinimaya. Apr-Jun2016, Vol. 37 Issue 1, p5-15. 11p.
Thomas, Trevor. National Underwriter / Life & Health Financial Services. 4/5/2004, Vol. 108
Issue 13, p31-31. 3/4p.
Ilyas, Shahinda. ASBBS Proceedings 22.1: 225-238. San Diego: American Society of Business
and Behavioral Sciences. (Feb 2015)
Analysis of ICICI Bank Ltd. M2PressWIRE, Dec 29, 2006
Kouzes/Posner : The Leadership Challenge : How to Make Extraordinary Things Happen in
Organizations (5)