Yes bank : Competitive Strategy of a late entrant

Yes bank had experienced unprecedented growth in the Indian banking sector since it started
operations in late 2004. When Yes bank entered the arena of banking there were already many
public and private sector bank dominating. But the bank used an effective differentiating
strategy to differentiate itself. The bank differentiated itself from other players in the industry
through its unique ‘knowledge banking approach’, emphasis on technology and human
resources. The knowledge banking approach was its main pillar of differentiation and using this
it provided specialized services to various emerging industries through domain experts. This
helped in building CRM. It also used latest technology available in the industry to provide highly
innovative solutions. This provided high level of security in terms of data sharing and users
those who are using bank’ s system. Its strategy of outsourcing information IT infrastructure to
proven experts in the field not onlt helped it to provide superior service to its customers but
also to reduce costs and focus on its core activites. Recognizing the human resources were a
source of sustainable competitive advantage, it strove to differentiate itself from its
competitors by adopting some winning HR practices. Several new initiatives like giving the
employees the freedom to work in the field of his/her own specialized interest and the
independence to take initiatives .
The bank carved a niche market for itself in specialized corporate services like mergers and
acquisitions, financial restructuring, currency risk management. It also focused on providing
wealth management services to affluent customers. It was much later bank entered in to retail
banking arena.
Despite being a late entrant, Yes bank established itself as one of the most efficeient bank in
the country by adopting internation standards for the quality of services provided to customers
through its operational efficiency.
the bank was growing at a fast pace since the beginning. The bank’s business size was Rs 800
million in December 2006 . this was significantly higher than the growth reported by other
private sector banks with the same background. The bank focused maily on Business Banking
and small and medium enterprises for its growth.
Though Yes bank was a late entrant in the banking industry . it made it established by catering
to to a niche segment of market with a differentiated strategy meant that it did not have to
compete with other banks on price. It had the opportunity to cross sell its no. of product and
services to this niche. When Yes bank entered the situation had changed from slowdown to
growth which indirectly helped the bank.
However the success achieved by the bank in the short term had to be replicated in the long
term is still a serious question.