Religare Presentation - Research Methodology & Marketing Strategy

RELIGARE

In the context of Research Methodology and Marketing Strategies

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.

Religare Enterprises Ltd (Religare) is the holding company for the Religare Group, adiversified 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



Research In Growth PotentialsLife 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

Wealth management

The flourishing economy along with a boom in asset classes has resulted in a largenumber 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

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

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


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.



SWOT Analysis WeaknessesLess 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.

SWOT Analysis OpportunitiesAfter 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



SWOT Analysis OpportunitiesMacro-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.

SWOT Analysis ThreatsDirect 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/



Sustainable Competitive Advantage For ReligareCompetitive 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

Sustainable Competitive Advantage For Religare Competitor analysis -- knowing about competitors

1. Who are ourcompetitors?

2. What aretheir strategies?

3. What aretheir objectives?

4. What are theirstrengths and weaknesses?

5. What are theirreaction patterns?

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

Cost Leadership Differentiation

Focus(Low Cost)

Focus(Differentiation)

MarketScope

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 competitorsBest Example in India• Telecom Industry Players• Chinese Toys• Pharma Companies as Mankind

Sustainable Competitive Advantage For Religare

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

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

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.


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 .


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.


http://study.com/academy/lesson/market-development-examples-definition-process.html; http://www.quickmba.com/strategy/matrix/ansoff/

http://www.quickmba.com/strategy/matrix/ansoff/




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.


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.


Customer Needs

Brand Extension

Technology

Product/Service Development Strategies –


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.


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.


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