Blue Ocean Strategy - Retail Bank

Topics: Bank, Variable cost, Costs Pages: 1 (339 words) Published: June 23, 2012
Blue Ocean Strategy: Blue Ocean Strategy is not about out-performing the competition in the existing industry, but to create new market space or a blue ocean, thereby making the competition irrelevant.

In the assignment we will try to analyze the success of Yes Bank through the framework of Blue Ocean Strategy

1. Value Innovation: Value innovation is the simultaneous pursuit of differentiation and low cost. Yes Bank, which started in 2004 without any institutional, has a formidable task to succeed in environment that was led by established bank. Yes Bank took the industry by surprise when it allowed customers to withdraw money from other banks ATM with no surcharge even before the policy came in. As the bank grew it outsourced the ATM installation and running to NCR moving from fixed cost to variable cost. It also outsourced its entire technology to Wipro thus freeing it from capital expenditure. By Outsourcing the technology it bought the cost down and created a differentiation in how infrastructure is managed by banks.

2. Tipping Point Leadership: To change the mass it focuses on transforming the extremes: the people, acts, and activities that exercise a disproportionate influence on performance. Yes Bank has grown with entrepreneurial mindset supported by the top leadership. At the onset employees are encouraged to come up with new idea for everyday problems and new business. The YPEP program focuses on identifying the top talent that help the firm to come with new possibilities. The Bank has BELT team which act as mentor to all the employees at the firm. Bank has used Knowledge banking route which focuses on hiring sector experts rather than traditional bankers thus helping build strong customer relationship

3. Non-customers: Yes bank targeted customers who were not traditionally supported by banks. Thus it started Honey farming, microfinance direct – the first for any bank and focused on knowledge banking by hiring sector experts...
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