Yes Bank: Competitive Strategy of a Late Entrant

According to the analysts, the bank's competence in terms of using high-end technology, its 'knowledge banking' approach, and emphasis on highly qualified human resources helped it to differentiate itself from other private banks in an increasingly commoditized market.

In particular, its knowledge banking initiative drew a lot of interest.

The fact that the bank catered to a niche segment of the market with a differentiated strategy meant that it did not have to compete with other banks on price...

The future also posed several challenges as the banking sector was set to open up to the foreign players by 2009.

The banks were gearing up to face the competition. In tune with the developments, Yes Bank wanted to grow into a major bank in India with a presence all over the country.

The bank expected to expand mostly in the small and medium towns, where it saw good growth prospects. The opening up of the economy saw many small towns becoming prosperous, but most of these towns had still not been tapped by the private sector banks...