CREDIT SUISSE GROUP AG: STRATEGYStrategic Management (STMT)Prof. Mahesh Narayan Goutham K STerm 32011-13 11214 Goutham K S 1
Headquarters Zurich, SwitzerlandYear of 1856foundationEmployees 49,700Reach 405 offices in 55 countriesListings SIX(Switzerland) and NYSERatings Standard & Poor – A Moody – Aa2 Fitch - A Goutham K S 2
Our aspiration is to become one of the worlds mostadmired banks. We believe our ability to serve clientsglobally with solutions tailored to their individual Visionneeds is a strong competitive advantage.We pursue a client-focused integrated bankstrategy, focusing on complex client needs andvalue-adding businesses, leveraging the global Strategyexpertise of our three divisions, PrivateBanking, Investment Banking and AssetManagement.Building on the momentum we have established, weaim to further grow our client business with gains inmarket share and a strengthened geographic Prioritiesfootprint. Goutham K S 3
Political EconomicalAntipathy towards foreign • Recessionary phasebanks • Stringent economic policies worldwide – Basel III Social TechnologicalEmerging economies uses Leveraging of technologynon-banking financial services for banking solutions Goutham K S 4
Strengths Weaknesses• Part of ‘bulge bracket’• Strong franchises in core • Poor publicity and brandbusiness visibility• Sufficient liquidity and strong • Low performance in investmentcapital base banking• Wide global reach • Weak expense management• Merger of private banking impacting marginsoperations SWOT Opportunities Threats• Growing forex market • Global economic• Buoyant Asset management slowdown, especially Europe’s• Expansion in emerging •Stringent economic policies overeconomies the world • Intense industry rivalry Goutham K S 5
• Strong franchising can help in entering emerging SO economies • Strong capital base can aid in capturing growing forexStrategy market and buoyant asset management ST • Good position in liquidity and capital base can help pass through recessionary phaseStrategy WO • Better publicity can be used when entering new market • Low performance of the company is in Investment BankingStrategy but asset management and forex market is growing WT • Recession and/or intense competition coupled with weaker control cost should not drain away the revenuesStrategy Goutham K S 6
- High for low brackets and low Threat of for higher brackets. - Many entrants after Entrants liberalization policies across globeHigh. Some of Low due tothe divisions of -Good sense of Industrybanking are Suppliers Buyers brand loyalty competitorsmainly based on - Qualityrelationships conscious Intense rivalry impacting margins High due to non- Threat of banking finance Substitutes companies offering similar services Goutham K S 7
Porter’s Diamond with context to India Numerous public sector Credit Suisse is located banks, and private sector in India at Mumbai and Firm Strategy banks post liberalization New Delhi and Rivalry- Robust and - Rise of High netstable market Factor Demand worth companies- Antipathy of RBI conditions conditions and individualstowards foreign - Unexploredbanks financial inclusion services Related and supported Mature capital industries market – BSE & NSE Goutham K S 8
Lower Cost Uniqueness Broad Position of Target Credit SuisseGeneric Competitive ScopeStrategy Narrow target Competitive Advantage Goutham K S 9
Size of the box is proportional tosignificance level of function Firm Infrastructure Human Resource Technology Development Operations Marketing Service & Sales Goutham K S 10
Horizontal Strategy 1978 Strategic alliance with First Boston 1987 Acquisition of stockbrokers Buckmaster & Moore 1988 Controlling stake in First Boston 1990 Acquisition of Bank Leu 1993 Acquisition of Swiss Volksbank 1994 Strategic alliance with Swiss Re 1995 Strategic alliance with Winterthur group 1997 Merger with Winterthur group 2000 Acquisition of Donaldson, Lufkin & Jenrette 2006 Divests Winterthur and retires First Boston affiliation Goutham K S 11
One Bank ModelWhat ? Investment Banking, Wealth management, AssetManagement and Private Banking all under one roof.When ? Adopted in 2006Why ? One stop solution for Ultra High Net worth (UHNW)businessesHow ? Referrals from one division to another. e.g. Investmentbanking division refers its client of M&A to private banking divisionRisky ? Yes, especially during downturns. Probably onlysuccessful company using this model. All its Competitors haveseparate divisions. Goutham K S 12
Branding Advertising initiative was taken to shed its poor visibility 2001-2005: Majority shareholder in Sauber F1 team 2006-2009: Active Sponsor of then BMW-Sauber Sponsor of Switzerland national football team Sponsor of Roger Federer Goutham K S 13
References Twww.credit-suisse.com H E E N D Goutham K S 14
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