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Detailed SWOT Analysis of Indian Overseas Bank – A Major Indian Nationalised Bank

by | Case Studies | 0 comments

The last time we saw the SWOT analysis of Union Bank of India – one of the well known public sector banks of the country. But this time we will explain the SWOT Analysis of Indian Overseas Banks elaborately.

Over the years, Indian Overseas Bank, popularly known as IOB has emerged as one of the leading nationalized banks of our country and part of its success can be attributed to its marketing strategy and having a strong marketing strategy is crucial for any brand to reach its customer base. 

The marketing strategy of the Indian Overseas Bank includes traditional as well as digital marketing. In today’s time, digital marketing is very important for reaching out to customers as everything is shifting towards digital. If you want to learn digital marketing and its scope, do check out Free Digital Marketing Masterclass by Karan Shah, the founder and CEO of IIDE.

Before we dive into the SWOT Analysis of Indian Overseas Bank, let’s take a look at the company, its history, finances, products, and opponents.

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About Indian Overseas Bank

SWOT Analysis of Indian Overseas Bank - Indian Overseas Bank

Indian Overseas Bank (IOB) is a primary Indian nationalized bank. It’s under the title of the Ministry of Finance, Government of India. It was established in Tamilnadu with nearly 3,400 domestic branches, roughly 6 foreign branches, and a representative office. 

Began in February 1937. Ct.M. Chidambaram Chettyar with twofold objectives of specializing in trading business and overseas banking has erected multitudinous milestones within the Indian Banking Sector. During the nationalization, IOB was one of the 14 major banks appropriated by the government of India. It’s one of the two banks advised for privatization by NITI Ayog as per several news reports. As of 31 March 2021, IOB’s total business continues at Rs. 379,885 crores (US$ 50 billion). Indian Overseas Bank is also famous for digital payment transactions among public sector banks.

Quick Stats on Indian Overseas Bank
Founder M. Ct. M. Chidambaram Chettyar
Year Founded 1939
Origin Chennai, Tamil Nadu, India
No. of Employees 23,579
Company Type Nationalized Bank
Market Cap Rs 39,884.09 Crore (2021)
Annual Revenue Rs 22,422.91 Crore (2021)
Net Income/ Profit Rs 831.47 Crore (2021)

 

SWOT Analysis of Indian Overseas Bank - Indian Overseas Bank Services


Products & Services By Indian Overseas Bank

  • Loans
  • Credit Cards
  • Savings
  • Investment Vehicles


Competitors of Indian Overseas Bank

Now that we know the company’s background,  let’s further look at the SWOT analysis of Indian Overseas Bank.


SWOT Analysis of Indian Overseas Bank 

A SWOT analysis infers a company’s strengths, weaknesses, opportunities, and threats in comparison to its competitors. It’s an impressive tool for assuming where the firm grows and where it sputters and determines how the organization may broaden. So, let’s look at the SWOT analysis of Indian Overseas Bank.

To better understand the SWOT analysis of Indian Overseas Bank, refer to the infographic below:

SWOT Analysis of Indian Overseas Bank - SWOT Infographics of Indian Overseas Bank

Let’s proceed further with expanding on the strengths of the Indian Overseas Bank from the SWOT analysis of Indian Overseas Bank.

Strengths of Indian Overseas Bank

  • Located Across Various Locations: The geographic existence in various states works as one of the major strengths of the organization. It infers the business’s reach to the target market and ensures easy accessibility. The locational advantage can boost the competitive positioning of the firm in various paths, such as lower cost, improved accessibility, or enhanced brand vision.
  • Competitive Interest Rates: To draw clients, Indian Overseas Bank maintains its fees at competitive rates. To support the small industries, the interest rates on MSME and agricultural loans, as well as service fees, are kept modest depending upon the economic climate of the country.
  • Frequent Geographical Expansions: Every year, Indian Overseas Bank adds new branches to extend its presence, with a particular emphasis on rural areas to attract new customers and provide basic financial services under the financial inclusion scheme. 
  • Easement of Cash Withdrawals: Indian Overseas Bank also has 3,000+ ATMs situated across the country that one can use for simple transactions without having to go to the branch every time.
  • Presence in Foreign: IOB has overseas branches in Colombo, Malaysia & Sri Lanka which gives IOB a strong advantage over competitors.
  • Customers as Main Priority: They emphasise providing benefits to customers. IOB’s main motive is customer satisfaction that’s why IOB comes up with effective financial solutions and home loan services.


Weaknesses of Indian Overseas Bank

  • Poor Inventory Management: The company may fail due to poor inventory management practices. The scarcity or excessive inventory can either result in cash shortage or inadequate current assets which negatively affect the liquidity position and impairs the overall business performance.
  • Insufficient Budget: Insufficient budget for the marketing and publicity activities reduces the firms’ ability to broaden the customer base and motivate repeat purchases. Less expenditure on research and development activities can weaken the company’s performance due to poor local/international market awareness.
  • Poor Management: The decision-making in the Indian Overseas Bank takes too much time, resulting in expensive delays in introducing new services in the market. Poor project management methods can internally undermine the ability of the organization to successfully unlock new branches or widen the product line.
  • Poor Customer Service: India’s banking industry is fiercely competitive and the bank’s client service is one of its distinguishing features. Indian Overseas Bank has failed to provide excellent customer service. Customers are frequently dissatisfied with the way bank employees respond to inquiries and provide services. Furthermore, online banking services are not sufficiently established.


Opportunities for Indian Overseas Bank

  • Population Growth: The exponential expansion in the population, and especially in the prevailing or potential customer sectors is a great growth chance for the business organization. The shifting of customer needs, tastes, and preferences can work as an opportunity if the business organization has favourable market knowledge.
  • Aggressive Use Of Social Media: The emergence of e-commerce and social media marketing as a fashion can be a great opening for Indian Overseas Bank if it can assure strong online existence on different social media networking sites.
  • Subsidies: The subsidies procured by the government and other policies to make the business environment more helpful are favourable external environmental factors for Indian Overseas Bank. 
  • Transformation in Customers: Lifestyle and standards mean more consumption of consumer goods and services, and more opportunities to facilitate the purchase.
  • Interest Rates: Reduction in the interest rates make fundraising and financing at lower cost simpler for the business organization.


Threats to Indian Overseas Bank

  • Amendments in Regulations: The changing regulatory framework and preface of different stricter regulations assess a major threat to the Indian Overseas Bank. It makes adherence to legal standards more complicated for the business organization. Incapability to adjust to changed regulations increases the risk of expensive lawsuits.
  • Private Sector Banks are Increasing Its Competition: Private sector banks are developing novel investment packages and thereby gaining market share among retail consumers.
  • Economic Crisis: As a result of the economic crisis, clients are not saving money in banks, reducing bank liquidity and making it difficult to operate efficiently.
  • Changing Policies: Banking policies are governed by Reserve Bank of India (RBI) laws and regulations, therefore any changes made by the RBI have a direct impact on the bank’s operations.
  • External factor: The climb in inflation increases the cost of production and influences business profitability.
  • Poor Economic Conditions: The deteriorating economic conditions affect business execution when they directly affect the customers’ spending habits and purchasing power.

This ends our study on the SWOT analysis of Indian Overseas Bank. Let us conclude our learning below.

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To Conclude

Indian Overseas Bank is well recognized and has a substantial global presence. In the SWOT analysis of Indian Overseas Bank, we examined that the bank is trustworthy and also has strong brand recognition. But the main dilemma is that it suffers from the increasing competitors in the market and needs to work on its R&D department. Recognizing and understanding these constraints can further refine the strategic decision-making procedure.

Indian Overseas Bank needs to focus on adopting strong marketing strategies or approaches to build a strong customer base to emerging economies is dramatically changing the banking industry across the world.

With a huge increase in the service industry. There is a very high competition where marketing plays a crucial role-taking advantage of technology not merely in this industry in which every other company is focusing on digital marketing to rise ahead of each other.  If you have the curiosity to learn you may check out IIDE’s 3 Month Advanced Online Digital Marketing Course to know more.

We hope this blog on the SWOT analysis of Indian Overseas Bank has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.

If you enjoy in-depth company research just like the SWOT analysis of Indian Overseas Bank, check out our IIDE Knowledge portal for more fascinating case studies.

Thank you for investing your valuable time to read this, and do share your thoughts on this case study of the SWOT analysis of Indian Overseas Bank in the comments section below. 

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