Feb 18, 2000|
ICICI appoints Mckinsey & Co for its internet strategy
ICICI has appointed Mckinsey & Co as consultants to help on its e-strategy plans. This would mean a review of ICICI's existing dotcom strategies and the future course to be taken for new internet related ventures.
ICICI is India's second largest institution, with a major presence in almost all areas of finance. The company has an asset base of Rs 585 bn.
ICICI will decide its course of action based on recommendations given by Mckinsey. Mckinsey will study the course taken by financial service providers the world over and its relevance to the Indian market would then be taken into account. Mckinsey & Co. were appointed as consultants to ICICI's organisational restructuring in 1997-98.
In recent developments, ICICI plans to set up a new holding company for its internet related ventures. This would include its payment gateway, which was recently announced and other e-commerce areas in lines of the US major CMGI Inc. This would help ICICI maximise value from all its internal in-house portals and consolidate all internet related companies in a synergistic structure. ICICI has also announced its joint venture with Satyam Infoway for e-retailing, a web trading portal and an e-commerce payment gateway with Compaq Computers Corporation.
ICICI has been very aggressive on its retail foray and the medium of internet would be extremely useful to it for tapping the growing retail market in India. The cost of delivering products on the internet is lower as compared to traditional ways, hence ICICI will encash on this by providing both financial and non-financial products.
These recommendations provided by Mckinsey will help it to decide with what pace to grow its internet ventures and also weigh alternative options on the net. This stems mainly from the fact that all technology ventures do not mean higher profits. There are cases where technology has not resulted in higher profit margins. Hence ICICI needs to be cautious on this front as its spends on the internet front would be very high and to maximise profits it would need to carefully weigh all available options and use the net to its best advantage. Mckinsey with its international data base would be able to provide a wide range of alternatives.
ICICI has been rated a 'Buy' by many analysts due to its restructuring, its high spends on technology and manpower which has helped it retain quality manpower and its aggressive retail expansion.
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