I would like to express my gratitude to Oriental Bank of Commerce for giving me the opportunity to work in their esteemed organization and help me learn about the treasury operations of the bank. I am greatly indebted to Mr. Taufique Alam, my mentor at Oriental Bank of Commerce for his guidance and supervision as well as providing me necessary information regarding the project. I would also like to thank Mr. Sanjay Pareek and Mrs. Sonal Sethi from the Treasury department for their cooperation and support in aiding me to complete my report.
I am also grateful towards Prof. Rohit Malhotra, my guide at Indian School of Business and Finance, whose valuable inputs helped me in the completion of the project. In the FMCG sector competition is very fierce. There are scarce customers because the industry is highly saturated and the competitors try to snatch their share of the market. The market players use all sorts of tactics and activities from intensive advertisement campaigns to promotional activities, price wars etc. Hence the intensity of rivalry is very high.
1. Barriers to entry The FMCG sector does not have any measures which can control the entry of new firms. The resistance is very low and the structure of the industry is so complex that new firms can easily enter and also offer tough competition due to cost effectiveness. Therefore potential entry of new firms is highly viable. 1. Threat of substitutes There are complex and never ending consumer needs and no firm can satisfy all varieties of needs alone. There are plenty of substitute goods available in the market that can be replaced if the consumers are not satisfied with them. The wide range of choices and needs give sufficient room for new product development that can replace existing goods. This leads to higher consumer expectations.
1. Bargaining power of consumers In the FMCG Sector the bargaining power of consumers is very high. The major competitors have to work hard to meet the expectations of consumers. From the consumers’ point of view the cost of switching brands is low. Therefore there is a large proportion of brand switchers in the FMCG sector. 1. Bargaining power of suppliers The bargaining power of suppliers of raw materials and intermediate goods is very low. There is ample number of substitute suppliers available and the raw materials are also readily available and homogenous. There is no monopoly situation from the supplier’s side because there is intense competition among them too.
The report gives an insight into how banks conduct their domestic and forex treasury operations in accordance to RBI/FEDAI/FIMMDA guidelines. It aims at understanding the liquidity management activities by banks, the three major categories of investments (Available for Sale, Held for Trading, Held till maturity), commercial papers and the constituents under SLR and Non-SLR securities. The forex operations of the bank are also explained along with the concepts of hedging and speculation.
The report also gives a brief overview of FMCG sector in India along with its growth over the past few years and its future prospects. The analysis of the industry has been achieved through comparisons with other industries and SENSEX, Five Forces Model, BCG matrix, PEST analysis and SWOT analysis. The fundamental and technical analysis of two of the main players of the FMCG sector (Britannia and Colgate) has been done by observing their progress over the past 4 to 5 years and by using various techniques and tools like ratio analysis, candlestick charts, discounted cash flow technique and Bollinger bands. Britannia is the market leader in the biscuit industry in India and Colgate Palmolive is the leader in the oral hygiene market in the country. All these tools have aided in decision making regarding whether the concerned company will be able to sustain its growth in the near future and if it is ideal to invest in their stocks or not.