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1. Project objective
The objective of this project is to describe the business strategies implemented by HDFC, the leading housing finance company in India from inception and to analyze the same using strategic management techniques.
The first five sections of the document explains the inception, market structure, competitive strategies used, people management and challenges faced by HDFC. This is followed by the last chapter which analyses HDFC from a strategic management point of view.
The source of information is Internet and cases from Harvard on HDFC.
2. Inception and Philosophy
2.1. Conception, Business Risks and Equity Capital
H.T. Parekh conceived the idea for HDFC (Housing Development Finance Corporation) when he was a student at the London School of Economics in the 1930’s. The inspiration for such an idea came from Britain’s building societies and he envisioned something similar for India. However it took almost 50 years to pursue his dream and founded HDFC in 1977. Prior this he worked for ICICI (Industrial Credit and Investment Corporation of India) and retired as the Chairman of the company. Parekh’s contemporaries questioned his plan and the main concerns to business were:
1. People’s widespread aversion to debt in India
2. Poor retail lending records of India’s nationalized banks
3. Inability of India’s legal system to enforce either a foreclosure or a loan payment
Nevertheless Parekh persisted. HDFC was founded in October 1977 with initial share capital of Rupee (Rs.) 10 crore. Equity contributions came from the International Financ ...