THE EFFECT OF PORTERS 5 FORCES MODEL ON BRAMER BANKING CORPORATION LTD I i c u d o r t n Porters 5 forces model can be defined as a framework

for analysing the nature and extent of competition in an industry. The banking industry in Mauritius is a very competitive sector and thus banks are finding new ways and means of gaining greater market share. This can bedone through product differentiation, pricing and different marketing strategies amongstothers. However, since the banking industry is a group of firms providing for the same typeof products and services aimed at same customer group, it is then of vital importance for managers of particular banks to understand the competitive forces in that industry. Thus, Porters 5 forces model are as follows :1. Threat of new entrants/competitors2. Threat of substitutes3. The intensity of competition among existing firms4. The bargaining power of buyers5. The bargaining power of suppliersIf all of those factors are high, then the industry is not attractive to enter in. Therefore, to better understand Porters 5 competitive forces analysis, it is being applied to the Bramer Banking Corporation Ltd.

Threat of new entrants It is not only incumbent rivals that pose a threat to firms in an industry; the possibility thatnew firms may enter the industry also affects competition. In theory, any firm should be ableto enter and exit a market, and if free entry and exit exists, then profits always should benominal. In reality, however, industries possess characteristics that protect the high profitlevels of firms in the market and inhibit additional rivals from entering the market. These are barriers to entry. Barriers to entry may be low or high implying the fact that if the threat of new entrants is high, there are low barriers to entry and vice-versa. However, threats of newentrants might be the only force that will have a low score. This is due to the fact t