PORTERS 5 FORCE

BARGAINING POWER OF SUPPLIERS

LOW TO MEDIUM BARGAINING SUPPLIER POWER
Individuals and companies are the suppliers
Supplier concentration not a threat
No differentiation of inputs
Switching cost medium to high

BARGAINING POWER OF BUYER

LOW TO MEDIUM BARGAINING BUYER POWER
Little differential advantage
Buyers price sensitive

Availability of existing substitute product high

Banks offer customer integrated solution to discourage switching

THREAT OF NEW ENTRANT

MEDIUM THREAT OF NEW ENTRANT
Entry barrier high due to capital requirement
Brand equity very important in case of banks
Access to inputs (liquidity) also high
Innovation not important profit driver in banking

THREAT OF SUBSTITUTES
MEDIUM THREAT OF SUBSTITUTES
High brand loyalty and customer relationship
High quality services and lower competitors price encourages switching

Customer retention depends upon price competency, customer services and

maintaining high switching cost

RIVALRY
MEDIUM TO HIGH COMPETETIVE RIVALRY
Banking sector becoming more concentrated, rivalry decreases
Little differentiation
Similarity in strategies
Price competition and slow market growth