All organizations have got a set of forces and conditions outside their own boundaries that have the potential to affect the way the organization works. MoreMoney Banking Corporation Limited is no exception to this as it has got forces that it has to operate within. Michael Porter came up with the Five Forces Model commonly known as Porters' Five Forces Model which is used for analyzing an industry by looking at five forces believed to be at play in an industry and affecting how that industry works and providing an indication of its attractiveness. The five forces are:
Rivalry among competing sellers in the industry
Bargaining power of suppliers
Bargaining power of customers
Threat of substitutes
Barriers to entry
The following is an analysis on the business environment in which my organization, Intermarket Banking Corporation Limited is operating in.
Intensity of rivalry
Rivalry is the jockeying for position and buyer favour that goes on among rival firms.
Competition in the Banking sector has significantly increased over the years as there are more and more players coming into the field. The customer base has not been increasing at the rate at which the financial institutions are increasing hence the stiff competition amongst the players. This has been contributed by the fact that generally all banks offer a suite of products which are similar in nature and as far as the relevant market shares are concerned, there is really no difference between Bank A and Bank B. There are very minimal costs that are incurred if clients decide to switch between banks. This alone has increased the jockeying for position amongst the Financial Institutions. High fixed costs are associated with opening a new Bank as minimum capital required by the Central Bank is prohibitively high. This is associated with the difficulties...