This market situation. Ø Threats of substitute: Threat of

This porter’s five
forces are business concept by using this concept people analyze their
business. Harvard business of school professor Micheal E. porter established
this concept in his first article “How Competitive Forces Shape Strategy” in
1979. This concept gives clear picture about business competitiveness and
attractiveness. For that every company can make clear and better strategy. It
helps to know market situations how to handle critical situations of the
organization. Every organization so porter five force.

 

Ø 
Competitors:

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In
the banking industry competition is high so for AIBL competition is high.
Because all the bank provide same type services. There are many bank in the
Bangladesh private and public. Everyone try to give best service and also they
provide all kind of service to the customer. Because here switching cost is
very low any time any customer can switch other bank and that’s why bank don’t
want to lose their customer they are too serious about this. Bank always tries
to keep their customer. All the entire bank have same liquid asset any time
they can give to customer.

 

Ø 
Threats of  new entrants:

Here in the banking industry threat
of new entrants is low. Because entrance in the banking industry is not that
easy central bank take huge amount of money to open bank as a security. There
are lots of bank in the Bangladesh are available in the market and also huge
amount of competition so before opening a new bank they have to think about
market situation.

 

Ø 
Threats of substitute:

Threat of substitution in banking
industry is low. Few years back people used to take small loan from the
different co-operative with high interest rate but now Bangladesh government
and Bangladesh bank imposed rule to the bank to give particular amount small
loans to the people with easy condition and no mortgage. People took loan from
the co-operative like Grammen bank etc but people lost their trust on them. Here
in Bangladesh BRAC bank started mobile banking in Bangladesh and they become
success. On the other hand all the bank started online money transfer system in
Bangladesh for that people can easily transfer money one country to another
country.

 

 

Ø 
Bargaining Power of suppliers:

This is a banking industry, so
money is the raw material for this industry we can consider depositors as
supplier of money. This money supplier depositor has moderate bargaining power.
Any time they can withdraw their money and transfer to another bank without any
cost but these suppliers have no room for bargaining the interest rate, because
this interest rate is set by the authority of Bangladesh Bank. Other equipment
suppliers have bargaining power but they can’t because bank is powerful buyer.

 

Ø 
Bargaining Power of customers:

Bargaining power of customer in
this banking industry is very high. Because customer can switch any time to
other option which is best for them or they can withdraw their money any time
without any reason. Customers don’t have any switching cost. Central bank setup
a rule for that that’s why bank can’t say anything to customer.

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