Final PPT1.ppt

8/17/2019 Final PPT1.ppt

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Porter’s 5 Force Analysisof Banking Industry

November 12, 2013

Group – 2Abhishek Anand

Aman ChandanAmit KanojiaHabib KhanNayanchand Rao


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Agenda

Case study: HFC Bank

Conclusion

Porters 5 Force !odel – "#er#ie$ %&tructure

Banking Industry – A Glance

5 Forces Analysis of Banking Industry


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Agenda


Conclusion





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&tructure !onopolistic Co'petition

P(ase !aturity

)ay For$ard Financial Inclusion

C(allenges &tringent capitalre*uire'ents to ac(ie#e co'pliance toBasel III +or's

Past Perfor'ance


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Source: Report on trend and progress of Banking Industry by RBI 2012


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Agenda


Conclusion





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"#er#ie$ of 5 Force !odel

,epresents Co'petiti#e en#iron'ent oft(e -r'

&trategic foresig(t to a#oid puttingco'petiti#e edge at risk and ensure

pro-ta.ility of products in long ter' Pro-ta.ility of .usiness $it(in industrial

structure depends on follo$ing forces:

Co'petiti#e ,i#alry $it(in t(e industry

/(reats of +e$ 0ntrants

/(reats of &u.stitute Products

Bargaining Po$er of Custo'ers

Bargaining Po$er of &uppliers


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"#er#ie$ of 5 Force !odel

"ften 'odel is ad1usted $it( t( ForcePu.lic Aut(orities

Because t(e 3a$s and +or's canin4uence porters 5 forces


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&tructure

Co'petiti#e ,i#alry $it(in t(e Industry

&l8+o8

I+F390+C0 B C"!P0/I/I;0 !";0&

1. Lare no. o! "irms Chanin #rices

2. $%o& 'arket (ro&th )m*rovin #rod+cti-erentiation

3. Hih "ied Costs Creative%y +sin channe%so! istrib+tion

/. Hih $torae Costs *%orin re%ationshi*

&ith s+**%iers. Lo& $&itchin Costs

. Lo& Leve% o! #rod+cti-erentiation

. Hih it 4arriers


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&tructure

&u.stitute Products,efers to products in ot(er industry

Products price elasticity is a


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&tructure

Buyer’s Bargaining Po$erI'pact t(at t(e custo'ers (a#e on

industry&l8+o8

Buyers arePo$erful if

Buyers are $eak if

1. 4+yers areconcentrated

#rod+cers threaten!or&ard interation

2. 4+yers *+rchase asini5cant *ortion o!o+t*+t

$ini5cant b+yers&itchin costs

3. 4+yers *ossess acredib%e back&ardinteration threat

4+yers are !ramented

/. 66 #rod+cer s+**%ies

critica% *ortion o!b+yers in*+t


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&tructure

&upplier’s Bargaining Po$erHo$ 'uc( pressure suppliers can place

on .usiness

&l8

+o8

&uppliers are

Po$erful if

&uppliers are $eak

if 1. $+**%iers are

concentrated'any $+**%iers &ithstandardi7ed *rod+ct

2. Credib%e !or&ardinteration threat bys+**%iers

#+rchase commodity*rod+ct

3. $ini5cant cost tos&itch s+**%iers

Concentrated*+rchasers


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&tructure

/(reat fro' +e$ 0ntrants and 0ntryBarriers

+ot 1ust t(e incu'.ent ri#als .ut t(epossi.ility of ne$ -r's entering t(eindustry a


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&tructure

Barriers to entry


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&tructure

Pu.lic Aut(orities Go#ern'ent ,egulations

3icenses

,egulators


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Agenda


Conclusion





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5 Force Analysis of BankingIndustry


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Custo'ers Bargaining Po$er: HIGHBanks pro#ide (o'ogenous kind of

ser#ices

Custo'ers can o.tain all infor'ation

easily

&$itc(ing cost is lo$

&upplier’s Bargaining Po$er: 3")

!a1or sources of &uppliers of capitalCusto'er eposits

3oans fro' Financial Institution

!ortgage .acked securities

Banks (a#e to 'eet regulatory


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Co'petiti#e ,i#alry: HIGHue to presence of large nu'.er of

Pu.lic Pri#ate Foreign and Co>operati#e Banks

Factors !etro?9r.an ,ural

)nd+stryConcentrationratio8'arket$hare9

Lo& Hih

"ied Cost *ertransaction

Lo& Hih

#rod+ctdi-erentiation

Hih Lo&


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A#aila.ility of &u.stitutes: HIGHue to !utual funds />Bills

Go#ern'ent &ecurities and +BFC’s

Banking

&er#ices

Acti#ities &u.stitutes

Lendin Lendin 'oney toearn interest

0: "inance !orCons+mer (oods

e*osit ;akin #eo*%e de*ositmoney !or !+t+re

+se

Ho+sinCom*anies take

de*osits,)nvestment in$tock market <other instr+ments

Anci%%ary $ervices $e%%in )ns+rance,

'" or ")$.

N4"C does same

thin


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/(reat of +e$ 0ntrants: 3")

&etting up ne$ .ank re*uiresappro#al of ,BI

Pu.lic Aut(orities: HIGH

Banking industry is (ig(ly regulatedand 'onitored .y ,BI


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Agenda


Conclusion





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HFC Products % Custo'er&eg'ents


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HFC 3e#eraging /ec(nology


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5 Forces for HFC Bank

&a'e as BankingIndustry


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Co'petiti#e ,i#alry of HFC:HIGH

Co'petition in t(is sector is #ery (ig(.ecause of large nu'.er of pu.licpri#ate foreign and cooperati#e .anks8

Pu.lic &ector Banks: &BI +ationali@edBanks ,egional ,ural Banks

Pri#ate &ector Banks: ICICI A=is

Foreign Banks> H&BC CI/


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Co'petiti#e ,i#alry of HFC :HIGH

!any Players of &a'e &i@e> ICICI A=is

Players (a#e si'ilar strategies

/(ere is not 'uc( di


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A#aila.ility of Product&u.stitutes of HFC > HIGH

/(ere is a (ig( t(reat fro' su.stitutessuc( as

!utual funds

/reasury .ills

Go#ern'ent securities

Post "ce eposits

+BFCs for 3oans % Ad#ances


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A#aila.ility of Product&u.stitutes of HFC > HIGH

/(e relati#e price of su.stitutes> e8g>Post oces o


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/(reat of +e$ 0ntrant for HFC >3")

,BI 3icensing and statutory re*uire'ents

Hig( initial in#est'ents and -=ed costs>5DD cr

HFC Bank reputation and .rand loyaltyof custo'ers

Good net$ork of .ranc(es $it( A/!’sc(annels> E25 Branc(es and A/!s in2D22 Indian to$ns and cities


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&upplier’s Bargaining po$erHFC Bank > 3o$

!a1or sources of &uppliers of capital

Custo'er eposits

3oans fro' Financial Institution

!ortgage .acked securities

/(e po$er of t(e suppliers is largely.ased on t(e 'arket conditions

Hig(er t(e Interest rate – 3o$erBargaining po$er of supplier ,etail

custo'ers

&l8+o8 Custo'ers ,BI as supplier

1. Lo& Hih


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Buyer’s Bargaining Po$er HFCBank > HIGH

Corporate Custo'ers > Hig(

,etail custo'ers > 3o$

If &$itc(ing costs – 3o$

/(en Bargaining po$er of .uyer isHig(

If &$itc(ing costs – Hig(

/(en Bargaining po$er of .uyer is3o$


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Conclusion


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/(ank ou


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Documents

Final PPT1.ppt