Porter 5 Forces Analysis

1011 Words May 27th, 2013 5 Pages
Student Name: Dan Kaltz

Date: 10th May 2013

Porter's 5 Forces Analysis of the Retail Banking Industry in Australia
Retail banking can be defined as an industry where financial institutions offer mass market banking in which individual customers use local branches of larger commercial banks. Services offered include savings and checking accounts, mortgages, personal loans, debit/credit cards.
Retail banking aims to be the one-stop shop for as many financial services as possible on behalf of retail clients. Some retail banks have even made a push into investment services such as wealth management, brokerage accounts, private banking and retirement planning. While some of these ancillary
…show more content…
Suppliers – Relative Bargaining Power
Current rating - (Low) - Future Rating - (Low)
The suppliers of capital might not pose a big threat especially when the banks viability was/is guaranteed by the federal government during the height of the GFC.
On the labour side, the threat of union interruptions is very low to non-existent. The banks have been quite clever in moving a lot of the front line staff offshore though call centres to ensure that the labour supply is cheap and sustained. This is further supported by the huge uptake of online banking by customers.

Buyer – Relative Bargaining Power
Current rating - (Low) - Future Rating - (Low) The individual doesn't pose much of a threat to the banking industry, but one major factor affecting the power of buyers is relatively high switching costs. If a person has a mortgage, car loan, credit card, checking account and mutual funds with one particular bank, it can be extremely tough for that person to switch to another bank. In an attempt to lure in customers, banks try to lower the price of switching, but many people would still rather stick with their current bank. On the other hand, large corporate clients have banks wrapped around their little fingers. Financial institutions by offering better exchange rates, more services, and exposure to foreign capital markets - work extremely hard to get high margin corporate clients.

Industry Attractiveness
One can conclude based on the outcomes of this analysis, that the