Using Porter's Five Forces to Analyze Barclays

The banking industry has undergone major upheaval in recent years, largely due to the lingering recessionary environment and increased regulatory environment. Many banks have failed in the face of such tough environmental conditions. These conditions

It is recommended that Rhand Credit Union Co-operative Society Limited use this model to find a position in the financial services industry where it can defend itself against competitive forces or it can influence its competitors in its favour as well as identify key success factor (KSFs) in the industry.

There are various categories of banking; these include retail banking, directly dealing with small businesses and persons. Commercial and Corporate banking which offers services to medium and large businesses (Koch & MacDonald 2010). Private banking, deals with individuals, offering them one on one service. The last category is investment banking. These help clients to raise capital and often invest in financial markets. Most global banking institutions provide all these services combined. With all these institutions in existence within the same localities and offering similar services, there is a need to regulate the industry so as to protect the consumer and provide fair working environment for all banks (Du & Girma, 2011).

As relevant to these competitive forces, the common and mutual goal of companies can be explained as better profitability with a greater market share against their rivals. Therefore, implementing Michael Porter’s Five Forces can help the companies determine the issues that may impact the company’s profitability in the long term.

Porter’s Five Forces was next used to determine the competitive environment. The Five Forces method is used to determine a company’s profit potential for a particular industry.

Porter’s Five Forces was developed in 1979 by Michael Porter as a framework to assess and evaluate the competitive position of a company in an industry. It is based on the theory that there are five forces which identify the attractiveness and competitive strength of an industry. It is helpful to gain an understanding of a firm’s current positon and the position that the firm may look to capture in the future. Porter’s five forces are also used to

Along with the greater profitability restrictions imposed on banks from the Dodd Frank comes the banks will for greater cost management, meaning job cuts. Already the Banks have begun laying employees off from burdening restrictions leading to this brutal method of retaining necessary capital needed for operations ("Wall Street Journal"). The bigger the bank, the greater resentment they have over this act. Their financial statements will have to retain a greater amount of compliance and transparency as well. Because of the large prominence of “shadow banking” and the concealed balance sheet elements that came along with this practice, the banks now are imposed with greater regulation to prevent these stealthy tactics of borrowing and investing. These restrictions, in my belief, will provide greater protection to the consumer but will also provoke institutions to begin innovating financial instruments to get around barriers, just as they did in the past with interstate banking and early consolidated services even before Glass-Steagalls act. The bankers oppose the act due to their cut in profits. Reduced outlets in revenue from specific revenue generating activities have been capped and larger expenses in order to comply with the new rules have also greatly cut profitability. The same notion is held with brokers. Because of the greater compliance costs served

At its core, Porter’s 5 forces describes a firms overall ability to compete in a market. We discuss our analysis of the 5 forces and how they affect SAS Corporation and its stakeholders. Please examine Figure 1.1 to view a diagram that depicts the 5 forces.

Barclays also operates in many other countries across the world, where it is a provider of services to multinational companies and financial companies. “The Woolwich” and “Woolwich” are trading names that Barclays operates under, and through these Barclays delivers banking solutions to UK retail and business banking customers. Barclays serves its customers through a variety of channels comprising the branch network, cash machines, telephone banking, and online banking and relationship managers. Key employees =

Extensive research has determined that the banking industry is in an unstable state. The industry’s profits have

The banking industry is highly competitive. The financial services industry has beenaround for hundreds of years and just about everyone who needs banking servicesalready has them. Because of this, banks must attempt to lure clients away fromcompetitor banks. They do this by offering lower financing, preferred rates andinvestment services. The banking sector is in a race to see who can offer both the

Porter’s Five Competitive Forces Analysis is a framework developed by Michael E. Porter of Harvard Business School for study of industry analysis by analyzing five competitive forces which define industry and its business strategy. These five competitive forces determine the competitive advantages, disadvantages and attractiveness or profitability of industry.

Barclays as a financial institution has established itself as a major player in the global financial services and banking sector. The company has spread out from its native UK to the rest of the world and its presence in developing regions of South Asia and Africa is massive. Barclays has become a global player in the market for financial services and may continue to grow even further as the years go by.

According to group´s performance from 2002-2006 identifies that Barclays´ performance underpinnings are represented by its strategy of acquiring other banking (such as ABN Amro and Banco Zaragozano) concerns to expand its retail as well as other banking services through representation in international markets as represented by the bank’s presence in 60 countries. This provides Barclays with the means to sell its highly profitable investment banking services as well as be positioned to service the cadre of multinational companies that utilize its diverse banking financial service packages.

Private banking industry has changed in a very basic way, driven by many key factors such as: free competition systems, modern developments in information technology (in particular, developments of the internet), and changing demographics. Private banks now operate in an environment shaped by increasing and shifting regulations, and in markets influenced by the uncontrolled situations of the world economy and geopolitical issues.