Porter's Five Forces Of Industry Analysis Model

Case Study - Risk Analysis

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Introduction

The Inter-American Development Bank is one of the thriving banks in the United States. The bank, however, has had many problems in the management of its affairs. On the face of facts, the bank has many branches throughout the United States. The central management of the affairs of the Bank has proved futile of late. Management of the conglomeration of this chain of banks has posed a problem. The integration of information technology management into the system has failed. In essence, the monitoring of employees has proved futile. There have emerged instances of customer dissatisfaction in the services offered by the said bank.

Monitoring of employees by the use of

In the model developed by Porter, the five forces include competitive rivalry, bargaining power of suppliers, bargaining power of consumers, the threat of entry by new competitors and the finally threat of substitution of products or services.(Grundy, 2006)

A. Competitive Rivalry

The competitive rivalry as force endeavors to examine how intense the competition currently is in the competition market and is determined by the number of existing competitors and their varied capabilities. Rivalry competition is at the peak when there are reduced businesses equally offering a similar product or service. Again, competitive rivalry is manifest when the industry is growing, and consumers can easily move to other competitors offering the product or service for a little cost. Notably, when rivalry competition is so immense, even advertising and price wars can follow, which can hurt a business 's substratum. Importantly, measurement of Competitive rivalry is achieved using concentration ratio. Linking this kind of force to the present case study is necessary. Of course, many banks in the United States do offer services that are in one way or the other similar to the present bank. Customers are likely to migrate to banks that are likely to offer the same services at considerably reasonable terms or quite

Generally, the easier it is for a competitor to join the market, the elevated the risk of an enterprise’s market share being erased. There exists barriers business’ entry into the market place and include absolute cost advantages, the access to inputs and well-recognized brands. It is fundamental that the bank designs a well-fashioned IT system that would outdo its competitors. For example, the bank should embrace online banking methods that other banks have not invented yet. Eased online banking is likely to impede other business of the same kind into the banking