Competitive Behavior Competitive behavior plays an essential role in the process of making pricing decision for global marketer. Merriam-Webster (2015) defines competition in business as the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms. Meanwhile, according to Richards L., pricing strategies must be devised to represent the value of the product, the perceptions of customers and a relative position against other competitive alternatives available in the market. The results of the pricing strategy will not only depend on consumer response, but also on the reaction of competitors. For example, if competitors do not adjust their prices in response to rising costs
Understanding Porter’s five forces tool Competitive rivalry This force examines the intensity of current competition in the target marketplace, the most important issue her is the number and capability of the company’s competitors. If the firm faces many competitors who equally offer attractive products or services, then the firm will most likely have little power within the marketplace as suppliers and buyers will go elsewhere if they don’t get a better deal. When rivalry competition this can result to hurting the company’s bottom line through high advertising and prices. Threat of new entrants This force gives an insight on the ease or difficulty of the firm’s competitors to join the marketplace, where the costs of time or money to enter the marketplace are low, if there are few economies of scale in place, or if the firm has little protection for its key tech-nologies, then the firm’s position in the market place can be quickly weakened by new entrants. Threat of
allow an increase in profitability : should allow the company to have an increase in profitability that at least reaches placed above the average profitability of the sector or market. be sustainable over time : it should be able to stay in the medium or long term; for example, a technology able to adapt to market changes and not one that will shortly become obsolete. be elusive or even : to be elusive or even by the competition; for example, a product difficult to imitate by competitors due to its unique components. The idea of the concept of competitive advantage is that a company must constantly seek obtain, maintain that or those who already have, and make the most of, if you want to achieve a better performance than other competing companies, and thus have a position competitive in the sector or market. There are several ways to gain a competitive advantage, but the two main ones are looking for a cost leadership (a comparative advantage or cost advantage), and seek a differentiation (a differential
EMERGING CHALLENGES: Technological changes in Indian banking system presents great opportunities and challenges for the banking industry. The primary challenge is to give consistent service to customers irrespective of the kind of customer. Different banks can differentiate their services by offering more technical facilities. Developing or acquiring the appropriate technology for the product, deploying it efficiently and then managing it to the extreme level is important to achieve and consistently providing high service and optimal standards while remaining economical and delivering sustainable return to shareholders. Leveraging technology is therefore, a key challenge that will be faced by the Indian banking sector.
Then, we address the concept of strategic groups, which demonstrates that even within an industry, it is often useful to group firms on the basis of similarities in their strategies. Firms within a strategic group tend to react similarly to external events, and competition tends to be more intense among firms within a strategic group than between strategic groups. Porter 's Five-Forces Model of Industry Competition The "five forces" model developed by Michael E. Porter has been the most commonly used analytical tool for examining the competitive environment. It describes the competitive environment in terms of five basic competitive forces: 1. The threat of new
According to Lee and Kim (2007) mobile banking services have managed to provide freedom of time along with cost savings to its users and room for market growth for the service providers. The mobile phone menu and other extra up to date applications can now connect bank systems to the phone network, hence introduction to more user friendly interfaces. Consumers can now enjoy financial services anytime
Michael Porter identify five competitive forces: 1. The threat of new entrants. 2. Rivalry among existing firms. 3.
IT has benefitted all the sectors, including the financial sector, especially banking industry. Increasing competition has affected the banking environment too. Banks have to face a tough competition with other banking industry participants and competitors