Porter's Five Forces Analysis: Kotek Mahindra Bank

PORTER’S FIVE FORCES:

Porter 's five forces analysis is a framework that attempts to analyze the level of competition within an industry and business strategy development. It draws upon industrial organization economics to derive five forces that determine the competitive intensity and therefore attractiveness of an Industry.

The components of the banking sector were analyzed so as to acquire efficacious means of discovering an advantage in the fierce competitive environment.

Supplier Power:

• Increased Dependence on IPOs

• There is a growing dependence of corporate on broking houses with the rising number of IPO’s coming to the market.

Buyer Power:

• Lack of Expertise Curtails Bargaining Power

• Retail investors often lack the knowledge

Barriers to Entry:

• Entry of Foreign Players

Threats of New Substitute:

• Alternative Investment Options

• Various alternative forms of investment act as substitutes to retail broking products and services.

With the aim of making analysis of the bidding environment within which Kotek Mahindra Bank operates Porter’s five forces was used as shown:

• There is low bargaining power of suppliers due to RBI stringent regulations.

• The bargaining power of buyers is high as a result of the diverse banking services.

• The threat of new entrants is low since the banking industry is capital intensive.

• There is high threat of substitutes because there substitutes like mutual funds.

• Competitive rivalry is high because of many players in the

A model that attempts to explain the competitive advantage some nations or groups have due to certain factors available to them. The Porter Diamond is a model that helps analyze and improve a nation 's role in a globally competitive field. The model was developed by Michael Porter, who is recognized as an authority on company strategy and competition; it is a more proactive version of economic theories that quantify comparative advantage for countries or regions.

The interconnected factors for sustained competitive advantage are as follows:

• Firm Strategy, Structure and Rivalry

• Factor Conditions

• Demand conditions

• Relating and Supporting Industries

Firm strategy, structure and rivalry:

• Organisational goals can be determined by ownership structure.

• Unquoted companies may have slightly longer time horizons to operate in because their financial performance is subject to much less scrutiny than quoted companies.

• They may also have different 'return on capital '