Universal Banking: Five Forces Analysis Of Deutsche Bank

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5 FORCES Five forces analysis below will mainly focus on commercial banking and investment banking (universal banking) rather than retail banking due to major business activities of Deutsche bank are focused on universal banking. 1. The Bargaining Power of Suppliers There are two types of supplier in universal banking industry which are depositors and employees. Depositors are the one who supply the primary resource of capital and employees who supply the resource of labour (Maverick, 2016). Depositors (Capital Term) Depositors are people who keep money in a bank. They will compare the financial product of different banks and to make decision whether they are willing to draw out capital to the bank. Compare with big corporate or High-net-worth…show more content…
Bargaining power of the suppliers (employees) depend on their expertise, specialize and their number in company. The greater the delivery (contribution of employees) to a company, the greater the power of suppliers. The smaller the market and competition for the supplier's products (employee's knowledge), the greater the power of suppliers. (Mariaumran, 2014). The more specialized the suppliers, the greater the dependence of a company. Individual suppliers have little bargaining power other than major executive employees. Normally, the company in this industry will address its overall bargaining power by offering attractive salary and benefit packages to retain the best employees. Besides, comparing Deutsche bank to other US companies operate in EMEA region, the bargaining power of suppliers of labour in Deutsche bank is smaller. Figures in Table A2 below shows how the US investment banks apply the hub and spoke model in their European operations. The large London head office contains the majority (more than 80%) of investment bank’s financial experts and traders, with some further specialists based in Frankfurt and/or Dublin (less than 10%).They have no suppliers in the smaller markets, such as Austria, Finland, Portugal and the Baltic States.(DIRK SCHOENMAKER,…show more content…
If any operation shut down happen due to regulatory issue, labour strike or any disaster in London, it will be extremely difficult for the smaller branches such as branches in Dublin and Frankfurt to support the operation and ensuring normal operation was conducted without any issues. Figure above shows the number of employees on a full- time equivalent (FTE) basis in Deutsche Bank. Unlike Deutsche Bank, there are total 70% of employees in EMEA market. 66% of them are based in Germany and 34% of them are from different part of countries in EMEA(Deutsche Bank, 2015). In this aspect, bargaining powers in Deutsche bank will much more lower compare to US banks in EMEA market. In conclusion, for Deutsche bank, depositors will have more bargaining power than employees as depositors in universal banking are normally big corporate or High-net-worth individual (HNWI) depositors. The overall bargaining power of suppliers can consider medium for Deutsche bank. 2. The Bargaining Power of
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