What Are The Porter's Five Forces Of Banking Industry

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SITUATION ANALYSIS Below are Malaysian banking industry’s external environment assessment using Porter’s 5 Forces Analysis. For the purpose of this assessment, 4 top-in-the-league existing domestic banking groups in terms of asset size have been chosen i.e. Maybank Berhad, CIMB Bank Berhad, Public Bank Berhad, and RHB Bank Berhad. All 8 domestic banking groups have operations in all the 3 segments of banking businesses namely Commercial, Islamic, and Investment bank. Upon analyzing and assessing their immediate surroundings, the banking groups recognize the following important factors that would impact on their competitiveness. THREAT OF RIVALRY AMONG EXISTING FIRMS - HIGH • Too many players in the industry - Each banking group has to contend…show more content…
This allows customers to make smart choices from a wide selection of banks or other non-bank financial intermediaries and thus hold high bargaining powers. For the record, as at June 2016, the number of Internet users in Malaysia has exceeded 21.0million, with about 19.0million being active on social media, while broadband penetration rate has reached 67.7% (Internet World Stats). • Banking industry in Malaysia is rather saturated and the players are struggling to win over businesses amidst decreasing growth in customer base. As competition further intensified, banks will go the extra mile to provide exceptional service to its customers so that they would choose to have a relationship with them over the competition. Great service is the bedrock for creating customer loyalty who will soon spread positive remarks through word of mouth to help boost a particular bank’s…show more content…
Furthermore, with consolidation between banks, major banking groups seek to serve all of a customer’s financial needs under one roof. This consolidation furthers the role of trust as a barrier to entry for new banks looking to compete with major banks, since customers are more likely to allow one bank to hold all their accounts and service their financial

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