Public bank management Essay

1.IntroductionsThe model of the Five Competitive Forces was developed by Michael E. Porter that becomes an important tool for analysing an organizations industry structure instrategic processes. This model is relevant to the banking industry. human beings Bank do compete with the early(a) monetary origin in Malaysia, however they also must cooperate with one some separate in m any respects. at that place is an on a lower floorlying problem which is the banks in Malaysia argon so similar that there is essentially nonhing one of them fag do that the others postnot easily duplicate2. Five Forces Analysisa. Threats of new entrantsMalaysia has not put a barrier to entry for any financial excogitation manly banks in Malaysia, indeed fashioning it easy for any financial mental home to penetrate into the industry.b. Bargaining power of suppliers a bank has threesome suppliers of its product, money1. Its depositors has no bargaining power whatever in reality. If they wanton time deposits the bank will set the price or chase rate it will pay. 2. The credit market the credit market as a source of tack on of the raw material, money, is open to all at all time if they ar qualified participants. The source of supply can be argued to be infinite. 3. The central bank The Central bank is in effect the resource of last resort. Apparently, at least for the moment, it will continue to supply liquidity to the banking system in virtually unlimited quantities at rattling reasonable cost.c. Bargaining power of buyersIn the banking industry, customer have has actually limited bargaining power. However the customers may option in ever-changing to other banks that they think is offering a better offer than man Bank.c. Threat of substitute productFor the most part there is no real threat of substitute products in the banking industry. However there credibly will be continues evolution ofproducts from paper to electronic in attack years. This is an area of potentia l contender for whomever banks that choose to use it in their service.d. opposition among competitorsGenerally all banks offer somewhat the same products and run to their customers, thus there is not much differentiation between everyday Banks and the other competitors. This is making the argument much higher. globe Bank is actually graded as the top banks earners in Malaysia in 2009 alongside with Maybank, Bumiputra Commerce, RHB Capital and Hong Leong Bank.3. hedge 1 Method apply to identify opportunity and threat for Public Bank using external environment factors and industrial environment factors.(Factors under industry environment are derived from Porters Five Forces).4. Opportunities1. Economic growth Malaysia had by all odds have been more economically stable and improving, thus financial institution such as Public Bank are needed to guardianship the overall development of the country. 2. Government policy Encouraging borrowings, loans, investment and function dem and. 3. Awards and accolades Through recognition, Public Bank can project a despotic image to their customers 4. Market serving Public Bank has the highest market share for the private sector unit trust business, thus having a bigger customer base.5.Low thrusting cost Nowadays it is easy for any customer to switch to other banks with just a click away, making the transmutation cost to be faster and cheaper, making it easy for the customers to switch to Public Bank.5. Threats1. Substitute product/service are availableThere is a potential competition to whomever banks that choose to upgrade their product and services to cater to their customers need. Maybank for example provide a customer friendly porthole through their website www.maybank2u.com, and it became the most visited website in Malaysia. 2.Substitute performanceMaybank, Bumiputra Commerce, RHB Capital and Hong Leong Bank are Public Bank competitors and each is recognized for their performance. This will make the competi tion even higher.3. Customer switching costOther than being an opportunity, switching cost can also be a threat for Public Bank as the customers can also easily switch to other financial institution.4. Government legal& barriersThere are no barriers that the judicature put for any legal financial institution to enter in the industry, making any new entrants penetrate into the market share easily.5. leaving barriersHigh exit barriers in the industry are making the competition between Public Bank and the other competitors are even higher.6. cultivationPorter Five Forces Model are used to identify how the forces make believe the attractiveness and profitability of Public Bank, and through this forces, the factors that influence these forces are used in the table 1, to identify Public Bank opportunities and threats. By identifying Public Banks industry environment, the company can improve and sustain their product and services for their customer, ultimately improving their performan ce.