Study On Porter 5 Force Model about CITI Bank

1. Industry
Rivalry
Potential
Entrants
( Threat
Mobility )
Buyer
( Buyer
Power)
Substitutes
(Threat of
Substitutes)
Suppliers
( Suppliers
Power )

2. • Low/High ( exceptions ).
• Existing loyalty to major brands
• Huge investments
• Incentives for using a particular buyer ( such as frequent
shopper program )
• High fixed cost
• Scarcity of resources
• High cost of switching companies
• Government restrictions or legislation.
• There is virtually no chance of a new entrants significantly
affecting the major banks’ market share . The only place
that new entrants may have a chance in the industry is
through internet banking, because of its low cost.

3. • Low to medium
• There are very few suppliers of particular
product categories.
• There are almost no substitutes in some
product categories.
• Switching to another ( competitive ) product is
very costly
• The supplying industry has a higher
profitability than the buying industry.

4. • Because of the increasing amount of
technology internet banking will begin to
replace traditional banking, thus cutting
personal cost.
• Incorporating investment banking into the
banking industry as some major companies
are doing

5. • An increase in interest rates causing a decline
in bank activity.
• The collapse of the Fed leading to bank
failures, a repeat of the crash of 1929.
• A decline in the U.S economy leading to a fail
in the value of the dollar, thus causing an
instable economy.

6. • Medium to high
• Large number of buyers
• Purchases large volumes
• Concentration ratio is medium being
international
• Information is easily available to the customer
• Switching to another ( competitive ) product is
simple.
• The product is not extremely important to buyers
: they can do without the product for a period of
time.
• Customers are price sensitive.

7. • Low to medium
• Internet
• If substitutes are similar, it can be viewed in
the same light as a new entrant.
• Presence of companies like Western Union,
Pay Pal, XE.com
• This is not really an issue within the banking
industry, because they aren’t really any legal
alternatives, except buying a safe and
borrowing from a loan shark.

8. • A highly competitive market might result from :
• - many players of about the same size, there
are no dominant firm.
• - Little differentiation between competitors
product and services.
• - A mature industry with very little growth :
companies can only grow by stealing customers
away from the competitors
- Technologically advance companies
- Introduction a new products by competitor.

9. • The banking industry is continuing to
restructure and position it self :
For our changing economy as a result, many mega
mergers have occurred in recent years. Citicorp and
travelers Insurance agreed to merged in April 1998at
a value of $70 billion US dollars. Banks mergers are
usually consummated as a cost cutting measure but
also to compete with non bank providers of financial
services.

10. • Strengthen customer relationship by community
involvement.
• Communicate benefits of online presence clearly.
• Look for acquisition that are compelling strategically and
financially.
• Handle major international operations from India to gain
expenses benefit.
• Position it self as a global bank focusing on Indian
consumer benefit.
• Innovative products in emerging businesses like mortgage,
equity , consumer finance.

11. • www.businessball.com
• Tugher bansode (P904), Sumeet Gupta ( P920)
• Ashray Surekar, Uruti Mehta, Vineet Shahade at el 2011.
PRESENTED BY:
DAMAI YANTHI MARTADISASTRA
NAGARAYAN BALUSAMY
NGUYEN QUANG MINH
SHI YUAN LONG
PHAM THI NGOC TUYEN