Public bank management Essay

1.IntroductionsThe model of the fiver Competitive Forces was certain by Michael E. Porter that becomes an important tool for analysing an organizations industry structure instrategic processes. This model is applicable to the banking industry. universal money box do compete with the different financial entry in Malaysia, however they also must aid with one another in many respects. There is an underlying problem which is the banks in Malaysia be so similar that there is essentially nothing one of them can do that the others cannot easily duplicate2. Five Forces Analysisa. Threats of new entrantsMalaysia has not put a barrier to entry for any financial institution manly banks in Malaysia, thus making it lite for any financial institution to penetrate into the industry.b. bargain power of suppliers a bank has three suppliers of its product, money1. Its depositors has no bargaining power whatever in reality. If they make time deposits the bank lead set the price or interest r ate it will pay. 2. The credit market the credit market as a source of supply of the raw material, money, is exposed 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 effectively the resource of last resort. Apparently, at least(prenominal) for the moment, it will continue to supply liquidity to the banking system in virtually unlimited quantities at actually reasonable make up.c. Bargaining power of buyersIn the banking industry, node have has very limited bargaining power. only the customers may option in changing to other banks that they think is walking a better offer than public Bank.c. Threat of substitute productFor the most part there is no real menace of substitute products in the banking industry. However there probably will be continues evolution ofproducts from paper to electronic in coming years. This is an area of capableness competition for whomever banks that cho ose to use it in their function.d. Rivalry among competitorsloosely all banks offer somewhat the same products and services to their customers, thus there is not much note between earth Banks and the other competitors. This is making the competition much higher. existence Bank is actually stratified as the top banks earners in Malaysia in 2009 alongside with Maybank, Bumiputra Commerce, RHB Capital and Hong Leong Bank.3. Table 1 Method utilize 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 definitely have been more than economically stable and improving, thus financial institution such as Public Bank are needed to aid the overall development of the country. 2. Government policy Encouraging borrowings, loans, investment and consumption demand. 3. Awards and accolades finished recogn ition, Public Bank can project a positive image to their customers 4. Market share Public Bank has the highest market share for the private sector unit trust business, thus having a big customer base.5.Low switching cost Nowadays it is easy for any customer to switch to other banks with just a click away, making the switching 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 interface 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 competition even higher.3. Customer switching costOther than b eing 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 heavy& barriersThere are no barriers that the government put for any legal financial institution to give in in the industry, making any new entrants penetrate into the market share easily.5. Exit barriersHigh fail barriers in the industry are making the competition between Public Bank and the other competitors are even higher.6. ConclusionPorter Five Forces Model are used to identify how the forces affect 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 performance.