Industry Analysis
1. Industry Analysis (80%)
The five force analysis is one of the most recognized frameworks for the business strategy. Porter, the guru of modern day business strategy, used theoretical frameworks derived from Industrial Organization economics to derive five forces which determine the competitive intensity and therefore attractiveness of a market. As Porter's 5 Forces analysis deals with factors outside an industry that influence the nature of competition within it, the forces inside the industry that influence the way in which firms compete, and so the industry’s likely profitability is conducted in Porter’s five forces model. A business has to understand the dynamics of its industries and markets in order to compete effectively in the marketplace. Porter defined the forces which drive competition, contending that the competitive environment is created by the interaction of five different forces acting on a business. In addition to rivalry among existing firms and the threat of new entrants into the market, there are also the forces of supplier power, the power of the buyers, and the threat of substitute products or services. This describes the attributes of an attractive industry and thus suggests when opportunities will be greater, and threats less, in these of industries.
The industry that I have chosen for my five force analysis is the banking industry. I have chosen CIMB Group as the organization of my choice. CIMB Group operates as a universal bank offering a full range of financial products and services, covering corporate and investment banking, consumer banking, treasury, insurance and asset management. CIMB Group offers products and services on a dual banking basis, giving customers a choice of both conventional and Islamic solutions. As a universal bank, it is able to serve everyone from all walks of life in Malaysia as well as throughout the region, including large regional corporations, domestic listed companies, entrepreneurial start-ups,
The five force analysis is one of the most recognized frameworks for the business strategy. Porter, the guru of modern day business strategy, used theoretical frameworks derived from Industrial Organization economics to derive five forces which determine the competitive intensity and therefore attractiveness of a market. As Porter's 5 Forces analysis deals with factors outside an industry that influence the nature of competition within it, the forces inside the industry that influence the way in which firms compete, and so the industry’s likely profitability is conducted in Porter’s five forces model. A business has to understand the dynamics of its industries and markets in order to compete effectively in the marketplace. Porter defined the forces which drive competition, contending that the competitive environment is created by the interaction of five different forces acting on a business. In addition to rivalry among existing firms and the threat of new entrants into the market, there are also the forces of supplier power, the power of the buyers, and the threat of substitute products or services. This describes the attributes of an attractive industry and thus suggests when opportunities will be greater, and threats less, in these of industries.
The industry that I have chosen for my five force analysis is the banking industry. I have chosen CIMB Group as the organization of my choice. CIMB Group operates as a universal bank offering a full range of financial products and services, covering corporate and investment banking, consumer banking, treasury, insurance and asset management. CIMB Group offers products and services on a dual banking basis, giving customers a choice of both conventional and Islamic solutions. As a universal bank, it is able to serve everyone from all walks of life in Malaysia as well as throughout the region, including large regional corporations, domestic listed companies, entrepreneurial start-ups,