Financial Services industry - Five Forces Analysis

Financial Services industry - Five Forces Analysis

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Short description of Porter's Five Forces analysis for… Western

Intensity of Existing Rivalry

Relatively few competitors (Financial Services industry) Few competitors mean fewer firms are competing for the same customers and resources, which is a...
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Low storage costs (Financial Services industry) When storage costs are low, competitors have a lower risk of having to unload their inventory all at...
Fast industry growth rate (Financial Services industry) When industries are growing revenue quickly, they are less likely to compete, because the total...
Large industry size (Financial Services industry) Large industries allow multiple firms and produces to prosper without having to steal market share...
Exit barriers are low (Financial Services industry) When exit barriers are low, weak firms are more likely to leave the market, which will increase the...
Government limits competition (Financial Services industry) Government policies and regulations can dictate the level of competition within the industry. When...

Bargaining Power of Suppliers

High competition among suppliers (Financial Services industry) High levels of competition among suppliers acts to reduce prices to producers. This is a positive...
Large number of substitute inputs (Financial Services industry) When there are a large number of substitute inputs, suppliers have less bargaining leverage over...
Low concentration of suppliers (Financial Services industry) A low concentration of suppliers means there are many suppliers with limited bargaining power. Low...
Diverse distribution channel (Financial Services industry) The more diverse distribution channels become the less bargaining power a single distributor will...
Low cost of switching suppliers (Financial Services industry) The easier it is to switch suppliers, the less bargaining power they have. Low supplier switching...
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Inputs have little impact on costs (Financial Services industry) When inputs are not a big component of costs, suppliers of those inputs have less bargaining power....
Critical production inputs are similar (Financial Services industry) When critical production inputs are similar, it is easier to mix and match inputs, which reduces...
Volume is critical to suppliers (Financial Services industry) When suppliers are reliant on high volumes, they have less bargaining power, because a producer can...

Threat of Substitutes

Substitute has lower performance (Financial Services industry) A lower performance product means a customer is less likely to switch from Financial Services...
High cost of switching to substitutes (Financial Services industry) Limited number of substitutes means that customers cannot easily switch to other products or...
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Substantial product differentiation (Financial Services industry) When products and services are very different, customers are less likely to find comparable product...
Limited number of substitutes (Financial Services industry) A limited number of substitutes mean that customers cannot easily find other products or services...

Bargaining Power of Customers

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Buyers require special customization (Financial Services industry) When customers require special customizations, they are less likely to switch to producers who have...
Low buyer price sensitivity (Financial Services industry) When buyers are less sensitive to prices, prices can increase and buyers will still buy the product....
Low dependency on distributors (Financial Services industry) When produces have low dependence, distributors have less bargaining power. Low dependency...
Product is important to customer (Financial Services industry) When customers cherish particular products they end up paying more for that one product. This...
Limited buyer information availability (Financial Services industry) When buyers have limited information, they are at a disadvantage in negotiations with sellers....
Large number of customers (Financial Services industry) When there are large numbers of customers, no one customer tends to have bargaining leverage....

Threat of New Competitors

Strong distribution network required (Financial Services industry) Weak distribution networks mean goods are more expensive to move around and some goods don’t get to...
High capital requirements (Financial Services industry) High capital requirements mean a company must spend a lot of money in order to compete in the...
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High sunk costs limit competition (Financial Services industry) High sunk costs make it difficult for a competitor to enter a new market, because they have to...
Strong brand names are important (Financial Services industry) If strong brands are critical to compete, then new competitors will have to improve their brand...
Advanced technologies are required (Financial Services industry) Advanced technologies make it difficult for new competitors to enter the market because they have to...
Patents limit new competition (Financial Services industry) Patents that cover vital technologies make it difficult for new competitors, because the best...
Industry requires economies of scale (Financial Services industry) Economies of scale help producers to lower their cost by producing the next unit of output at lower...
Geographic factors limit competition (Financial Services industry) If existing competitors have the best geographical locations, new competitors will have a...
Customers are loyal to existing brands (Financial Services industry) It takes time and money to build a brand. When companies need to spend resources building a brand,...
High switching costs for customers (Financial Services industry) High switching costs make it difficult for customers to change which products they normally...
High learning curve (Financial Services industry) When the learning curve is high, new competitors must spend time and money studying the market...
Entry barriers are high (Financial Services industry) When barriers are high, it is more difficult for new competitors to enter the market. High entry...

What is Porter's Five Forces Analysis?

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