Bendigo Bank
...o imitate as this needs real caring and personal involvement in the communities. Industry analysis Intensity of competition The banking industry in Australia is highly concentrated and highly competitive. The major banks in the industry are ANZ,NAB,Weastpac.These banks operate nationally and have market share of 70%. Some banks having strong presence in one state. Product differentiation is high as its deeply people oriented providing, nurturing and catering for all community needs. Bendigo bank has a widespread sponsorship and support of community events, and even to the very way in which services are delivered. Considering all the factors above u can clasify this as a industry with high intensity of competition and intense rivalry among competitors. Threat of new entrants Barriers are high as this indutry requires access to large network o customers,cost of establishing technology is high and gaining brand reconition and accpetance is not easy even though there are new entrants to the market such as Coles,Telstra etc and only advantage over the othes are since they have low cost reputed distribution systems they are able to provide services at a low incremental cost. Buyer demand can grow as new entrants provide financial slutions at low costs, the major banks will also start to offer at low costs and hence provide full services to customers to obtain economies of scale. existing competitors retaliate as other banks introduce new systems or banking packaes and also as new entrants gain foot hold in the market they retaliate by different means. Thus threat of new entrants is medium. Bargaining power of buyers switching costs for individual persons can in this industry is low they can just close their accounts and go for another bank as there are many banks operating For the business customers the costs can be high or low depending on the volume of business as their are stamp duties. buyer demand is high as more entrants provide services at a low a incremental cost and as the industry grow.Brand is very important to the buyer as realiability,security,product performance is also very important as in how well its suits theier needs.Due to all the factors above bargaining power of buyers are meduim to high Bargaing power of suppliers As this industry is highly concentrated and there are many players in the market suppliers has more power over the banks as they can choose which bank to serve and not to. Hence the bargaining powers of suppliers are high. Threat of substitutes There are many substitutes as many banks are their in the industry.price and performance characteristics ae important for the customers and the brand name. Strengths Community banking, differentiation and focus It is apparent in regional areas that it is not the size of the institution but its ethos, quality service and commitment to the communities which sets it apart from other financial institutions and makes the bank a unique company. For small business and retailers, community banks are ideally suited, they’re close and they can do all their banking in one spot. Excellent customer service the bank is know for its excellent, quality and value added services. Brand recognition customers are well aware of the bendigo bank and thats lead factor for small businesses and local community people to be affiliate with the bank. Skilled staff have experienced and professional staff. Known as an innovator introduced visa first to the Australian market, first in giving green home loans, reduced interest rates, waiving of fees and many other innovative benefits. Customer loyalty: experience in banking with a long history.Caring,empathizing and understanding customers needs al have led to increase loyalty. Weaknesses Increasing costs The costs were growing fast as revenues at Bendigo. In 2001-2 ROE was below target,inability to gain economie of scale. Smaller in size their smaller size and higher borrowing costs, need to take smaller spreads of interest .New entrants having access to low cost distribution systems hence providing services at low costs. Not mcuh presence in the cities and in other states main presence in Victoria and in QLD eventhough the bank can be found in other sates theres not much strong presence which can be weaknes of the bank when competing in a firce market as it need to increase its customer base also as yet there is no overseas banking presence. External environment analysis Competitors the banking industry in Australia is highly concentrated and highly competitive as mentioned under the intensitty of rivalry. Demographics Strong presence in Victoria,followed bt QLD and NSW though tey have branches in all states its not significant. Technological As a pioneer of innovative products, Bendigo was the first to introduce products such as Visa Cards and Mortgage Offset Accounts to its customers. Now the Bank offers products such as service-based packages, reduced interest rates, waiving of fees and many other benefits to those customers who choose to foster a relationship with the Bank. Competitive pressures have required the Bank to develop high levels of efficiency and innovative products which enhance the continuing relationships with its customers. Economic: Contributes alot to the economic deveolemnt specially in regional areas. Global No presence globally which in the future may turn into a disadvantage. Socio Cultural Communnity banking have great impact on the well being of the society specially ithe rural areas. It helps the commnity as a whole to grow and expand increase the businesses in the area which all lead to development of the areas an well being of people in those areas. As Bendigo bank’s profits contribute to commnity projects it helps develop the commnityto a great extent. Political and Legal Reserve bank reducing the interchange fee, and regulatry requirements were slanted. B) Bendigo have been fruitful in the past through their internal resources,capailities,competencies and through their value chain activies. The external environment present them with both challenges and opportunities and hence there’s greater room for further development. The competitive advantage they enjoy today as a community bank and their growth in the future will all depend on the bank’s ability to continously improve themselves. Further as a small bank it competes rigously in the dynam...