BNP Paribus is known to be the bank of changing a world, it is successful in developing the strong roots in the Banking history of Europe and supports the consumers and employees more devotedly. It is considered as one of the leading banks in the Eurozone and successful in making the prominent position in the international banking industry. It is currently operating in 72 countries and employees around 202,624 people, who work with all the dedication to make the bank successful and helps in achieving the company objective (BNP Paribus, 2019). The Porter five forces analysis helps the bank in achieving the set objective and goals by analysing the external competition level of the industry. This helps the bank in analyzing the whole banking industry at global level as being the multinational service providers. Here is the detailed porter’s five forces analysis of the BNP Paribus;
Bargaining Power of Buyers
The bargaining power of the buyers are medium in the case if BNP Paribus because the products of the BNP Paribus are its consumers themselves; they are the depositors who have the power, knowledge and market information which helps in deciding the bank for settling. However, for the corporate consumers, it is hard to determine such differences mostly in services offered by every bank, and such services are standardised rather than differentiated. Individual consumers have the power in this situation but not to the corporate clients (Custom writing, 2019).
Bargaining Power of Suppliers
The bargaining power of the suppliers is weak in the case of BNP Paribus, because of the low influencing of supplier on the buyer. The consumers being depositors has no control on interest rates charged by bank or on other internal operations. However, for the corporate clients, banks hold more power in offering the packages and services deals for the big clients. Credit Market also consider as the source of providing raw materials to bank and as a liquid asset that is unmeasurable. Moreover, Central Bank is usually responsible for currency insurance as being MAS, stability surveillance and supervision of the financial services, and as a last resort for providing liquidity in markets. Hence, Central Bank as a whole has the power on BNP Paribus instead of daily operations (Murphy, 2018).
Threats of New Entrants
The industry in which BNP Paribus is operating has tough competition but as world is known to be the lenient market for foreign businesses set-up, because it has the pro-business environment, which is rich in stable politics and cultural diversity. The threats from the new entrants are strong in this case due to the financial institutions and service providers are becoming universal and provide the broad range of the financial products or services that are not only restricted to the banking services. New firms in the industry explores the innovative ways of banking like BNP Paribus has adopted innovation for competing better in the market (BNP Paribus, 2019).
Threats from the Substitute Products
Threats from the substitute products are high in the banking sector because of the vast variety of the financial institution and services providers who are specialized in multiple business lines and usually have successful experiences. The BNP Paribus also faces greater challenges and threats towards the Investment & Corporate banking and Asset Management. However, it is necessary for the BNP Paribus to offer more differentiated services and become more service oriented rather than product oriented so that more consumers will be attracted (Koroma, 2017).
Rivalry of Existing Players
There is an intense competition in the industry in which BNP Paribus operates. The financial industry is very tough to compete because of the presence of Money Centre banks, institutional asset management providers, financial planners, and super-regional banks. In Singapore, there are three main local banks; OCBC, UOB, and DBS, and BNP Paribus has to compete with them in order to retain its position in the country. It is necessary for the bank to revise its previous strategies and the portfolios in order to retain the customer base and attract new consumers through advertising or marketing (Custom writing, 2019).
References
BNP Paribus, 2019. About us. [Online], Available at: https://group.bnpparibas/en/, [Accessed on: 23rd April, 2019].
Custom writing, 2019. Report on the Strategic Approaches of BNP Paribas. [Online], Available at: https://customwritings.co/report-on-the-strategic-approaches-of-bnp-paribas/, [Accessed on: 23rd April, 2019].
Koroma, P. 2017. PORTERS FIVE FORCES MODEL IN BANKING INDUSTRIES ECOBANK SIERRA LEONE LTD. [Online], Available at: https://www.academia.edu/31072899/PORTERS_FIVE_FORCES_MODEL_IN_BANKING_INDUSTRIES_ECOBANK_SIERRA_LEONE_LTD, [Accessed on: 23rd April, 2019].
Murphy, F. 2018. BNP Paribas PESTEL Analysis & Environment Analysis. [Online], Available at: https://www.essay48.com/term-paper/13665-BNP-Paribas-Pestel-Analysis, [Accessed on: 23rd April, 2019].