China CITIC Bank International is the part of cross-border franchise of bank of the CITIC Group located in Beijing. Together with the parent company or bank, CITIC bank has made its name at the global level and competing with other big banks in the international market. China CITIC bank is based in Hong-Kong and providing full-services of commercial banks along with the broad spectrum of the financial services like wealth management, wholesale banking, personal banking, and treasury solutions at global markets. The bank is aspired to be the “the best integrated financial services institution”, along with great international capabilities and standards. It provides the value adding financial services and solution to define and exceeding both objectives of international business and wealth management of the Great Chinese customers and also foreign clients too. China CITIC bank focuses towards value creation for the stakeholders, and core to the offerings their priority is to provide intimate information and knowledge about the services to customers. It works hard in improving the network capabilities in China, with the client-centric execution of the best quality. It tries hard to gain competitive advantages to maintain its position in the international markets (China CITIC Bank, 2019). Here is the detailed Porter five forces analysis of the China CITIC Bank;
Bargaining Power of Buyers
The China CITIC Bank is the strong provider in the international market of the commercial banking services as it is the strongest providers of all the services. China CITIC Bank should continue to attract the salespeople for providing above the industry average client service. Customers in China and international level are many and there are many options available, which means buyers have many banks to choose. It is necessary for the China CITIC Bank to focus on the differentiation and innovation for attracting more customers. Large customer base means large sales of products and services. There prices are needed to be reasonable for the services so that buyers choose China CITIC bank (UK Essays, 2018).
Bargaining Power of Suppliers
There are numerous suppliers in the China CITIC Bank as compared to the buyers. This clearly shows that suppliers have very low control over the prices and so the bargaining power of the suppliers are weak. The services and products provided by the suppliers are standardized, and less differentiated, and also the high switching cost. This makes very easy for the China CITIC bank to switch the suppliers, and this means suppliers is the weaker force. It is necessary for the China CITIC Bank to have multiple suppliers in the supply chain and have efficient distribution network (Murphy, 2018).
Threats of New Entrants
Threats of the new entrants are high in the banking sector, so for the China CITIC Bank, because there are banks who are also evolving in the international market. however, huge capitalization is required for setting up the bank, and building the brand name. it is very difficult for the new entrants to achieve the economies of scales, to gain cost advantage, but its difficult when giant banks with big names are existing in the market. China CITIC Bank has to face lower threats of the new entrants because of the strong brand name and huge customer base (Koroma, 2018).
Threats from the Substitute Products
There are very few substitutes available in the banking industry, but still banking industry is moving from traditional services to electronic services. Concept of online banking and net-banking is increasing day by day. This means China CITIC bank has to work towards more innovation and spend more in research and development department to offer the services according to the needs and expectations of the customers, and to retain the position of itself in the international market (Murphy, 2018).
Rivalry of Existing Players
There are many competitors of China CITIC Bank in the industry, like HSBC, China Construction Bank, etc. and hence the competition is high. It is necessary for the China CITIC bank to increase the customer base and expand itself geographically in other regions to diversify the risks. The bank must also work towards differentiating the products so that it attracts more customers (Koroma, 2018)
References
China CITIC Bank, 2019. Bout the bank. [Online], Available at: https://www.cncbinternational.com/about-us/about-citic-bank-international/en/index.jsp, [Accessed on: 17th July, 2019].
Koroma, P. 2018. 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: 17th July, 2019].
Murphy, E. 2018. China CITIC Bank Porter Five Forces Analysis. [Online], Available at: https://www.essay48.com/term-paper/13761-China-CITIC-Bank-Porter-Five-Forces, [Accessed on: 17th July, 2019].
UK Essays, 2018. Five forces analysis in banking sector. [Online], Available at: https://www.ukessays.com/essays/economics/five-force-analysis-in-banking-sector-economics-essay.php, [Accessed on: 17th July, 2019].