<p align="justify">ORIX is the diversified financial company that was founded in 1964 as the Orient Leasing company and is headquartered in Japan (ORIX, 2020). The company has expanded and created a globally diversified portfolio through organic growth and acquisitions. The company provides a wide range of services ranging from leasing to real estate development. Corporation’s main motive is to create a diversified portfolio through horizontal expansion that would create positive synergies. ORIX operates through different segments including; Financial Services, Leasing, Retail, Insurance, Real Estate, and Investment and Operations. The company’s diversified portfolio has helped it to sustain through difficult financial times. Its finance plus model has helped it steer through the debacle of Lehman brothers collapse. The company has strong cultural values and sustainability is embedded in them. Porter&#8217;s five forces model is the appropriate tool to assess the potential business and financial risks it is exposed to.</p>
<h2 align="justify">Competitive Rivalry in the Market</h2>
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The companies in diversified financials are exposed to more competition. ORIX is based in Japan and it has a business portfolio expanding the globe. The company is exposed to all the sectors it is competing in. Its major competitor in real estate is Open House Co., Ltd. and it has posted annual revenue of $4.91 billion in 2019 (Nikkei Asian Review, 2020). Its competitor in the financial services sector is Mitsubishi UFJ Financial Group; it is a holding company operates through different segments. The group has earned annual revenue of $55.07 billion with a net income of $7.8 billion in 2019 (Nikkei Asian Review, 2020). The ORIX’s major competitor in the insurance industry is Aegon, it has earned a consolidated total income of $67.6 billion in 2019 (Aegon, 2020). In comparison, ORIX has earned annual revenue of $21.9 billion in 2019 (Nikkei Asian Review, 2020). There is a moderate competitive rivalry. ; </p>
<h2 align="justify">Threat of Substitutes</h2>
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The threat of substitutes is high when there are better alternatives available in the market. The offering is at a better price and might be in the same or different industry. The financial services sector includes investment banks, insurance companies, and retail banks. It is susceptible to the threat posed by technology startups. These technology startups offer one-off services offered by the incumbents and are trying to enhance the experience. These startups are not a complete replacement of the existing institutes. The financial services sector has an important place in society and it is going to be part of (McWaters et al, 2015). The real estate development has been the industry that is going through fundamental change. It is evolving with an increased focus on pre-casted materials and sustainable designs. But there is no real threat in the short term. The threat to substitute is low as a whole.</p>
<h2 align="justify">Threat of New Entrants</h2>
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The threat of new entrants is high when business is less capital intensive and there is a relaxed regulatory environment. The portfolio diversification at the scale of ORIX requires significant resources. Other than resources there are established market players in each industry. These incumbents have achieved a status of premium services with the consumer base. They have their market share and they compete fiercely to retain it. Another factor is the regulatory environment, the laws and regulations are different across industries. The cost of compliance poses a massive threat to new entrants especially in financial services sector (Deloitte, 2017). In real estate and leasing, laws are also stringent and they are in place to create a balance between consumers and corporations. Capital requirement along with regulatory compliance makes it difficult for the new entrant. Thus the barriers to entry are high. </p>
<h2 align="justify">Bargaining power of Buyers </h2>
<p align="justify">Customers can leverage their position when they have options to choose from. They can leverage their position to negotiate better terms of services. The financial services sector is proliferated with retail banks and similar many companies providing insurance products. The products offered by the financial services industry do not offer any variance (Vyas and Raitani, 2014). These products are similar at the core and they lose competitive advantage. Other than that there is low switching cost, consumers can easily switch among different service providers with no or insignificant cost. In the real estate industry consumer can mostly use rental accommodations or they mortgage their accommodations. The accommodation has to satisfy customer needs and align consumer priorities. The consumer holds moderate bargaining power. Considering all the above-mentioned factors consumers hold moderate to high bargaining power. ; ; ; </p>
<h2 align="justify">Bargaining Power of Suppliers</h2>
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The important sources of supply in the financial services industry are human resources, customer deposits, customer premiers, and lender institutes investment deposits. The suppliers hold high power when they are in scarcity and vice versa. There are many professionals who aspire to work in the financial services sector. The other source is customer deposits in case of the banks and premiums in case of insurance. The customers are aware of the competition and the different terms offered by different providers. They do their study and choose the best possible term on offer. They possess higher bargaining power. Lending institutes invest their money based on portfolio return and past performance; they do their analysis before choosing a service provider. They also hold higher bargain power. By taking into account all the supply factors, suppliers hold moderate to high bargaining pow</p>
<h2 align="justify">References</h2>
<p align="left">Aegon. 2020. Investors. Annual reports. Available at: https://www.aegon.com/contentassets/14bdec897d244680b202b22291c751ec/aegon-integrated-annual-report-2019.pdf<br />
Deloitte. (2017). The Future of Regulatory Productivity, powered by RegTech. Available at:<br />
https://www2.deloitte.com/us/en/pages/regulatory/articles/cost-of-compliance-regulatory-productivity.html<br />
McWaters, J., Bruno, G., Lee, A., &; Blake, M. (2015). The Future of Financial Services-How disruptive innovations is reshaping the way financial services are structured, provisioned and consumed. In the World Economic Forum. Junio de (Vol. 2105).<br />
Nikkei Asian Review. (2020). Mitsubishi UFJ Financial Group, Inc. Available at: https://asia.nikkei.com/Companies/Mitsubishi-UFJ-Financial-Group-Inc<br />
Nikkei Asian Review. (2020). Open House Co., Ltd. ; Available at: https://asia.nikkei.com/Companies/Open-House-Co.-Ltd<br />
Nikkei Asian Review. (2020). ORIX Corp. Available at: https://asia.nikkei.com/Companies/ORIX-Corp<br />
ORIX. 2020. About. Our History. Available at:https://www.orix.co.jp/grp/en/about/ourhistory/<br />
Vyas, V. and Raitani, S. (2014). Drivers of customers’ switching behaviour in Indian banking industry. International Journal of Bank Marketing Vol. 32 No. 4, 2014 pp. 321-34.</p>