<p align="justify">KBC Group is formed in 1998 in Brussels, Belgium. The group’s principal activity is integrated insurance. The group&#8217;s major market share in Europe exists in Belgium, the Czech Republic, Slovakia, Hungary, Bulgaria, and Ireland (KBC Group, 2020). The group operates through its 30 subsidiaries in the world. Their financial activity involves real estate investment, leasing institution, credit institution, and assets management, commercial and financial management. The group operates through its 1300 branches through its own and partner channels worldwide (KBC Group, 2020). The group is one of the top 3 financial institutes based in Belgium. Porter’s five forces model is a useful tool to identify threats and opportunities faced by KBC financial group in the Belgian financial services sector.</p>
<h2 align="justify">Competitive Rivalry in the Market</h2>
<p align="justify">The financial market in Europe is very competitive. The major competitors of KBC Group are Dexia and AXA Group, which holds a strong footprint in Europe and internationally. Its major advantages are the largest bancassurer and stronger footprint in Western Europe. The revenue of Dexia is €7,827 Million (Statsita, 2019), and the revenue of AXA Group is $125,578 Million (Fortune, 2019). In comparison, the revenue of the KBC Group is € 7,629 Million (Fortune, 2012). Their major advantage is a diversified portfolio through different financial institutes. It also helps them increase their public representation. KBC Group has waved banking fees to penetrate local markets and provide relief to masses (Independent, 2020). It had made it difficult for their rivals to compete with them.</p>
<h2 align="justify">Threat of Substitutes</h2>
<p align="justify">The rise of technology in the first two decades of the 21st century is revolutionizing the whole industrial landscape. The main threat to banks and insurance groups are E-banking and infotech. The progress in fintech is increasing competition, and new business models are formed. New companies are leveraging technology and forming partnerships to compete with existing giants. The firms are pouring in millions to establish Fintech worldwide. Technology firms from outside the insurance industry are opening new ventures. Such as BMW &; Swiss Re joined hands for automated driver assistance systems (ADAS). Around 18 Million people logged into their online banking account in Belgium in 2018 (Statista, 2020). KBC Group has to invest in E-Banking and fintech to keep intact its integrity and client base. In the short-term, the threat of substitutes is low.</p>
<h2 align="justify">The Threat of New Entrants</h2>
<p align="justify">The framework to enter the financial industry is strictly restricted around the world. The higher initial cost and high sunk investment make it difficult for a startup to compete with the established financial institute. Regulatory bodies have their rules set for the financial market for the safety of their economy. The cost of compliance and litigation poses a massive threat to new entrants (Deloitte, 2017). The products in the financial sector aren’t any different from any market in the world. The new entrants must come with a new innovative product to compete with that well-established financial institute. Firms outside the insurance industry are forming links with insurance companies to increase clientele. These ventures are also causing problems for new entrants. It is difficult to compete with incumbents due to their financial prowess. All the mentioned facts deter new entrants.</p>
<h2 align="justify">Bargaining Power of Buyers</h2>
<p align="justify">Customers expect higher bargaining power when they have alternatives, and the involved transaction volume is high. KBC group&#8217;s clientele is distributed in two major portions, one is individual customers, and other is companies. Their major portion is corporate clients. Individual customer doesn&#8217;t have high bargaining power as compared to companies. Corporate clients can leverage their capacity to offer more business. They have higher bargaining power. Individual buyers can only have higher bargaining power if there are other options available in the sector. Individual consumers&#8217; bargaining power also depends upon the fact that their desired product is on offer elsewhere too. Buyers have moderate bargaining power.</p>
<h2 align="justify">Bargaining Power of Supplier</h2>
<p align="justify">Suppliers hold higher power if the industry is dominated by few suppliers, it provides more products in the market, and it is future integrated. KBC Groups exert higher power, mainly due to its massive clientele and diversified portfolio in the financial sector. It holds bargaining power over its individual clients because of its massive client representation. With corporate clients, the benefit of the long-term partnership is in the interest of both buyer and supplier. The supplier can accept the corporate clients&#8217; conditions over its long term benefit. It can increase its profitability. So suppliers can be benefited from the higher buying power of corporate clients as compared to individuals where suppliers hold bargain power.</p>
<h2 align="justify">References</h2>
<p align="justify">Deloitte. (2017). The Future of Regulatory Productivity, powered by RegTech. Available at:https://www2.deloitte.com/us/en/pages/regulatory/articles/cost-of-compliance-regulatory-productivity.html</p>
<p align="justify">Fortune. (2019) Global 500. Available at:https://fortune.com/global500/2019/axa/</p>
<p align="justify">Independent. (2020). Challenge by KBC to Local rivals. Available at: https://www.independent.ie/business/irish/kbc-challenges-rivals-to-make-it-easier-for-current-account-customers-to-qualify-for-fee-free-banking-38225554.html<br />
KBC Group. (2020). About us. Available at: https://www.kbc.com/en/about-us/who-we-are.html<br />
KBC Group. (2020). Our financial performance. Available at: https://www.kbc.com/en/about-us/our-financial-performance.html<br />
Stastista. (2019 ) Income of Dexia 2014-2018. Available at:https://www.statista.com/statistics/716748/total-interest-income-of-dexia/</p>