UBS Group is the Swiss multinational financial services and investment bank. The company is founded in Switzerland. It is headquartered in Basel and Zurich. The company has maintained its presences in the major financial centres as biggest Swiss banking across the globe. The client of UBS prefers the bank for its client confidentiality element and bank secrecy culture. The large positions of the banks in EMEA, Asia Pacific and America markets has made it a globally systematic financial institution. UBS is famous as one of the great service providers in the wealth management area. The company has more than 60,000 talented employees (UBS, 2019).
UBS is operating at a global level and compete with numerous international competitors across the world. It is necessary for the bank to have detailed industrial analysis in order to maintain the market image. Porter five forces model helps the company in identifying the strategic position of the company. it identifies the external factors in order to achieve more economies of scale. Here is the detailed Porter five forces analysis of UBS;
Bargaining Power of Buyers
Investment and financial service providers are only operating for providing the services to consumers. if consumers will not be happy with the company, eventually the company will collapse. Bargaining power of the consumes is an important factor in analysing the company position. The bargaining power of consumers in UBS case is moderate. UBS is highly diversified in its operations and has greater market to serve. The company has huge consumer base and maintains its market share. The consumers of the UBS have moderate bargaining power as the services provided by the company is little differentiated. Consumers of UBS do not prefer to switch to other competitors (Consltingwithresults, 2011).
Bargaining Power of Suppliers
Bargaining power of suppliers is an important factor as it greatly effects the company’s profitability. The UBS suppliers have low bargaining power. As the UBS is a big name in the world financial market, the suppliers really want to be associated with a big name. This helps he suppliers to reach to a huge consumer bae of UBS. Suppliers cannot negotiate to much extent because they are bank on the long-run returns. This will emanate them from these associations. However, UBS maintains very good relationship with its suppliers. And maintains efficient supply chain to provide best services to consumers (Rodrigo, 2012).
Threats of New Entrants
Threats from the new entrants in the investment and financial industry is low to moderate. There are numerous reasons for this. Starting operations in the new industry is not easy as it requires huge capitalization costs. The new entrants have to develop the strong brand name, loyal customer base, differentiated products and services etc. New entrants have to adopt marketing and promotional techniques, distribution channels, supply networks etc. to make itself prominent among competitors. It is difficult for the new entrants to achieve economies of scale. However, UBS is working on a global financial market, it is working hard towards growth and achieving market share (Henry, 2018).
Threats from the Substitute Products
Threats from the substitute products for UBS is very ow. There is no such substitute available for the financial services providers. However, UBS works on high margin regime, the only threat it can have is losing the customers with low margin providers. Despite of this, UBS has maintained a huge base of loyal customers, who trust the company services blindly. This benefits the company in making its strong brand image in the global financial market (UBS, 2019).
Rivalry of Existing Players
The competition level in the financial and investment sector is very intense across the globe. UBS is facing competition from local firms in Switzerland, international firms in the country, and all the global firms. It is also facing competition from non-financial service providers, as they provide services through internet like Paypal. In addition to this, the competition level has also increased because of the consolidation of financial industry. This has led to the development of diversified and bigger competitors. Regardless of this, UBS has its dedicated research and development team along with he resources. This helps the company in enabling the group more innovatively (Rodrigo, 2012).
References
Consulting with results, 2011. Financial Services meet Porter’s Five Forces. [Online], Available at: https://consultingwithresults.wordpress.com/2011/08/03/financial-services-meet-porters-five-forces/, [Accessed on: 25th December, 2019].
Henry, Z. 2018. UBS AG Porter Five Forces Analysis. [Online], Available at: https://www.case48.com/porter-analysis/15985-UBS-AG, [Accessed on: 25th December, 2019].
Rodrigo, 2012. SWOT Analysis and Porter’s 5 Forces analyses for Union Bank of Switzerland (UBS). [Online], Available at: https://writepass.com/journal/2012/09/swot-analysis-and-porters-5-forces-analyses-for-union-bank-of-switzerland-ubs/, [Accessed on: 25th December, 2019].
UBS, 2019. Discover who we are. [Online], Available at: https://www.ubs.com/global/en/our-firm.html, [Accessed on: 25th December, 2019].