Metrobank Porters Five Competitve Forces Essay
METROPOLITAN BANK AND TRUST COMPANY Founded in September 5, 1962, Metropolitan Bank & Trust Co. (Metrobank) has since become the premier universal bank and among the foremost financial institutions in the Philippines. It offers a full range of banking and other financial products and services, including corporate, commercial and consumer banking, as well as credit card, remittances, leasing, investment banking and trust banking. Metrobank currently spans a consolidated network of over 1,400 ATMs nationwide; over 760 domestic branches; and 38 foreign branches, subsidiaries, and representative offices.
Metrobank was incorporated in Binondo, Manila by a group of Filipino businessmen principally to provide financial services to the Filipino-Chinese community. It opened its first local branch in 1963, and then expanded beyond Philippine shores only a few years after its establishment. Metrobank rolled out its first international branch in Taipei in 1970 and a representative office in Hong Kong in 1973. In 1975, Metrobank became the first of the private banks to move into American territory when it opened its office in Guam. It later established branches in the United States mainland cities of Los Angeles and New York.
A recognized leader in the country’s banking industry. Metrobank has become regarded as the trusted banking partner, staying true to its brand promise of “You’re In Good hands”. Porters Five Competitive Forces 1. Potential New Entrants New potential competitor are always a threat to any industry, other possible threat include: changing demographics/shifting demands, emergence of cheaper technologies and regulatory requirements. In keeping with the aspect of economies of scale, threat of new entries would be low since minimum size of operations for banks to keep it profitable is quite high.
Threat of new entrants is low since setting up a new business such as bank needs a lot of capital investment not to mention the technogy required to compete with rivals such as ATM machines and access to the distribution of channels can be monopolized by other competitors. High switching costs for customers such as long term contracts hinders the threat of any new banking institution since it poses great inconvenience for customers. 2. Bargaining Power of Buyers Bargaining power of buyers represents a major force affecting the intensity of competition in an industry.
Metrobank offered special services that gains customer loyalty compare to its rivals, in which we offered different variety of products and services to their customers. Through AXA Life Insurance, Metrobank Card Corporation, Philippine Charter Insurance and Federal land. Gradually, to gain increasing bargaining power, it shifted its portfolio to place more emphasis on spread income and less dependency on trading gains. 3. Bargaining Power of Suppliers With Metrobank, they have expanded their networks through branches and means and squeeze out important cost savings for themselves.
With these they have manage themselves very well, making them agile in their means, with its quick ability to apply power of information to respond to their customers’ needs amid shifting market conditions. Other than that, the speed availability of services of next generation components have widely denomination of initiatives focused on the harmonization of the benefits and compensation packages of officers and staff, the resolution of issues between unions, and the administration of the required training and developments programs to adequately support changes in structure. . Threat of Substitutes Product In banking institutions, competitive pressures arising from substitutes products/services increase as the relative price of substitutes/services declines and as consumers switch cost decrease. Metrobank with its keen reading of International trends, it enable themselves to access unique opportunities for increased value for their customers. The threat of substitutes as far as customer brand loyalty is concerned is medium since brand changing in banks is rare.
Only poor account management and bad customer relations lead to shifting in banks since banking institutions in our country operate primarily in similar standards set by the government. Every banking establishment keeps a close relationship with their customers so I believe that in this aspect, the threat for substitutes is low. As for relative pricing of performance of substitutes, the threat is medium since banking institutions’ rates have only slight discrepancies. It’s only a matter of which bank rate you can afford.
Current trends also show that there is low threat of substitutions since it will be unwise to move your savings to another bank provided that is able to stay afloat during this economic crisis. 5. Rivalry among Competitors Metrobank has been very aggressive and competitive in its field as it offers its best quality service to its stakeholders, bringing in customers who patronize their products, as it also expand to its quest to explore and strengthen through vision, mission and value. It has been always been a challenge to different companies, what their rival competing firms has to offer.
These factors such as to enhance quality, add features, provide services are one of the primary reasons why Metrobank has been very aggressive a threat to all banking firm. As for rivalry among competitors especially to differentiation of product, the threat is intense since all banking institutions offer the same product which is financial services, whatever it maybe, loans, savings, etc. with respect to strategies, threat is also intense due to the fact that almost all banking institutions have their own perks and advantages that lure customers in their own way. Submitted by: Ruby-Lyn D. Taganas