Page 30 - Flip Banks TG

Threat of Existing Rivalry

Barclays’ bargaining power is severely constrained by

existing rivalry. This is because there are many other

alternatives to Barclays, such as HSBC, Lloyds and RBS.

Most banks offer similar services and products with
competition on giving higher rates for deposit and lower

rates on loan prevalent. With this intense competition to

gain more customers by offering better rates than

competitors, the result is that this drives down prices and

profitability. Therefore, Barclays’ offerings might be

dependent upon their track record and reputation as

customers judge how ethically they are. People are aware of

the ethic of bankers as well as the corporate governance in

doing businesses

For the investment bank, customers are concerned with fees

and returns. Banks need to compete on giving the lowest

fee to induce customers to open the account with the

company. And, return is from the past performance of the

trading team which implies how good they are to generate
the profit for customers.

Barclays’ response to Intense Rivalry

• By building a sustainable differentiation

• By building scale so that it can compete better

• Collaborating with competitors to increase the market

size rather than just competing for small market.

• Repairing reputational damage