Page 32 - Flip Banks TG

Bargaining Power of Customers

Barclays has many, individual customers as buyers which

makes them particularly powerless (as opposed to having

just a few, big buyers, who would have more power to
negotiate with). Typically, buyers want to buy the best on

offer but pay the lowest possible price.

In the banking industry customer deposits can be mainly

divided into two accounts; saving account and time deposit

account where customers can easily transfer the money into

their current account for daily uses which means these

types of accounts are held for the personal use which

provide low interest’s returns. People are less sensitive to

the change of interest rates.

Banks also tend to promote their services along with

accounts such as credit cards.

Barclays’ response to the Bargaining Power of Buyers

• By building a large base of customers Barclays may

reduce the bargaining power of buyers whilst providing

an opportunity to the firm to streamline its sales and
production process.

• By rapidly innovating new products. Customers often
seek discounts and offerings on established products

so if Barclays keep on coming up with new products

then it can limit the bargaining power of buyers.

• New products will also reduce the defection of existing

customers of Barclays to its competitors.