Page 10 - Barclays Bank (B) Teaching Note

ISSUE 1

ISSUE 1: Barclays: Environment

(External/Internal)

Porter’s Five Forces analysis allows a quick appreciation

of the forces acting on the balance of power in the

banking market and whether they are high, medium or
low in impact.

Industry rivalry (Diagram 1) is high where the ‘big four’

players all have substantial market presence. However,

Barclays has an important advantage in its total coverage

of the USA accrued through its earlier acquisitions.

However, the threat of substitutes posed a problem for

the industry as a whole as all banks offer a similar

product where switching costs are low at a time when

customer loyalty is declining.

Mobile banking and the internet were likely to prove the

battlefield upon which bank success or failure is founded.