Page 17 - Barclays Bank (B) Teaching Note

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.