Page 19 - Barclays Bank (B) Teaching Note

Bargaining Power of Suppliers

Generally, banks don’t really offer physical products

which need to be supplied. However, Barclays does have

a few suppliers (such as PINsentry, Kaspersky, and

Microsoft), but their products are of relatively little

importance and, if needed, could easily be replaced by in-

house Barclays solutions.

The suppliers of funds to bank are depositors. Banks, in turn, pay

interest rates to service suppliers as a cost of borrowing. Higher
interest rate on deposit is the main factor in attracting people to

save in banks. the network system and branches may also be
important to gain and retain depositor/suppliers.

Barclays response to the Bargaining Power of the

Suppliers

• By building efficient supply chain with multiple

suppliers including depositor/supplier

• Developing dedicated suppliers whose business

depends upon the bank.

This makes the bargaining power of suppliers to be moderate.