ECONOMY OF BANGLADESH
The Bangladesh economy attained 5.9% real GDP in 2009, 5.83% in 2010. It mildly impacts the ongoing global shutdown because of the limited openness and strength domestic demand. Adequate domestic production in crops and remittance over service sector helped the real economy to remain steady. The government and Bangladesh Bank continued to adopt policies in bringing the economic stability and higher growth. Economic growth was also aided by slowed but still in double digits and sustained healthier exports and buoyant workers’ remittances inflows. Although global economy is beginning to stabilize the signs of recovery the third wave of recession is likely to impact the Bangladesh economy, necessitating some downward revision in the medium term economic forecasts. In the updated Medium term Macroeconomic Framework (MTMF), the real GDP growth has been projected to in range of 5.75 to 6.10 in FY11.the growth rate of FY11 may exceed the target if there will faster improvement in global economy together with investment plan implementing initiatives including public private partnership(PPP). Financial institutions of Bangladesh are in a happy position without existence of bankruptcy or credit crunch. Rather than themselves needing to bailed out ,banks helped the real economy in coping global economy .meantime significant progress has been made in the financial sector, especially in banking industry by strengthening competitive pressure, tighten regulation and supervision. Banks were asked to increase their paid up capital to comply with BASEL regulation. Recently, Bangladesh Bank has been raised SLR of commercial Bank.
An industry can be defined as a group of companies offering products or services that are close substitute for each other. Porter’s five forces model shows potentiality of the business analyzing five important factors. Basically it shows the external influence over the business. For any type of industry analysis Porter’s Five Forces Model is a unique to know about the sustainability and profitability of a company. These forces help us to determine the intensity of Export Import Bank of Bangladesh ltd’s competition and hence the profitability and attractiveness of it. The objective of the company’s corporate strategy should be to modify these competitive forces in a way that improves the position of the organization.
1. Risk of entry of potential competition:
Potential competitors that are currently not operating business in the industry but have the capability to do so if they choose. A high risk of entry by potential competitors represents a threat to the stability and profitability of established companies. If the risk is low, the established companies can take this opportunity to raise price and earn greater return.
* Its brands deliver general banking, Islamic banking, capital market services, foreign exchange house in abroad .it provides both functional and emotional benefit to the millions of consumers who choose them * Now a day’s banking business needs a huge capital. In Bangladesh minimum 400crore paid up capital and 800 crore authorized capital is required to start up a new bank. * Depository financial institution needs to comply with international rules and regulation(eg:BASEL-I, BASEL-II) * Bangladesh Government has decided that no new bank license would be issued. So risk of entry of potential competition is significantly low.
2. Rivalry among established companies:
The 2nd factor of porters five forces model is the intensity of rivalry among existing companies. Rivalry refers the competitive struggle regarding price, product design, advertising, promotion etc. If there is high degree of rivalry, every individual company has to spend a lot of amount as a marketing expense, and price becomes so much competitive. So it lessens profit again low degree of rivalry lessens this expenses and increase profitability of...
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