1.0 A bank is a financial institution licensed by a government and its primary activities include borrowing and lending money (BAFIA 1989). Malaysia first domestic bank is Kwong Yik (Selangor) Banking Corporation (now Malayan Banking Berhad) established in 1913. Maybank is the largest bank in Malaysia, operating with 374 domestic branches, 90 international branches and employing over 10,000 people (Maybank Annual Report 2009) The Malaysia retail banking industry is primary dominated by few competitors, including major player such as Maybank, Public Bank and CIMB that possess a market share of 75% and small chain of international commercial banking, Citibank, HSBC and Standard Chartered with a further 25% (Azmi & Associates 2008). 2.0 Maybank - VISION: To be a Regional Financial Services Leader
-MISSION: Humanising Financial Services across Asia 2.1 SWOT ANALYSIS OF MAYBANK
STRENGTHS WEAKNESSES -GOOD SERVICE -NOT LOYALTY PROGRAM -LEADER IN THE INDUSTRY -LOANS HARD TO APPROVE -GOOD ECOMMERCE PORTAL - HIGH INTEREST
OPPORTUNITIES THREATS -MORE PROPERTIES ARE COMING UP -DEBT COLLECTING HASSLE -MALAYSIANS LIFESTYLE CHANGES - OTHER FINANCIAL COMPANIES
3.0 The Porter’s five forces model is the skeleton for analyzing determinants of industry profitability (Porter 1985). Porter’s five forces model is used to identify the potential threats and opportunities confronting a bank (Maybank) that is entering or positioning into the banking industry. Hence, the model focuses on five meticulous forces which consist of competitive rivalry of the central focus that is surrounded by the threat of potential entrants and substitute, with bargaining power of buyers and suppliers as shown in Figure 1 (Porter 1980). In Porter’s model, threats of new entrants impose the possibility that new firms may enter the industry and depends on the extent of barriers to entry (Johnson, Scholes, & Whittington, 2008). The capital and fixed cost that are required to get into this industry is high which regulated by Central Bank of Malaysia, anticipate a minimum of 300 million market capitalisation for bank (The Edge Malaysia 2009). Thus, the bank legislation had been restricted by Central Bank of Malaysia that criteria judgement on case to case basis (BAFIA 1989). Also, the banking industry that had reached the maturity cycle which denial competitors into the banking industry (The Edge Malaysia 2009). Moreover, it is difficult to create a brand image in banking industry and customer will not easily fall into new bank offer although the bank offers same or higher interest rate than other existing banks. Clients want to save their money in the bank that can be trusted. In addition, new entrants might get problem with government regulation to get into banking industry. It infers that the barriers to entry are high with the regulation requirement endorsed by the Central of Bank Malaysia and the threats of new entrants are low. The threat of substitutes is in relation to product or services that offer similar benefits with different process (Johnson 2008). Maybank face the substitution of financial institution (non banking government), Employees Provident Funds (EPF) that offer the clients with higher interest rate compare to fixed deposit offered from Maybank. This illustrate to elderly citizen that reluctant to retrieve their maturity saving (55 years old) in EPF by putting the money into the bank with lower interest rate. In addition, the financial service substitution offered by the private money lender which the loan process does not required official individual supporting document and guarantor which compare to the bank requirement are much more stringent. Moreover, substitute of financial institution (non banking government), Small and...
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