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The nature of competition in the industry in large part determines the content of strategy, especially business level strategy .based it is on the fundamental economics of the industry, the very profit potential of an industry is determine by competition interaction. Where these interactions are intense, profit tends to be whittled away by the activities of competing. Porters model is based on the insight that a corporate strategy should meet the opportunities and threats in the organizations external environment. Especially, competitive strategy should base on and understanding of industry structures and the way they change. Porter has identified five competitive forces that shape every industry and every market. These forces determine the intensity of competition and hence the profitability and attractiveness of an industry. The objective of corporate strategy should be to modify these competitive forces in a way that improves the position of the organization. Porters model supports analysis of the driving forces in an industry. Based on the information derived from the Five Forces Analysis, management can decide how to influence or to exploit particular characteristics of their industry.
Threat of substitute
Non banking financial sector increasing rapidly Deposits in posts Stock Market
8. Low government regulations There are low regulations exist to start a new business due lpg policy adopted by India.
1. Large no of alternatives Customers have large no of alternatives, there are so many banks, which fight for same pie. There are many non financial institutions like icici, hdfc, and ifci, etc. which has also jump into these business .there are foreign banks , privet banks, co-operative banks and development banks together with specialized financial companies that provides finance to customers .these all increase preference for customers.
3. Undiffenciated service
Bank provide merely similar service there are no much diffracted in service provides by different banks so, bargaining power of customers increase. They can not be charged for differentiation. 4. Full information about the market Customers have full information about the market due to globalization and digitalization Consumers have become advance and sophisticated .they are aware with each market condition so banks have to be more competive and customer friendly to serve them. For good creditworthy borrowers bargaining power is high due to the availability of large number of banks
Borrower can easily raise funds from NBFC because it requires less formal procedure for getting funds compare to private banks. Post Office Products: Post office is also providing some service like fixed deposit facility, saving account, recurring account etc. The interest rate of saving account is higher than private banks. It is fully secured by the government so people who do not want to take risk for them post office saving is good substitute. Government Bond: banks. Mutual Funds: Mutual funds are also now proving as good substitutes for banks. They assure for providing high return with less time in comparison of banks. The administrative expenses are also very low as compared to banks. Investment in Mutual funds is more flexible than investment in banks. Stock Market: People who are ready to bear risk and wants a high return on their investment, stock market is a good substitute for them. Day by day investors are moving towards stock market as interest rate in banks are decreasing. So now stock market has proved as a big competitor for baking sector. Debentures: Debentures is also proved as a good substitute of banks fixed deposit as return on debenture is fixed and high. There are different types of debentures, which attract various classes of investors. Other Investment Alternatives: Now common peoples attraction is shifting from banks to other various alternatives such as gold, precious metals, land, small savings etc. As we can see the growing trend in these alternatives in comparison of decreasing interest rates in banks. Govt. Bond also attracts savings from the general public. It is less risky and more secured as compare to savings in private
SWOT ANALYSIS
SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. STRENGTH: It specifies the attributes of the person or company that are helpful to achieve the objective(s). Delhi State Cooperative bank is No. 1 in the Urban Cooperative Banking Sector in India with a cumulative banking experience. High standard regulatory environment. Flexible work permit system and good quality staff offering personal client service. Bank has implemented Core Banking Solution (CBS) in the Bank. This solution primarily aims at having a unified customer approach. WEAKNESS: Refusal to dilute stake in PSU banks: The government has refused to dilute its stake in PSU banks below 51% thus choking the headroom available to these banks for raining equity capital. Lack of competitive differential with other offshore centres Rigid legislation that inhibits business development
the bank. Delhi State Cooperative bank does 0.3% to 0.4% of the nations banking business. In India today, 60% of the population do not have access to a banking product; 80% of the population do not have access to an insurance product and 98% of the population do not have access to a stock market product. Thus, there is tremendous untapped growth potential in the Indian subcontinent. THREATS: Rise in inflation figures which would lead to increase in interest rates. Increase in the number of foreign players would pose a threat to the PSB as well as the private players.
Anti-offshore regulations in foreign target markets restricting the development of