A strategic management paper for Equitable Savings Bank

Date of Publication

2005

Document Type

Oral Comprehensive Exam

Degree Name

Master of Business Administration

College

Ramon V. Del Rosario College of Business

Department/Unit

Decision Sciences and Innovation

Abstract/Summary

The subject of the study is Equitable Savings Bank which belongs to the financial services industry, particularly the banking sector. The Financial Services industry in the Philippines plays an important role towards the development of the economy. Through lending activities, funds are made available to businesses and investors, enabling the growth of industries and providing employment to many. Through its deposit generating activities, the financial services industry particularly the banking sector also encourages savings, essential to the growth of the nation.

Equitable Savings Bank is ranked number eight in terms of assets size in the thrift banking sector. With P5.76 billion worth of assets, it holds a 2.06% of the total assets of the thrift banking sector.

Externally Analysis: 1. Threat of Entry. Financial services industry has high barriers to entry because the industry is fragmented in nature. The potential entrants in the industry will find it hard to enter in the industry due to the high capitalization requirement, brand identity to be established, various government regulations and policies, and a lot of players offering differentiated products in the market.

2. Intensity of Rivalry. There is an intense rivalry among all the competing firms in the industry due to its slow growth rate, there are a number of diverse competitors competing for a share of the fragemented market.

3. Bargaining Power of Buyers. The bargaining power of the buyers in the industry is high due to a wide number of players competing and offering varied products and services that will provide minimal or no switching costs if buyers wanted to go from one supplier to another.

Bargaining Power of Buyers. The bargaining power of the buyers in the industry is high due to a wide number of players competing and offering varied products and services that will provide minimal or no switching costs if buyers wanted to go from one supplier to another.

4. Bargaining Power of Suppliers. The bargaining power of suppliers can be considered low due to the fact that there are many substitute products which can be obtained from other suppliers at lower costs and higher quality.

Threat of Substitute. The threat of substitute for the product in the industry is high due to the other options where savers and customers can invest their money allowing them have more bargaining power to take on the opportunity to get higher interest from their savings and lower rates from their loans.

After reviewing the external environment, we can now record the changes that can be considered threats or opportunities in the industry.

Listed are the considered threats to the industry:

Increase in the world oil prices that will lead to the increase in local pump prices. Most of the industries in the Philippines are very much affected with the fluctuations in oil prices. An increase in the price of petroleum will lead to increase in prices of other goods and services such as transport fares and other prime commodities. Sudden increase in prices will make the buyers become price sensitive and will want to have more value for their money. The possible change in the microenvironment can make the bargaining power of buyers higher.

Unemployment rate increase for 2004. Unemployment rate for the past years have continues to increase and projected that will continue to increase in succeeding years. Unemployment rate increase can contribute to a slower industry growth that has the capability of making the intensity of rivalry among competitors become higher.

Recently approved Anti-Money Laundering Act (AMLA) can have an effect to the amount of money that they can put on financial industry especially the bank. The restrictions and provisions of the law will make the depositors or people who have excess funds to look for other alternative where they

Abstract Format

html

Language

English

Format

Print

Accession Number

OCE1199

Shelf Location

Archives, The Learning Commons, 12F Henry Sy Sr. Hall

Physical Description

132, 3 unnumbered leaves ; 28 cm.

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