Porters Five Force Model of Australia and New Zealand Banking Group Ltd


Globalization and liberalization have produced major challenges for ANZ Bank because of the threats of new entrants in the Banking sector. Moreover, the recent economic recession has badly affected banks and other financial institutions. The recession has affected countries like Australia very much whereas it has not affected some of the emerging economies like China or India. In other words, the Australian banking sector is facing stiff challenges from the financial organizations of these countries at present.

Michael Porter’s famous five forces model or theory is used extensively in the industrial sector at present in order to analyze the attractiveness of an organization in the market. It helps the organizations to learn more about the current strength and weaknesses of the organization with respect to the market competition. Porter’s model can be used to foresee future threats and opportunities and the organizations can plan well accordingly.

Porter’s model of competitive forces assumes that there are five competitive forces that identify the competitive power in a business situation which are. Threat of substitute products, the threat of new entrants, Intense rivalry among existing players, Bargaining power of suppliers and Bargaining power of Buyers (Porter’s Five Forces Model, 2009). The figure given below illustrates Porter’s five forces theory.

Operating in more than 50 countries, ANZ bank is one of the largest banks not only in Australia and New Zealand but internationally as well. Founded in Sydney in 1835, its headquarters shifted to Melbourne in 1838. The 170 years history of ANZ brought many impressive results in the banking sector (Australia and New Zealand Banking Group Limited (ANZ), 2010). ANZ bank

Substitutes are those products which are quite different in form but which offer a real alternative to the industry competitor’s product (Michael E Porter and sustainable competitive advantage, Chapter 4, p.40). The threat of substitute products means the easiness of changing consumer behavior to opt for substitute products.nbsp.