Bargaining power of buyers in comparison to the

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Bargaining power of BuyersIn comparison to the companies supplying the goods or the services, there are numeroussuppliers in the HSBC market, that makes shoppers relatively less choice from and thereforehave little price protection. In addition, the amount of wages is comparatively low in the market,meaning that shoppers wish to buy at low rates and that consumers are vulnerable to their prices.Because of an increased customer satisfaction aspect, HSBC ensures a large client base andweakens its negotiating strength. It also benefits from the economies of scales to increase thecost-benefit and profit by marketing to consumers at low rates (Zouaoui, 2019).Bargaining Power of SuppliersFor several products like the banks' capitalists who are depositors, the bargaining power ofvendors is low, and financial products are compared to other companies for decision-makingover capital drawing or waiting. Further, electronic equipment providers are numerous on themarket, which means that there are multiple vendors for such goods and that certain suppliershave low trading capacity. The credit card providers are, however, few and thus have mediumtrading leverage and would most certainly extract high premiums from HSBC.9
Threats of New EntrantsThe threats of the industry's new entrants are very small due to the economies of scale which inthe banking sector are hard to attain. This offers an advantage in terms of cost advantages tothose who manufacture a huge number or capacity which makes the manufacturing process foremerging companies more costly. Consumers are still looking for distinctive concepts andbrands. HSBC always emphasises creativity which distinguishes between brands thatcompetitors and attracts customers. It intelligently takes advantage of economising sizes todefend against new entrants of the market (Zouaoui, 2019).Threats from the Substitute ProductThe Internet has increased the reliability of businesses and organisations, as enterprises use fewerquantities to provide the same services as banks with low price minimum resources. As it is arecognised fact that customers demand convenience, low costs and high efficiency and can thenconveniently switch to other goods that meet their requirements. Money exchanges such aswestern union, payment such as PayPal, etc. Low charges provided via the internet. HSBCholding is also highly at risk from alternative goods.The Rivalry of Existing PlayersThere are small numbers of competitors in the business where HSBC works and on the otherhand, large giants simply demonstrate that neither company takes little action. That makes thecompetitor in the industry a weaker power. Competitors compete for positioning themselves andbecome the industry's market leader. This strengthens the competition. HSBC relies ondifferentiated goods and tactics that reduce the impact of the opponents' actions and preservetheir client base and presence on the market.

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Term
Fall
Professor
NoProfessor
Tags
Financial services, HSBC Holding PLC

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