Banking Industry in Bangladesh:
Bangladesh is a third world country with an under developed banking system, particularly in terms of the services and customer care provided by the government run banks. Recently the private banks are trying to imitate the banking structure of the more developed countries, but this attempt is often foiled by inexpert or politically motivated government policies executed by the central bank of Bangladesh, Bangladesh Bank. The outcome is a banking system fostering corruption and illegal monetary activities/laundering etc. by the politically powerful and criminals, while at the same time making the attainment of services or the performance of international transactions difficult for the ordinary citizens, students studying abroad or through distance learning, general customers etc. The banking industry composed of 4(four) state owned commercial banks, five specialized banks, thirty nine private commercial banks, and nine foreign commercial banks.
Banking Industry explained by Porter’s 5 factors:
Michael E. Porter developed Five factors that act together to determine the nature of competition within an industry that affect a business ability to compete. These are: * Threat of new entrants to a market * Bargaining power of suppliers * Bargaining power of customers /buyers * Threat of substitute products * Degree of competitive rivalry They are discussing below: * Threat of new entrants to an industry
In the banking industry threat of new entrants are very high because there are 57 banks having many branches. The banking system is composed of four state-owned commercial banks, five specialized banks, thirty nine private commercial banks, and nine foreign commercial banks. So the competition is very high in this industry and every bank try to improve their services, internal environment, providing new