Porters Five Forces Model

This approach is widely used for competitive analysis. It is because of the high intensity of competition among companies there five main competitive forces.

Rivalry among competitive firms

It is a very powerful force among the competitive forces the strategies pursued by one firm can be successful only to extent that they provide competitive advantages over the competitor. These competitive strategies may be lowering prices, best quality services. The HBL offering very low charges on demand draft, telegraphy transfer, mail transfer and give other additional services to the customers.

Potential entry of new competitors

Whenever new firms easily enters a particular industry, the competition increases. Restrictions, tariffs, patents etc can stop new firm to enter into the business as per Banking industry is concerned this market is already very situated in Pakistan and there are banks with quality services and low charges. So there is no threat to HBL from potential entry and HBL is also a public sector bank because of that no other new bank not takes over it.

Potential Development of substitute products

This is the third factor affecting the competitions. There may be some other product can be substitute the product of that industry. For example, banks offering saving schemes in Pakistan and these schemes are also offered by GPOs in Pakistan so they must compete them in this field. If they offer low rates than GPOs so people will go to deposit in GPOs. People concentration high rates so thats why sawing PLS accounts are more then current accounts.

Bargaining Power of Suppliers

The bargaining power of supplier affects the intensity of competition, especially when there are a large number of suppliers. In case of banks the suppliers are customers they supply the money to banks. Now they must offer good services, quality, and safety. Low charges etc to customers. In

this field HBL is very good. They charge low charges on remittances. So thats it is a competition to other banks.

Bargaining Power of Consumers

When customers are concentrated or large, or buy in volume, their bargaining power represents a major force affecting intensity of competition. Now the number customers in Pakistan for banks are very high. Banks offering variety of products and services to their customers. HBL have a large number of customers. Now it must offer good services and products to their customers to attract them to come to HBL

Structure of Financial Sector in Pakistan

Scheduled Banks (47) - Commercial banks - Specialised banks NBFIs - Modarabas - Leasing companies - Mutual funds - Specialised financial (DFIs) - Investment banks - Housing Finance Companies

Specialised Banks

Commercial Banks

Foreign Banks (22)

Domestic Banks (25)