T.D Bank follows a focused generic business strategy. They are a customer focused Bank who is constantly working on customer relationship. They focus on creating convenience for the customer by building new branches, staying open later than competitors.
Buyer Power is not that high. The individual doesn't pose much of a threat to the banking industry, but one major factor affecting the power of buyers is relatively high switching costs. If a person has a mortgage, car loan, credit card, checking account and mutual funds with one particular bank, it can be extremely tough for that person to switch to another bank. In an attempt to lure in customers, banks try to lower the price of switching, but many people would still rather stick with their current bank.
There are many substitutes in the banking industry. Banks offer many different services over and above taking deposits and lending money, but whether it is insurance, mutual funds or fixed income securities, chances are there is a non-banking financial services company that can offer similar services. For example when financing a car, the actual car company can offer 0% interest, but if you take a car loan from a bank the interest rate might be 5-10%.
The banking industry is extremely competitive. The financial services industry has been around for hundreds of years, and just about everyone who needs banking services already has them. Because of this, banks must attempt to lure clients away from competitor banks. They do this by offering lower financing, preferred rates and investment services. The banking industry is in a race to see who can offer the best and fastest services.
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