Contents
QUESTION#1. ABC Bank, a subsidiary of an International Bank has experienced a serious decline in its business
performance. The deposits are down, the loan portfolio has a lot of bad debts and head office is planning to slash
the level of investment in the bank. Use Porter ‘s Five Forces to establish the impact of competition and other
elements on the overall performance of the bank. Explain how ABC Bank can use Porter‘s Five Forces Model in
evaluating why there has been a decline in performance. Also analyses the external environment using the
PESTLE factors that could potentially impact the bank.............................................................................................2
QUESTION#3 Consider a firm that has successfully implemented a generic strategy of overall “Cost leadership”.
Identify the functional strategies (logistics, production, marketing, human resources and the like) which would
be needed to help the firm to successfully implement its chosen strategy and be profitable..................................4
QUESTION#4 Companies like L’Oréal have multiple businesses like Beauty, Skincare, Medical division, Hair care.
a. Compared to a firm present in only the Beauty business, do you think L’Oréal has an advantage (or a
disadvantage) by being present in the other categories? Explain your answer........................................................6
QUESTION#5 Hassan is a leading detergent manufacturing company. The firm has more than twenty-five product
types. These have been developed over a period of its ten-year existence. Some products are very successful
while others have not performed well. The challenge for the board has been the formulation of strategy policy in
the way the company manages the portfolio of products. As a newly recruited qualified Strategist, your advice is
being sought to address the following questions the Product manager has prepared as input into his paper to the
Board........................................................................................................................................................................8
QUESTION#2 Take a retailer which you are familiar with and use the VRIO framework to assess how the
retailer’s resources fare with regard to providing the firm a sustained competitive advantage. It would be useful
in this regard to classify the firms’ tangible and intangible resources and examine each of them separately on
whether they fulfil the valuable, rare, inimitable/non-substitutable and organizationally exploited conditions.
Finally, assess whether your assessments concerning the retailer’s resources match the retailer’s performance.. 9
Bibliography............................................................................................................................................................11
, QUESTION#1. ABC Bank, a subsidiary of an International Bank
has experienced a serious decline in its business performance.
The deposits are down, the loan portfolio has a lot of bad
debts and head office is planning to slash the level of
investment in the bank. Use Porter ‘s Five Forces to establish
the impact of competition and other elements on the overall
performance of the bank. Explain how ABC Bank can use
Porter‘s Five Forces Model in evaluating why there has been a
decline in performance.
Also analyses the external environment using the PESTLE
factors that could potentially impact the bank.
ANSWER: Porter's Five Forces is a bothered trying strategy framework that takes into account Michael
Porter's five competitive forces. He is a scholar who has published significantly on economic ideas and
commercial methods. He was educated at Harvard and Princeton and is now a professor at Harvard
Business School. He has written numerous books on strategy. These forces affect a company's
profitability by affecting the quantity and strength of its rivals
in the market, possible new market entrants, suppliers,
customers, and replacement products. Business strategy can
be guided by a Five Forces analysis to boost competitive
advantage.
Porter’s 5 forces are as follows: Power of suppliers; Power of
buyers; substitutes/product/services; New entrants;
Competitive Rivalry.
Major banks are attempting to meet all of a customer's
financial needs under one roof as a result of industry-wide
consolidation in the banking sector. As consumers are more
inclined to accept one known bank with reputation and name
to hold all of their accounts and meet all of their financial
needs, this consolidation strengthens the role of trust as a barrier to entry for other banks wanting to
compete with established banks. In the end, the banking sector has relatively low entrance barriers. It
is very difficult for new banks to enter the market and provide the same level of trust and service as a
major bank, because the major names keep updating their portfolio to the latest technology that some
banks can’t do on time thus suffer.
Same is the case with ABC bank. Let’s evaluate the downfall of the bank according to porters 5 force
model. These are made up of the external factors that have an impact on a company's capacity to serve
its clients and turn a profit. A corporation must typically reevaluate the market when any of the forces
shift.
POWER OF SUPPLIERS: Any bank's basic resource is capital, which comes from four major sources
1. Deposits from clients.
2. Loans and mortgages.
3. Securities backed by mortgages.
4. Credit lines from additional lenders.
(additional sources [such fees] contribute to varying degrees to a lesser extent).
The ABC bank may be certain that they have the resources needed to meet their clients' borrowing
QUESTION#1. ABC Bank, a subsidiary of an International Bank has experienced a serious decline in its business
performance. The deposits are down, the loan portfolio has a lot of bad debts and head office is planning to slash
the level of investment in the bank. Use Porter ‘s Five Forces to establish the impact of competition and other
elements on the overall performance of the bank. Explain how ABC Bank can use Porter‘s Five Forces Model in
evaluating why there has been a decline in performance. Also analyses the external environment using the
PESTLE factors that could potentially impact the bank.............................................................................................2
QUESTION#3 Consider a firm that has successfully implemented a generic strategy of overall “Cost leadership”.
Identify the functional strategies (logistics, production, marketing, human resources and the like) which would
be needed to help the firm to successfully implement its chosen strategy and be profitable..................................4
QUESTION#4 Companies like L’Oréal have multiple businesses like Beauty, Skincare, Medical division, Hair care.
a. Compared to a firm present in only the Beauty business, do you think L’Oréal has an advantage (or a
disadvantage) by being present in the other categories? Explain your answer........................................................6
QUESTION#5 Hassan is a leading detergent manufacturing company. The firm has more than twenty-five product
types. These have been developed over a period of its ten-year existence. Some products are very successful
while others have not performed well. The challenge for the board has been the formulation of strategy policy in
the way the company manages the portfolio of products. As a newly recruited qualified Strategist, your advice is
being sought to address the following questions the Product manager has prepared as input into his paper to the
Board........................................................................................................................................................................8
QUESTION#2 Take a retailer which you are familiar with and use the VRIO framework to assess how the
retailer’s resources fare with regard to providing the firm a sustained competitive advantage. It would be useful
in this regard to classify the firms’ tangible and intangible resources and examine each of them separately on
whether they fulfil the valuable, rare, inimitable/non-substitutable and organizationally exploited conditions.
Finally, assess whether your assessments concerning the retailer’s resources match the retailer’s performance.. 9
Bibliography............................................................................................................................................................11
, QUESTION#1. ABC Bank, a subsidiary of an International Bank
has experienced a serious decline in its business performance.
The deposits are down, the loan portfolio has a lot of bad
debts and head office is planning to slash the level of
investment in the bank. Use Porter ‘s Five Forces to establish
the impact of competition and other elements on the overall
performance of the bank. Explain how ABC Bank can use
Porter‘s Five Forces Model in evaluating why there has been a
decline in performance.
Also analyses the external environment using the PESTLE
factors that could potentially impact the bank.
ANSWER: Porter's Five Forces is a bothered trying strategy framework that takes into account Michael
Porter's five competitive forces. He is a scholar who has published significantly on economic ideas and
commercial methods. He was educated at Harvard and Princeton and is now a professor at Harvard
Business School. He has written numerous books on strategy. These forces affect a company's
profitability by affecting the quantity and strength of its rivals
in the market, possible new market entrants, suppliers,
customers, and replacement products. Business strategy can
be guided by a Five Forces analysis to boost competitive
advantage.
Porter’s 5 forces are as follows: Power of suppliers; Power of
buyers; substitutes/product/services; New entrants;
Competitive Rivalry.
Major banks are attempting to meet all of a customer's
financial needs under one roof as a result of industry-wide
consolidation in the banking sector. As consumers are more
inclined to accept one known bank with reputation and name
to hold all of their accounts and meet all of their financial
needs, this consolidation strengthens the role of trust as a barrier to entry for other banks wanting to
compete with established banks. In the end, the banking sector has relatively low entrance barriers. It
is very difficult for new banks to enter the market and provide the same level of trust and service as a
major bank, because the major names keep updating their portfolio to the latest technology that some
banks can’t do on time thus suffer.
Same is the case with ABC bank. Let’s evaluate the downfall of the bank according to porters 5 force
model. These are made up of the external factors that have an impact on a company's capacity to serve
its clients and turn a profit. A corporation must typically reevaluate the market when any of the forces
shift.
POWER OF SUPPLIERS: Any bank's basic resource is capital, which comes from four major sources
1. Deposits from clients.
2. Loans and mortgages.
3. Securities backed by mortgages.
4. Credit lines from additional lenders.
(additional sources [such fees] contribute to varying degrees to a lesser extent).
The ABC bank may be certain that they have the resources needed to meet their clients' borrowing
