ANZ Bank Based on Porters Five Force Model Case Study

ANZ Bank Based on Porters Five Force Model - Case Study Example Substitutes are those products which are quite different in form but which offer a real alternative to the industry competitor’s product (Michael E Porter and sustainable competitive advantage, Chapter 4, p.40). A threat of substitute products means the easiness in changing consumer behavior to opt for substitute products. For example, ANZ is facing stiff challenges from other prominent banks domestically and internationally. Competitors always try to produce goods of the same quality at cheaper prices. The availability of more attractive substitute products will drive away customers from ANZ. ANZ is currently focusing more in the Asian market. â€Å"In a number of Asian countries, foreign banks cannot enter the market on an unrestricted basis† (Lewis, 2007). The restrictions in this region are a big handicap for ANZ. For the ample, Indian national banks can offer many products to their customers like mutual funds, term deposits, etc whereas it is difficult for ANZ to o ffer such products to Indian customers. The threat of new entrants depends on the barriers to entry. Barriers to entry depend on economies of scale, product differentiation capital requirements etc (Michael E Porter and sustainable competitive advantage, Chapter 4, p.35). The threat of new entrants in the second element in the analysis of an organization with respect to Porter’s five force theory. New entrants always weaken the power of an organization. In the case of ANZ, globalization has raised many concerns about the entry of new international banks in Australia and other countries. It is easy for an Indian or Chinese bank to establish the business in Australia at present because of the liberalized market conditions. In fact, the recent recession has destroyed the backbone of many of the Australian banking organizations like ANZ. On the other hand, China has not faced much trouble with respect to the recession and hence it is easy for Chinese banks to enter the Australian market and raise challenges to ANZ.