I need a reply to my classmate post Here is the topic: The five forces are: Riva

Question

I need a reply to my classmate post

Here is the topic:

The five forces are:

Rivalry among existing competitors

The bargaining power of Suppliers

Threat of New Entrants to the market

The bargaining power of Buyers

Threat of Substitute Products/Services

Select ONE of the industries below and identify a specific company in that industry and identify the key drivers of competition for that industry and specifically for the selected company. Explain how those external competitive forces are affecting the industry and company and the effect of those forces on the overall strategic planning processes uniquely for that company and generally for that industry. Offer supporting rationale for your explanation and be sure to reference your statements using proper APA formatting.

Here is what they posted: Bank of America (BoA) is one of the leading banks in the United States (U.S.). The key drivers of competition for Banking, specifically for BoA are the growing technology of mobile banking services and new digital commerce companies facilitating financial transactions (Mummigatti, 2015). When comparing these key drivers to the five competitive forces Michael Porter identified, you see all five forces in action. First the threat of new entrants in the market, companies such as, Google, Starbucks, Paypal, FaceBook, and Amazon, as well as, newcomers Square and Venmo, are building products and services which serve a niche need while facilitating financial transactions. These companies are handling all aspects of financial transactions including credit financing and advisory functions, sucking up most revenue-generating activity the traditional banks are engaged in (Mummigatti, 2015). This sets off the following three forces, the bargaining power of suppliers, the bargaining power of buyers, and threat of substitute products/services with these new companies dominating the mobile banking scene by facilitating financial transactions, including credit financing and advisory functions gives the customer endless options when it comes to transferring money to family, friends, and customers, as well as, financing their next big purchase – the power of the buyer has increased. These companies are giving the banking customers endless substitutes for products/services that traditionally banks were the only ones able to provide such a service. These new companies have traditional banks going back to the drawing board to see how they can capitalize on the global trend of mobilizing all customer banking needs. Banks need to focus on the digital transformation of payments, particularly through smartphones and tablets (Groenfeldt, 2014). Banks are pulling out of the brick and mortar business and going virtual. In 2016, BoA closed hundreds of branches in an effort to focus more on mobile, online and ATM services (Shiklo, 2017).

Explanation / Answer

I agree that the total economy is going through a digital transformation and the convenience provided by the digital facilities have actually decreased the footfall of customers in the bank and that is evident from the initiative of bank of America by closing down branches and focusing on digital platform. We can understand that this digital economy transformation is the next big thing and customers and even businesses will resort to such options but the physical presence of banks is also important because it provides a sense of work culture and also employs various individuals and we cannot deny that the banks have employed thousands of individuals even today. I believe that the digital growth that we encounter should be welcomed but with consideration to the perks that the brick and mortar banks provide. If employment is reduced there is no pint of a digital economy which is weak so it is better if maintain a balance between offline and online banking which will be helpful to the society.

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