Porter's Five Forces Analysis of Nordea Bank
Read up on Case Study 2 (Nordea) from Jelassi and Enders (2008). Use the 5 forces analysis to examine the industry structure for the company. Use specific examples from the Case Study to support your analysis and argument points.
Following is the Five Force analysis of Nordea Bank by our group * Rivalry among existing competitors: Low Pressure * Nordea has a dominant role in the Nordic Region. * It faces completion in the Online Banking sector from banks like Wells Fargo, Citibank and Bank of America but they are low pressure as Nordea bank has more than twice the number of online transactions than all of them combined. * Although it does face competition from Swedish and Finish banks like Swedbank and Okobank but they too don’t pose much of a threat as there is very little difference between the products being offered. * Nordea bank has the early beginner advantage and has modelled their e-banking systems so as to facilitate reuse of existing technology that they already have, hence reducing costs. Unlike their competitors who will have to invest considerably higher sums of money to create such infrastructures. * Threat of new entrants: Low Pressure * As explained earlier, any new entrant will have to invest considerably huge sums of money to compete with the infrastructure and services offered by Nordea. * E-Identification and e-Signature services of Nordea are very well received by the local Post offices and telecom providers, providing Nordea with a uniquely high level of trust and brand loyalty, which is extremely difficult for any new entrant in the industry to achieve. * Bargaining power of channels and end users (buyers): Low Pressure * E-Banking operations are not free and the costs are eventually pushed on to the customers. Nordea is now removing the charges for it levies for usage, balance checks and WAP services. * The buyers don’t have a very high bargaining power as Nordea uses
Following is the Five Force analysis of Nordea Bank by our group * Rivalry among existing competitors: Low Pressure * Nordea has a dominant role in the Nordic Region. * It faces completion in the Online Banking sector from banks like Wells Fargo, Citibank and Bank of America but they are low pressure as Nordea bank has more than twice the number of online transactions than all of them combined. * Although it does face competition from Swedish and Finish banks like Swedbank and Okobank but they too don’t pose much of a threat as there is very little difference between the products being offered. * Nordea bank has the early beginner advantage and has modelled their e-banking systems so as to facilitate reuse of existing technology that they already have, hence reducing costs. Unlike their competitors who will have to invest considerably higher sums of money to create such infrastructures. * Threat of new entrants: Low Pressure * As explained earlier, any new entrant will have to invest considerably huge sums of money to compete with the infrastructure and services offered by Nordea. * E-Identification and e-Signature services of Nordea are very well received by the local Post offices and telecom providers, providing Nordea with a uniquely high level of trust and brand loyalty, which is extremely difficult for any new entrant in the industry to achieve. * Bargaining power of channels and end users (buyers): Low Pressure * E-Banking operations are not free and the costs are eventually pushed on to the customers. Nordea is now removing the charges for it levies for usage, balance checks and WAP services. * The buyers don’t have a very high bargaining power as Nordea uses