Industry Analysis on Axis Bank

In: Business and Management

Submitted By tribinroy
Words 1175
Pages 5
Michael Porter’s Five Forces Model

Porter's five forces analysis is a framework for industry analysis and business strategy development formed by Michael E. Porter. It draws upon industrial organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. A very unattractive industry would be one approaching "pure competition", in which available profits for all firms are driven to normal profit.

In case of Axis Bank, according to us, the Porter’s Five Forces Stands as shown below:

| Weak | Neutral | Strong | Fierce | Industry Rivalry | | | | | Supplier Bargaining Power | | | | | Buyer Bargaining Power | | | | | Threat Of New Entrant | | | | | Threats of Substitute | | | | |

Industry Rivalry
Industry rivalry means the intensity of competition among the existing competitors in the market. Intensity of rivalry depends on the number of competitors and their capabilities. In case of Axis bank, we have found that this particular parameter is fierce.
Since March 2002, Bankex (Index tracking the performance of leading banking sector stocks) has grown at a compounded annual rate of about 31% as shown below.

After a very successful decade, a new era seems to have started for the Indian Banking Industry. If we look at 5 years historical performance of different types of players in the banking industry, public sector bank has grown its deposits, advances and business per employee by the highest rate – 21.7%, 23% and 21.1% respectively. As far as net interest income is concerned, private banks are ahead in the race by reporting 24.2% growth, followed by pubic…...

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