I have worked for International Bank of Commerce (IBC) for more than four years. This bank is a chartered bank own by the International Bancshares Corporation headquartered in Laredo Texas. It is also considered one of the largest minority-owned bank in the United States, and it is one of the largest banks in Texas. This industry is characterized by the potential to serve the financial needs of customers in the borders of Mexico and USA. This bank provides services such as, lending, saving, depositing, mortgage and investing. However, as other industries this particular one also faces challenges that can affect its sustainable competitive advantage. I remember that in the four years that I have worked for banking, I have seen many federal regulations that changed this industry in many ways. For example a major change that effected our industry was the federal regulation where banks were not allowed to charge overdraft fees to customers more than six times in a period of 24 hours. This regulation reduced the profits of many banks and decreased its income resource.
Analyzing the banking industry I used the Porter 5 Forces which includes the following threats;
The Threat of Entry
Due to the large sum of capital that is required to open a bank and the increase of federal regulations it is difficult for new entrants to survive in this industry. However, according to the “FDIC from 1977 to 2002 an average of 215 banks were opened yearly and an average of 253 banks failed yearly” ("Porter 's 5 Forces and the Banking Industry”). Why are so many banks failing? There are many reasons because many banks are failing every year, these includes; lack of trust, poor capital, and many people prefers to put their money on a well...
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...raining is one of the main resources for competitive advantage, it takes so much time from employees and raises can be limited based on the high cost of this training. Ever since I started working for a company as a manager I have seen a significant percent of turnover. This turnover is based on the low pay that classroom training causes to the firm. I am not saying that training is not a good resource for the company but this has to be balanced and better organized to be able to cut some expenses. When the company has a high rate of turnover this breaks customer relationships, trust and employee satisfaction. My recommendation is to cut unnecessary expenses and make an action plan to value its employees. Also, the pay needs to be higher to catch up with the competition. Employee satisfaction leads to better customer service and more customers coming in to the bank.
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