Industry Analysis - cases

SWOT Telecom Industry

Strengths
Huge potential 75% teledensity in urban and 33% in rural areas Good growth rate FDI limit (74 100%) Private sector share 80% in revenue

Weaknesses
Poor infrastructure large call drops Late adoption of new technology (3G, 4G) Very competitive market (12 players) Strong regulation by Govt. Huge capital cost Rate war lowering revenues

Opportunities
New advanced services 3G, 4G More value added services TV, banking, videos, music, ticketing, DTH Production and export of telecom equipments by India- rising Young population increasing Income levels rising Fibre connectivity to 2.5 lac villages by 2014

Threats
Changing telecom policies Declining ARPUs Price war declining tariffs Fast changing technology Content piracy

Porter Model Banking Industry

Entry Barriers
License from RBI Compliance of RBI guidelines Investment in Technology Branch Network Capital requirement Competition from existing players Human resources requirement Overall rating --- (+)

Bargaining power of suppliers

Deposits, Services, network, technology main suppliers huge deposit suppliers in India No problem for existing banks 18% growth in deposits of Indian banks(2011) Overall service improvement, TU problem in PSBs If interest fall significantly, investors may look for alternatives Very low bargaining power Overall rating --- (+)

Bargaining power of customers

High for good creditworthy borrowers Interest rates and liquidity impacts credit growth (23% growth in 2011) Switching attitude low relationship builds GDP growth will require credit expansion Limited resources of alternate sources Overall rating (+)

Competition
Very High PSBs, Private banks, foreign banks, coop banks (service quality effects) Switching attitude low NBFCs, Post Office deposits, Mutual Funds, Equity Markets, Debt instruments Entry of new private banks to open Undifferentiated services and technology increases competitions

Competition
Slowdown in economy will increase competition Risk of taking risky projects Overall rating --- (+)

Substitutes
NBFCs, Debt raising, equity markets, suppliers credit- but small amounts and cost higher Deposits Post office, Co deposits, NBFCs Overall no substitute for bank credit volume and rate

Overall rating --- (+)

Overall rating
All five forces have -- positives Industry strength - positive