Case 24: Vancity Credit Union

Environmental Analysis:

Technology- 1) trend is towards online banking and ATM`s and increased access from personal

computers

-forces Vancity to invest money in technology

-takes away the personalization aspect, which is their primary focus and competitive edge.

2) -trend toward data-mining techniques

-allows Vancity to create better customer relationships in light of the shift towards

computers

Sociocultural-1) trend toward people having busier lifestyles and wanting convenience through use of

ATM`s, internet banking

Forcing bank institutions to offer greater service, broader product offerings , and flexibility

Political 1)trend- new legislation opened door to competition from brokers, insurance companies and

other financial competitors

-Opened doors to added competition on top of the large institutions

Five Forces

Threat of new entrants- medium barriers to entry, because Vancity has a product that is somewhat differentiated (strong customer and community loyalty), government has opened doors to allow new entrants and easier access to the market, smaller economies of scale than banks, and medium switching costs.

Threat of substitute products-High- Many other financial institutions available besides credit unions, example-chartered banks, trust companies, insurance companies, brokerage houses, investment banks.

Rivalry of competing firms- High- Big Six dominate the industry with 92% of chartered bank total assets. Available capital to install latest technology.

Power of Buyers- High- Due to the fact that they have many available choices. Demand greater service as well as, convenience. Have an influence on the board of directors, controlled by the members who use the service.

Power of Suppliers- High-customers are both buyer and supplier of capital. They decide where to invest their money and the capital they are lending provides the credit union...