Capitec Bank and the Industry

CAPITEC BANK AND THE INDUSTRY

CONTENTS

1. Introduction……………………………….……..………………………….…….3

2. Industry Analysis………………………..………………………………………....3

2.1 PESTL Analysis………………………………………………………..…3

2.1.1Political……………………………………………………………….…..3

2.1.2 Economic…………………………………………………………...…...3-4

2.1.3 Social……………………………………………………………..……...4

2.1.4 Technological………………………………………….……………..…4

2.2 Porters five force model…..………………………………………………….….5-7

2.3 Strategic Group Analysis…………………………………………………….….5-8

2.4 Resources and Capabilities……………………………………………….…….8

2.4.1 Key Success Factors……………………………………………….….8-12

3. Should Capitec Expand?.................................................................................13-15

4. Conclusion…………………………………………………………………………15

5. References…………………………………………………………..………………16

Word count: 3023

1. INTRODUCTION

According to Keraan (2010) the lower end of the “economic pyramid” presents significant growth area for banks that enter this market. South Africa has over 13 million people who are unbanked and no access to formal financial services.

Banks were not offering microcredit; therefore borrowers had to resort to pawnbrokers, informal operators, mashonisas and other systems for example stokvels, burial societies and rotating savings and credit associations (Townsend and Mosala, 2006).

The chief executive for marketing and corporate affairs of Capitec Bank saw a need to grow its business in a different niche, the lower income market (Townsend and Mosala, 2006).

The purpose of this analysis is to assess the strategic position, attractiveness and sustainability of Capitec Bank.

2. INDUSTRY ANALYSIS

2.1 PEST Analysis

PEST (political, economic, social, technological) (Open University, 2005: 10) analysis of the industry sector is used to investigate important factors that affect the industry and influence the companies in that sector.

2.1.1Political

This factor...