There are currently nineteen banks operating in the U.K and Sainsbury’s is one of the smallest as it is а relatively new entrant itself. It only has 1.5million customers in comparison to Barclays 13million. The larger high street banks don’t compete in the same business environment as Sainsbury’s; is actually the first of its kind in the banking world, as it doesn’t offer day-to-day banking but а mixture of keenly priced credit products.
These products are aimed largely at existing Sainsbury’s customers and leverage the brand name of the company and use promotions in Sainsbury’s stores as the main point of access for customers. Picking up а loan with your shopping is as physically easy as it is financially attractive.
Other large retailers such as such as Wal-Mart, Asda and Safeway are copying this approach and offering similar products, so there is clear threat of entrants but the threat is limited as these competitors rely primarily on а supply of customers through their supermarket outlets. In this scenario Sainsbury’s bank is more likely to be seen as а threatening new entrant by High Street banks rather than be concerned with other new entrants.
For Sainsbury’s property-related companies there is а wide range of opportunity for new entrants from other large retail companies to smaller-scale developers. In this market the considerable resources of the parent company make Sainsbury’s а powerful player in the property market with little threat from new entrants.
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