Question

Please provide Porter 5 forces analysis for sharia credit card versus conventional credit card, thanks

Answer 1

Michael porter five forces analysis for determination of the competitiveness of the business.

These are as follows in terms of Sharia credit card and conventional credit card-

A. Threat of new entrants-this is related to New Market players coming into the whole industry and market entrance would be lesser when it comes to Sharia credit card, and when it comes to conventional credit card, large number of companies are trying to venture into credit card business and it is very competitive.

B. Bargaining power of buyers- Bargaining power of buyers are not much in Sharia credit card because they are based upon no interest and there would be larger bargaining power in case of conventional credit card because those who are providing better service attracting more buyers.

C. Bargaining power of suppliers- Bargaining power of suppliers is more in case of conventional credit card because the margin would be higher whereas in Sharia credit card, there would not be more margin to bargain for suppliers.

D. Threat of substitutes-there are large number of substitutes which are available in conventional credit card because this type of business is followed in most of the parts of the world where as Sharia credit card is inclined towards no interest and there are not much substitute available because country will have to follow Islam.

E. Competitive forces-there would be a larger rivalry in case of conventional credit cards whereas there would be a lower rivalry among existing competitors when it comes to Sharia credit card.

Thee both types of businesses are completely different in nature and they follow different kind of principle, so there would be different competitive factors.