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Competitive Strategies Operating In The Financial Industry

1831 words - 8 pages

Competitive Strategies Operating in the Financial IndustryECO/365July 02, 2014Competitive Strategies Operating in the Financial IndustryThis essay will explain the difference between market structures, Identify strategies used to best align the market in which the organization competes, as well as demonstration the negative and positive affect a firm may have and how it affects the market strategy. Recommending options to improve profit-making strategies, as well identifying the market structure this firm competes.Evaluate differences between Market StructuresThe definition of market structure is the behaviors and interactions of buyers and sellers with a significant effect of those ...view middle of the document...

What services are offered by the credit union, online banking, and bill pay,online deposits, loan types, also such things as locations, ATM fees, and bank card fees, all of these are items notonly the consumer looks at, also the competitors look at as well.3Assess how, market structure positively and negatively affects the firm, evaluate thestructures competitive strategies.Negative externalities are inconveniences, harm, or cost to a third party based on actions of others. On theother hand, positive externalities, a benefit received by someone who had nothing to do with generating the benefit.In the finance industry, suppose a teller accidently short changes a customer, the incorrect amount createsan overdraft due to the tellers mistake, the customer becomes very upset, closes their accounts, and move to acompetitor. Alternatively, a teller enters a deposit in a wrong account but under the same account holders name, allof this can create severe repercussions causing lose I customers, lack of client base growth, loss of revenue and veryimportantly the loss of trust of the firm.Identify the market structure the organization competes.Credit unions are financial institutions formed by an organized group of people with a common bond.Members of credit unions pool their assets to provide loans and other financial services to each other. Unlike banks,credit unions exist solely to serve their members; and do not have to pay dividends to an outside group ofstockholders. Instead, credit union income is returned to members in the form of better rates, lower fees andinnovative services.Credit unions promote the financial well-being of members, including those of modest means, through asystem that is cooperative, member-owned, volunteer-directed and not-for-profit - therefore a credit union will lookfor ways to keep the costs as low as possible for the members while remaining competitive and safe and sound,rather than looking for ways to make a profit for stockholders. Here are some facts about how credit unions operate:· Credit unions operate under a "one member = one vote" system, regardless of the amount of money themember has at the Credit Union.· Most credit unions have volunteer, unpaid boards that are elected by the members of the Credit Union.· Under federal and state laws, credit unions may only offer membership to individuals who belong to aselect group or defined by specific geographic boundaries.Banks are for-profit financial corporations controlled by a board and stockholders who hold influence in thebank based on the total value of their shares. Customers of a bank (who are not stockholders) do not own a financialinterest in the bank.4Here are some facts about how banks operate:· Boards are compensated for their service.· Profits of banks are divided among the stockholders.· Banks face limited or no restrictions on who they serve.Clearly indicate why the market structure was decided upon, and how this...

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