• Only foreign rating agency to be recognized by the Securities and Exchange Commission (SEC) in the U.S. as a Nationally Recognized Statistical Rating Organization (NRSRO).
• Leading European credit rating agency.
• Highly regarded in rating banks.
• Sovereign team that has made IBCA internationally recognized.
• Worldwide presence .
Weaknesses.
• Not a clear Asian market strategy .
• Lack a lot of the comprehensive services that Moody's and S&P offer.
• IBCA locations are widely spread around the world, causing intricacies amongst management .
Opportunities.
• China is switching to a free market situation in which borrowing is done on a rational basis, instead of at the government's request. Opportunity to strengthen their presence.
• Expand in the Asian and Latin American market (major growth potential).
Threats.
• Global competition.
• Top two rating agencies (Moody's and S&P) in the world are better known in the Asian market .
• Economic inflation.
• Foreign exchange rates.
Competitive Environment.
In the credit rating industry, two firms dominated in the United States and worldwide: Moody's Investor Service (Moody's) and Standard & Poor's (S&P). Both of these firms had revenues of approximately $400 million. Other major players included Fitch Investors Service, Duff & Phelps Credit Rating Company, and IBCA with approximately $65 million, $53 million, and $30 million in revenues, respectively (Gaik Eng, 1999). From the perspective of Porters Five Forces, we will look at the competitive rivalry between firms, the bargaining power of the suppliers (credit rating industry) and the consumers, the threat of substitutes, and the threat of new entrants. .
First, I want to look at the competitive rivalry between firms. The various players mentioned above are in the same sector or niche and are trying to accomplish the same things.