Assessment of Commonwealth Bank Strategy-Free-Samples for Students

Question: Evaluate the performance of their current (or past) strategy by identifying their vision, mission, values, objectives and strategy. Examine the external and internal fit. Assess potential impact of external and internal fit on performance against their objectives. Recommend changes to improve their performance. Answer: Introduction The commonwealth bank in Australia is one of the leading banks all over the country. It has a huge customer base and spreads all over about New Zealand, Asia, the United States and the United Kingdom. The Australian Commonwealth Bank is in common called or known likely as Commonwealth Bank or CBA. It is not only a multinational entity but at the very same time it is also a multi dimensional bank that provides its customers with a number of products and services (Commbank.com.au 2018). Taking unto account its financial services, the wide array of services that the bank provides are retailing, business making fund and institutional banking in the sector financial services. Apart from that the bank also financial services like funding managements, making and selling insurance policies, services related to broking and investment practices. Thus owing to the wide array of the products and services that the bank provides, there is no iota of doubt that the Commonwealth Bank is one of leadi ng chain of banks in Australia and it has all the grounds to be called the same. Considering its achievements, it would be apt to assert that the bank has been able to make its position in the Australian securities exchange that claimed the bank to be one of the largest bank in Australia, as in August 2015. It is a public sector organization that was founded in the year 22nd December, 1911. While its foundation, it was a government bank. It turned a public service center only in the year 1991, about 11 years ago. The gigantic structure of the bank can be analyzed from its number of branches that is spread over four countries and continents. Having more than 4,300 ATM counters, it has more than 1100 branches all over the globe (Commbank.com.au 2018). Common wealth bank has its headquarters situated in Darling Harbour, Sydney in Australia. Assessment of Commonwealth Banks strategy The assessment of Commonwealth bank of Australia can be done through a thorough comparison of the internal and the external fit of the company (Sia, Soh and Weill 2016). The potentiality of the business of the organization can be analyzed only through a proper assessment of the same. However, this study would not be considering the factors like the organizational structure, the organizational credentials and matters and the functional department of the company in order to analyze the assessment of the company. In this particular context it would be apt to assert that Commonwealth bank has a total of 51,800 employees as recorded in 2017. Considering its revenue, net income and total assets, its a$26.005 Billion, A$9.881 Billion and A$976.374 Billion respectively. Moreover, it has a total equity of A$63.716 billion (commbank.com.au). Mission Statement of the company The organization has an excellent base of loyal customers and all the credit goes to the way it has been able to adhere to its mission since the tie it has been established. The initiatives and policies that are undertaken by the bank are extensive in nature and all the commitments made to its customers are properly delivered and fulfilled in time. The companys mission is targeted at not only selling its policies and insurances, but at the same time it also supports its customers by providing financial advices. At times, these advices are provided free of cost. Generic Strategy Generic strategy is essentially a concept that was discussed by Porter, focusing o three main strategies (Travostino et al. 2015). These are overall cost leadership, differentiation and focus. It can be explained an a practice where sales that are low in cost will definitely need its products to be sold in large quantities. Differentiation part will be excluded in this context and at the same time the focus of the organization will be wither narrow or broad, that is, either it will have specific target customers or the organization will have customers in general (Dalal-Clayton and Sadler 2014). An assessment of Commonwealth bank can be made with the application of Porters generic strategy. Common wealth Bank has placed itself as cost leader. However, the range of products are limited as compared to its competitors like National bank Australia, ANZ and Westpac. The focus of the organization is narrow (Kemper and Kalafut 2014). Business model of Commonwealth Bank Key Partners Communities related to financial services Companies selling and distributing credit cards Investors Subsidiaries Regulatory agencies Jinan City commercial bank Hangzhou City commercial bank are the two Chinese banks that the organization deals with strategic cooperation agreements ATM service desk (Armguards) Aussie home loans and Wizard home loans are into joint partnership with the organization Key Activities Manufacturing credit cards Transaction and savings ad current accounts Risk assessment Customer service Intermediation related to financial services Investment plans Customer acquisitions Loans Governance and aid related to corporate services Savings and transaction accounts Balancing Value Proposition Commonwealth bank is the largest and within the first four of Australian banks Handling risk with responsibility Steady and sustainable growth Retail banking services Personal and small scale customers are aided with business help, that is finance Management of wealth. That is management platform, master funds, supports related to financial advices, supports like on the grounds of insurance and business, superannuation Customer Relationships Automation of banking services Community users Strong security systems Excellent reputation of the bank Convenience of the customers are taken as priority Ubiquity All the services are anti-personal. Customer Segments It serves the government sector Has services related to credit and card holders Merchants Serves the retail sectors Serves corporate customers Serves industrialists Key Resources More than 1100 branches all across the globe More than 4300 ATMs in total Considering its branches and ATMs, it has the largest network Its wide availability Strong base of loyal customers IT capabilities Huge network Potential employees The services and products are in wide range. It serves its customers with bank accounts, credit cards, financial advices and plans, home loans, car loans, insurance, superannuation, personal loans etc Channels Newsroom Social networking sites like facebook, instagram, twitter Mobile banking Information on its personal website Online banking NetBank The huge network of branches and ATMs. Cost Structure It has excellent network which needs to be maintained In the maintenance of IT infrastructure development Has wide array of international branches Security system Its presence/availability Compensation structure Taxes Costs related to finance maintenance Rewards and interest paid Revenue Streams Premium related to policies The returns that are made on policies on investment plans. The financial revenues, that is the interests hat are credited on commissions and service fee pf certain products Value Curves Banking sectors in Australia is already an independent and established sector that has witnessed continuous growth, since its birth. More or less the whole of the country is connected with proper banking branches and ATMs. It would not be wrong if asserted that most of the Australian market is near about saturated in the context of banking services. However, there has been a number f factors that have added as a positive catalyst in the growth of banking sectors all over the place (Jaber 2016). The most important of those are globalization, an ever increasing population, the inflation is the purchasing power of customers, edging competition against small scale sectors even, growth of IT and finance industries, all over innovation and development (Ali et al. 2014). Where ever is the need of finance, is the need of banks. At the beginning, in the year 1911-1941, Commonwealth Bank emerged in the Australian market as a Blue Ocean. Although, at present, Commonwealth bank is positioned as red ocean in the market. It came upon with attractive and innovative plan, the concept of banking and its services were new and hence was into blue ocean. However, there are numerous banks in the market now that more or less provides the same products and services to the customers (Johnson 2016). Only the rate of interests are different which make it a red ocean now. Since, the organization focused on a narrow range of services, it was under blue ocean. The major grounds that Commonwealth Bank is ahead of the big four are its excellent customers services, low rates of interests, easy accessibility and support to customers. Assessing business strategy of Commonwealth Bank Strategies are made in order to achieve the mission and vision of the company. The key success measurement criteria as laid out by the company are as follows Improved metrics related to customer service Inflation/deflation of shareholder returns Maintenance of fame of the organization The business strategy of commonwealth banks is four dimensional, focusing on customer service, business banking, technology and operational excellence, and trust and team spirit. It is prioritized the most by the organization, since it is a customer driven company. the company aims at reinvigorating sales and services. Employees of the company are invested upon in order to attain skilled employees (Schwartz et al. 2016). In the context of business banking, commercial purpose of business banking services are offered in almost all of the retail chains. The technology and operational excellence department aims in the implementation of skilled sourcing and designs plan to enhance the efficiency of the process. Trust and team spirit is another important section that aims at strengthen the bond of coordination between the employees (Burns 2016). It also aims at better involvement of community and apart from that, it also focuses on its customers safety (D, Mashruwal and Tripathy 2014). Pestle analysis of Commonwealth Bank Australia Political impact: The political relationship of Australia with China and other Asian countries is a bit sour lately, which may impact the business (Scholes 2015) Economic impact: economy is evolving but at the same time population is aging Social impact: diversity has been the marking factor of cosmopolitan diversity Technological impact: The advent of modern technology has molded people to invest in next generation financial technology. That would help the organization to innovate a firm technical framework. In the context of banking sector, cyber security is still a major area of threat. Legal: There are certain litigations against the bank. Issues like allegations regarding money laundering have also been a concern. Environmental impact: banks can be influenced through a strict regulation related to water management and river management. Banks can be charged of legal actions on the account of its failure to explore the risks related to climatic conditions (Johnson 2016). External Fit External Fit refers to the external trading conditions of the organization. This external fit is applicable for all the Australian banks in the market. Since, these banks also go through the same rules and regulations related to legal structures, financial services, insurance covers etc. all the external fit is comparable to the other rival banks that are present in the market and mostly all the rivals go through the same rules (Armstrong et al. 2015). Yet, the difference lies in the way Commonwealth Bank approaches its customers. Though, all of the banks is scattered almost in the same geographical manner, not all the banks are always ready to help its customers. Due to huge rush in the starting and the end of financial years, most of the banks keep its customers waiting (Cascio 2018). Commonwealth utilizes this time in providing assistance to its customers over e mails, phone calls and online chats. It ensures that its customers are engaged with bank executives and thus, do not swi tch to other financial service providers. Apart from that the organization has also made car and home loans readily available to customers with least possible delay (DeYoung and Huang 2016). Internal Fit Most of the banks follows the same approach of internal fit. However, all the internal approaches are nit same in all of the banks (Sengupta et al. 2015). Though most of the internal approaches are similar, dissimilarity too, does prevail. The key factors that creates a difference in Commonwealth Bank is in its approach to make different types of marketing and sales strategy to target different segments of its customers. Not all the customer segments can be targeted in the same manner. It follows unique targeting strategy and that is what keeps it at part from the other companies. Commonwealth Bank also succeeds in its faster delivery of products and services to its customers. That is, in its sales department, most of the products and services offered by the organization are tangible and can be customized as per the need and demand of the customers (Bailey, Albassami and Al-Meshal 2016). The transactional activities are smooth without many restraints. Commonwealth Bank is best known for its on-time delivery of services. Technology plays a major part into this section. The organization has used technology to its brim to bring about special features like app based banking. Use of modern technology has also lifted thee organization a little more than the others. The customers are benefitted with app based mobile banking and bill payments. Some of the technology infused transactional features are ACH networks, ATMs, bankcard networks and check clearance systems. Value chain of Commonwealth bank Australia MARKETING SALES PRODUCT TRANSACTION Advertising Branding Supporting sales Multichannel Management Expanding market Offering of the products Expanding the product range Clearance of payments to the customers Settling financial services Technological advancement Human resource departments Maintenance of infrastructure Guidelines related to risk management Conclusion It can thus be concluded that commonwealth bank is a gigantic organization. Since its birth, it has gone through a lot of modifications and alterations in its organizational structure and infrastructure. Yet, it has been able to maintain its fame and reputation till date. Even after its controversies and allegations, it is one of the most popular bank in Australia. Given its number of employees, its branches all over the globe, its number of ATMs it is the most demanded financial service provider. The organization has been able to manage its constant inflation since the very starting of its journey (Eva et al. 2018). Entering into the market with a blue ocean strategy, it is only when the other financial sectors started providing the same services and products to the customers that Commonwealth Bank ultimately landed into red ocean. Though most of its services are liked and demanded by its loyal customers, yet it has been noticed that there are rare few that is hampering the growth o f the organization. Recommendation It has been seen that Commonwealth Bank hooks upon ACH network. It becomes less efficient in peak financial years and in order to increase its efficiency, the organization must extend the transponder capacity of the same. 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