Commonwealth Bank is a multinational bank in Australia which has its businesses in many other countries such as the Asia, Europe, United Kingdom, New Zealand and the United States. The bank provides financial services such as funds management, broking services, retail, insurance, investments, business accounts, business loans, asset finance, superannuation and other services. It is one of the largest banking services in Australia and is listed on the Australian Securities Exchanges as one of the largest companies. The Commonwealth Bank was founded by the Australian Government by the year 1911 and the bank was further privatised in the year 1996. It is one of the banks of the bug four along with Westpac, National Australia Bank and ANZ (Commbank.com.au, 2018). In the year 1991, the bank became a part of the Australian Stock Exchange. The current headquarter of the Commonwealth Bank is in Darling Harbour, Sydney, Australia. The Commonwealth Bank Act was the beginning of the Commonwealth Bank in the year 1911 which was started by the government of Andrew Fisher Labour. This was established for the nationalisation of banks and the act was brought into effect on the 22ndDecember, 1911.In current scenario the bank offers many benefits and features to their customers such as managing risks, online banking and news updates. The report will contain a detailed analysis of the macro-environment of the commonwealth bank with the help of PESTEL analysis tool. The analysis will be done to understand about the key factors and the opportunities and threats that are faced by the bank and the impact that it has on the growth of the bank in the future. The report also conducts an industry analysis with the Porter’s five forces model and an internal analysis containing the key resources and capabilities of the bank followed by the findings that has been derived through the analysis.
The macro-environmental analysis of the bank is done with the help of PESTEL analysis which consists of six factors namely political, economic, social, technological, environmental and legal factors.
Conclusion
From the above macro-environmental analysis it can be seen in current times Commonwealth Bank have evolved to be one of the largest financial service providers in Australia and other countries. There is a lot of scope that is being provided by the bank in terms of their services to their customers and to the community. The bank have always remained upgraded with the new technology and invested in several innovations which would make their operations and the work of their customers easier. Even though there are certain controversies that are faced by the bank, overcoming the issues and the legal problems would help the bank to grow in the long run.
The Porter’s five forces model is used to determine the analysis of the industry where the company is operating. The factors of the five forces model are competitive rivalry, bargaining power of customers, bargaining power of suppliers, threat of new entrants and threat of substitutes.
Conclusion
Hence, it can be seen from the above industry analysis that the competitive rivalry is quite intense among the big four banks which makes it a continuous struggle for Commonwealth Bank to maintain their position and foothold in the Australian market. The bargaining power of the customers is quite high along with the bargaining power of the suppliers. The threat of new entrants in the Australian banking market is quite moderate as is the threat of suppliers, both of which can be avoided by the Commonwealth Bank by maintaining efficiency in their products and services.
Key resources and capabilities are used to determine the factors which create value in an organisation. The resources and capabilities are the different means through which the company achieves a competitive edge (Mention & Bontis, 2013). The resources of Commonwealth Bank are finance, technology, location and brand image. Finance is the most important resource of the Commonwealth bank in developing their competitive edge and growth of the Commonwealth Bank. The revenue of the bank should be able to exceed the revenue generated by their competitors, only then would the Commonwealth Bank be able to gain superiority over the other banks. Kiragu (2014) states that technology is also an important resource which is needed by the bank since most of their services would depend on technology in current times. Technology makes the work easier and increases the capability of the bank in dealing with the information and operations. The bank has to keep them updated regarding new technology and also maintain their focus on their human resources which is needed for their daily functions (Demirkan & Delen, 2013). The location of Commonwealth Bank is at a place where the demographics and psychographic targeting would be fulfilled by the bank. The brand image of the bank is favourable in increasing the revenue of the Commonwealth Bank. It is important to maintain the brand image of the bank so that they are able to gain competitive advantage over the other banks.
The capabilities of Commonwealth Bank are product development, financial management, online banking and strategic management. Product development is the way that the bank continuously develops its financial products and services. The bank continually finds new ways through which they can make the work easier for both the bank and the customers (Wu, Ramesh & Howlett, 2015). This way customer would be able to make the desired functions in a much faster and efficient way due to the continuous changes that has been brought about in the products. Financial management is another capability of the bank which is present in the bank and helps them to retain the experienced and knowledgeable staff that would help in their operations (Koryak, Mole, Lockett, Hayton, Ucbasaran & Hodgkinson, 2015). Online banking is a major capability of Commonwealth Bank. In the times where online services and technology has seen a huge rise, developing online banking facilities have helped the bank to instil trust within their customers and retain them (Beattie & Smith, 2013). Strategic management is a very important capability that is managed by the bank with great detail. The bank adheres to their mission and develops strategies which would be able to help in the achievement of their mission. These key resources and capabilities help the bank to stay on their track and work for the fulfilment of their organisation mission and vision to be successful.
From the different analysis that has been conducted on the Commonwealth Bank, many things were derived which would help in the strategic formation of the bank. The PESTEL analysis derived the different external environmental factors which would help in the operations of the business. The analysis showed way for much scope where the business could improve upon to grow more in the long run. This external analysis was important to overcome the different issues that have been faced by the bank and to gain knowledge of the opportunities and threats that surrounds the bank. An industry analysis was also conducted regarding the bank which helped to understand the situation of the market and the competitors of the bank. This would help the bank to form the correct strategies and understand the market and the needs of the customers, both of which is required for the success of the bank. Moreover the changing trends of the market should be determined by the bank so that they have an upper hand over their competitors to survive in the market. The key resources and capabilities are the strengths that are possessed by the Commonwealth Bank and would help them in their future operations.
Conclusion
Hence, it can be concluded that the Commonwealth Bank is huge banking industry with several financial products and services which are designed after extensive market research and with alignment with the market changes so that they can satisfy the needs of the customers. The wide range of products and services help them to retain the huge customer base and gain new ones from their competitors. They also focus on the changes in technology and the market and try to incorporate them in their operations to make the experience of their customers more convenient and smooth with increased efficiency in operations.
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