The report is based on the strategic management within an Australia and New Zealand Banking Group considering the related strategic dilemma. The report includes the effect on the emergence of the cryptocurrencies on ANZ group. It includes the details related to the background, analysis of external environment with the help of theories and the strategic decisions of the company. In the end, the report includes the details related to the risk that might occur due to the emergence of the digital currency in the market
This section of the report includes the background of the company and its major decisions which were taken by the company. ANZ group is the well-known banking group who came into existence 180 years ago with the headquarters in Melbourne, Australia (ANZ Group, 2018). The objective of the company is to offer the effective financial and banking services to the citizen of Australia and New Zealand. The company makes some strategic decisions which help them in operating the business in the dynamic environment for instance, ANZ decision to sell the 55% shares in Cambodian JV ANZ Royal Bank to J trust who is a well-known company in the Japanese market (Reuters, 2018).
The analysis related to the external environment factors that might influence the working of the company are discussed with the help of the IO model and the diamond model.
I/O model: – This model defines the analysis of the external forces that can influence the strategic actions of the company. This model is recognized as the industrial organizational model as it includes all the assumptions that are linked with the external environment (Kraaijenbrink, Spender and Groen, 2010).
Diamond model: – The diamond model is based on the porter model that is used to understand the competitive position of the nation in the global competition (Riasi, 2015).
Both of these models are used to analyze the external factors with the help of the PESTLE analysis and Porter’s five forces model.
According to the IO model, PESTLE analysis is one of the frameworks that are used for the external analysis. There are numerous factors that lead to the opportunity and threats for the company (Kotler, 2015).
Political factors
The political factors include the influence on the company due to fluctuations in the rules formed by the government. Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry guidance and politics also leads to the impact on the working of ANZ (Royal Commission, 2018). The changes in the policies of New Zealand and Australia lead to the impact on the operations of ANZ. Moreover, the government of Australia has accepted the use of the one of the well-known cryptocurrency that is bitcoin which affect the hard currency and banking system. The emergence and acceptance of cryptocurrencies are becoming a threat to the existence and use of the hard currency.
Economic factors
The IO model reflects the importance of the economic factors that influence operations. This has been found that the economy of both Australia and New Zealand reflects the positive sign for the company. The Australian economy is the mixed economy with the rise in GDP of the country as in the year 2017 it was AUD $1.69 trillion. In the same year, New Zealand registered the GDP of 186.4 billion. This reflects the rise in the purchasing power of the people of countries. Though, cryptocurrencies emergence has attracted the people for the investment and citizen also takes the undue advantage of their purchasing power (Srokosz and Kopciaski, 2015). Though, this will affect the supply of the hard money or currency in the particular market which is one of the negative impacts on the economy of the country.
Social factors
The social factors matter a lot for the company as it includes the preference and choices of the customers. ANZ Group offers attractive services which are preferred by most of the citizen in Australia and New Zealand. The customers mainly visit the ANZ group for the get the financial services or investment advice (Micu and Micu, 2016). Though, the most of the people believe in investing the amount in cryptocurrencies because this is the way through which they can earn high returns. The rise in the demand of cryptocurrencies has brought the heavy fluctuations in the prices (Rothaermel, 2015). This fluctuation provides the benefit of the amount due to which the people perform more transaction with bitcoin exchanges. Moreover, it is found that the charges of the banking services are high but the transfer of bitcoin include less transaction cost.
Technological factors
The technology is one of the major factors that influence the working. Almost all financial and banking service providers offer the services with the help of the smartphone. This will provide the convenience to the customers as they can access the services from any location. Though, the technology advancement has brought many ways through which attract the customers towards new technology (Chuang and Hu, 2015). The paper of Satoshi Nakamoto shows that the technology has brought the digital currency. The emergence of cryptocurrencies was possible with the help of the blockchain technology.
Legal factors
The legal factors are essential to be considered by the organizations that are operating the business in the competitive market. ANZ ensures that they are able to meet the responsibility related to the legal laws. The ANZ group perform their operations under the Australian and New Zealand banking act. Though, this is the fact that the group has the threat because of the approval of the Cryptocurrencies in the Australian and New Zealand market (Bajpai, 2018). This is the way through which the use of digital currency will increase.
Environmental factor
The environment factors include the analysis of the contribution of the company for the welfare of the community and society. The company ensures that they are offering most of the services through digital mode which helps them to decrease the usage of the paper which is done for the welfare of the society. This factor doesn’t influence the working of the company in Australia and New Zealand market.
The Porter’s five forces provide the analysis of the competitive environment of ANZ group in the market where the company operates its business operations. This analysis is included in the Diamond model (Dobbs, 2014).
Bargaining power of suppliers: – The suppliers of the banking group include the RBA (Reserve Bank of Australia) who work as the backbone of the company. This means that there is less bargaining power of the RBA (ANZ Group, 2018). Though, the ANZ group has some more suppliers which include customers and businessmen. These people invest their amount or make the deposit which helps the company in managing the supply of the money. This is also the fact that the rise in the use of the cryptocurrencies is making the people get attracted for the investment.
Bargaining power of customers: – The customers of ANZ group include a citizen of the country. This has been observed that most of the people rely on the banking and financial services due to which there are different types of banking facility providers are available in the market. Therefore, the company has the threats from the different banks such as AMP bank, Commonwealth Bank of Australia, Queensland bank and many others. Along with this, most of the people are getting attracted towards the cryptocurrency.
Threats of New Entrants: – There is less threat of the new entrants because new business doesn’t want to open their new business in the banking and financial services. Establishing the business in the market needs huge capital which is not easy to source for the new business. Though, the introduction of the cryptocurrency was a big threat for the ANZ group (Vlasov, 2017).
The threat of substitutes: – ANZ group found that there are many other banks are available due to which there is a high threat of substitutes. The banking and financial services are offered by the many other banks (Lee and Carter, 2011). Moreover, there are different types of cryptocurrency that are available in the market and these currencies are used by many companies which shows that the substitute of the products.
Rivalry among the Existing Competitors: – ANZ Company found the intense rivalry not only in the market of Australia but also in the market of New Zealand. The rise in the use of the cryptocurrencies has increased the rivalry among the existing competitors.
This sector of the report throws light on the strategic dilemma that is faced by the ANZ group due to the emergence of the digital currency in the market. The company has found that maximum people are getting attracted towards Cryptocurrencies. This reflects the future of the ANZ Group which is in trouble because this leads to the risk (Décourt, Chohan and Perugini, 2017). Businessmen and the normal customer found that digital currency is one of the easiest ways of conducting the business. Though, this is also the fact that the use of the digital currency will eliminate the role of banks and the hard currency from the market. Along with this, the reserve bank of the country will not be able to manage the flow of money in the market which directly or indirectly affects the economy of the country (Beck and Losse-Müller, 2010).
It is suggested to the company to bring the awareness for the financial and banking services in the market. Moreover, the people should be aware that cryptocurrencies don’t involve any intermediary due to which loss or fraud might take place in the market. The flow of money should be managed by the government in the market. Along with this, the prices of cryptocurrencies fluctuate a lot due to which the investors might face the loss in the investment done by them.
Conclusion
In the end, it can be concluded that there are different factors that influence the decisions of the company for the growth in the business. These factors are analyzed with the use of the PESTLE analysis and Porter’s five forces analysis. These frameworks are essential for the analysis of external factors. The emergence of the cryptocurrency affects the financial operations within the company. Moreover, there are different risks that are related to the cryptocurrency and their likely impact on the ANZ group which are discussed in the strategic analysis.
References
ANZ Group (2018) About ANZ [Online]. Available from: https://shareholder.anz.com/our-company/profile?_ga=2.44436707.690094383.1526027865-973082256.1526027865 [Accessed on 19th May 2018]
ANZ Group (2018) ANZ Shareholder Centre [Online]. Available from: https://shareholder.anz.com/our-company/profile/history?_ga=2.44436707.690094383.1526027865-973082256.1526027865 [Accessed on 19th May 2018]
Bajpai, P. (2018) Countries Where Bitcoin Is Legal & Illegal (DISH, OTSK) [Online]. Available from: https://www.investopedia.com/articles/forex/041515/countries-where-bitcoin-legal-illegal.asp [Accessed on 28th March 2018]
Beck, T. and Losse-Müller, T. (2010) Financial sector taxation: Balancing fairness, efficiency, and stability. VoxEU. org, 31.
Chuang, C.C. and Hu, F.L. (2015) Technology strategy-innovating for growth of ANZ Bank. International Review of Management and Business Research, 4(3), p.682.
Décourt, R.F., Chohan, U.W. and Perugini, M.L. (2017) BITCOIN RETURNS AND THE MONDAY EFFECT. Horizontes Empresariales, 16(2).
Dobbs, M. (2014) Guidelines for applying Porter’s five forces framework: a set of industry analysis templates. Competitiveness Review, 24(1), pp.32-45.
Kotler, P. (2015) Framework for marketing management. India: Pearson Education.
Kraaijenbrink, J., Spender, J.C., and Groen, A.J. (2010) The resource-based view: a review and assessment of its critiques. Journal of management, 36(1), pp.349-372.
Lee, K. and Carter, S. (2011) Global marketing management. Strategic Direction, 27(1).
Micu, I. and Micu, A. (2016) Financial Technology (Fintech) And Its Implementation On The Romanian Non-Banking Capital Market. SEA-Practical Application of Science, 11, pp.379-384.
Reuters (2018) ANZ to exit Cambodian venture with stake sale to Japan’s J Trust [Online]. Available from: https://in.reuters.com/article/us-anz-divestiture-cambodia/anz-to-exit-cambodian-venture-with-stake-sale-to-japans-j-trust-idINKCN1II175 [Accessed on 19th May 2018]
Riasi, A. (2015) Competitive advantages of shadow banking industry: An analysis using Porter diamond model. Business Management and Strategy, 6(2), pp.15-27.
Rothaermel, F.T. (2015) Strategic management. India: McGraw-Hill Education.
Royal Commission (2018) Public submissions [Online]. Available from: https://financialservices.royalcommission.gov.au/Public-submissions/Pages/default.aspx https://www.bitcoin.com/you-need-to-know [Accessed on 28th March 2018]
Srokosz, W. and Kopciaski, T. (2015) Legal and Economic Analysis of the Crypto Currencies Impact on The Financial System Stability. Journal of Teaching and Education, 4(2), pp.619-627.
Vlasov, A.V. (2017) The evolution of e-money. European Research Studies Journal, 20(1), pp.215-224.
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