Discuss about the Recent Developments and Future Research.
The most crucial elements of organizational life are disruption and business model. Business model acts as the structure for a business that includes sundry aspects for an organization. All these aspects consists key capabilities and resources which plays crucial role in terms of overall environment of a business enterprise. The main aim of an organization is to gain competitive advantage and attaining sustainable growth and development. In relation with this, it is necessary to adopt an effective and sustainable business model. Environment of business and its resources are crucial elements for an organizational success and it also plays crucial role in terms of reaching to the desired destination (Paetz, 2014).
With regards to the determination of significance of business model, this report will focus over the two crucial aspects of Commonwealth Bank Australia (Commonwealth Bank, 2018). These two crucial aspects are disruption and business model. Apart from this, this report will also focus over the innovation at Commonwealth Bank under which some smart-connected products will be discussed. With regards to this, opportunities and threats linked with the smart-connected products and the business model canvas of Commonwealth Bank will be discussed along with the capabilities, resources and value propositions (Porter & Heppelmann, 2014).
Business model describes the structure of business and this term is being used in the business formats since last few years. Business model describes the structure of a business enterprise but in order to compete with the other companies in the dynamic and competitive business environment, most of the organizations seem to alter, modify or adopt innovation in their business model. Main aim behind this is to gain competitive advantage. Business model framework includes all crucial components of a business which plays crucial role in terms of enhancing the efficiency and competency of a business enterprise. In relation to this, business model canvas is the essential element and significant concept of strategic management which all are necessary to develop effective business models (Porter & Heppelmann, 2015).
It acts as a visual structure which includes customers, resources, value propositions of products of company, finance and other components. Dealing with external business environmental challenges becomes quite easy task for companies with the help of business model canvas as it leads to develop an effective business model. This has also been considered as the vital element for raising funds for the organization as well as to enhance the productivity. Along with this, this also acts as the mediator between strategy and the processes of an organization and reduces the gaps amongst to make organizational practices effective and efficient. This process is also effective in terms of managing the organizational functionalities so as to provide adequate benefits to the consumers. This also includes various types of resources and key findings which help the company to tackle the situation in the appropriate manner and it also plays crucial role in approaching the target audience (Christensen, Raynor & McDonald, 2015).
Implementation of disruption has been a common practice nowadays as it plays crucial role in performing effective functions in the competitive industry. Disruptive innovation is a term which indicates the field of business administration. It refers to an innovation which creates new markets or modifies existing products of the organization to acquire an effective position in the existing market. Thus, disruptive innovation takes place in order to develop new markets and for enhancing customer base. Innovators are considered as crucial part of an organization and it has also been considered that all disruptors are innovators but all innovators cannot be disruptors. Disruptive technique enhances entrepreneur’s thinking in order to perform organizational functionalities in an effective manner. This enhances the success and growth of the organization and in terms of increasing productivity, disruptive innovation leads to generate various new methods. Value dimensions are also developed with the help of disruptive technique. Dimensions which are created with the help of disruption are lower prices, accessibility, simplicity, convenience to customers, etc. In relevance to this, organization could improve its brand value, productivity, and reliability amongst the target audience which are necessary elements to gain competitive advantage in the target market. Disruptive technology has allowed the companies to practice smart-connected devices in relation with increasing the effectiveness of their operations. Smart connected devices are helpful for businesses as it acts as a medium of information exchange between the business organizations to its users. Some of the smart connected assets and products are sensors, software, etc. Using smart connected devices in the business operations are leading the companies to enhance its efficiency along with the development of an effective image in the market. Opportunities increases for the companies with the help of smart connected devices which is an essential tool to fulfil target demographics’ demand in an effective manner along with diversifying the product offering (Radziwill, 2015).
Disruptive technologies have assisted companies in order to perform the functionalities in an effective manner. Disruptive innovation leads to create smart connected devices which are essential to operate in an effective manner. In terms of Commonwealth bank, Australia which is a multi-national bank and offers various services to the customers as well as to the business enterprises. Financial services, retail services, investment, insurance, business banking, etc. are some of the primary services offered by bank. Along with Australia, Commonwealth Bank is also situated in various parts of the globe such as New Zealand, United Kingdom, and United States of America. In terms of banking sector, it has been reviewed that banking sector plays crucial role as smart-connected devices helps the banks to enhance the customer experience in relation with the consumption of banking services. In relation with the continuous increase in the customer base, management of Commonwealth Bank has adopted usage of smart-connected devices in their procedure. Apart from the smart-connected devices, being an experienced member of the banking sector, Commonwealth Bank has also invented various new and unique methods in terms of enhancing the productivity as well as for smoothening in the operations of the organization. Some of those inventions include Block-chain, big data, smart machines, Internet of Things, etc. (Schlagwein, Thorogood & Willcocks, 2014).
Along with these products and services, Commonwealth Bank offers a unique debit card to its clients that help them to transact and shop from anywhere anytime. Every debit card of Commonwealth bank consist a unique identity code which separates the debit card from each other. Apart from this, this debit card is also useful for various other purposes such as it can be used at any ATM machine without giving extra charges, etc. The debit card issued by Commonwealth Bank with unique identity code comes under the smart-connected devices invented under disruptive innovation method. This leads to numerous opportunities as well as threats for the organization which ultimately affects bank’s operations. On one side, products and services invented under smart-connected devices helps the organization to generate various opportunities in terms of sustaining in the competitive business environment whereas on the other hand, it also leads certain threats such as leakage of client’s information, miss-utilisation of smart-connected devices, etc. Smart-connected devices have taken an important place in the bank’s operations which acts as the major factor for enhancing organizational performance. In relation with these smart-devices and technologies, one of the major innovations by Commonwealth Bank is innovation of smart-machine. This machine is useful for delivering various banking services to its customers such as depositing cash, taking out mini-statement, transferring cash, etc. Generally, customers’ needs to visit bank for these types of services but after such innovation of smart-machine, it offer effective financial services to its clients. Apart from this, this machine is useful for opening instant bank account without paperwork. This machine is fitted with sensor technology through which bank could easily locate and detect machine and operations of the machine. This helps to reduce the chances of fraudulent activities and enhance the value of destructive innovation and smart-connected devices (Christensen, 2006).
Thus, it could be considered that the unique services offered by the bank generates various opportunities which is a positive indicator for the growth and success of bank along with gaining competitive advantage in the target market. Generally, opportunities bring challenges along with it and same feature is linked with the usage of smart-connected devices. Smart-connected devices help Commonwealth Bank to enhance its performance whereas it also leads to various challenges. This affects organizational performance and in order to avoid these challenges or to develop effective strategies in terms of uplifting organizational performance. On one side, Commonwealth Bank is moving towards automation and with this regard; organization has adopted various technologies and smart-connected devices. On the other hand, old age customers of banks are not able to understand the usability of these technologies. Hence, organizational performance is getting affected. With regards to this, organization is required to adopt appropriate training and awareness programs for its existing customers in order to make them realise the usability of smart-connected devices as well as of the technologies adopted by the bank for smoothening the operations. This strategy will also act as the customer retention strategy through which the desired goals and objectives could easily be attained. Apart from these issues, Commonwealth Bank also suffers from stolen of ATM machines; still there are several customers who are not able to operate through automated technologies, etc. These types of activities act as threats for organization which ultimately affects organizational performance, growth as well as success (Stefan & Richard, 2014).
Business model canvas for Commonwealth bank is as follows:
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Key Partners
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Key Activities
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Value Proposition
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Customer Relationships
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Customer Segments
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Key Resources
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Channels
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Cost Structure
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Revenue Streams
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Above business model canvas shows the key resources and capabilities of Commonwealth Bank. Amongst those resources and capabilities, crucial factor is value proposition which is effective for meeting with various challenges faces by the organization. Apart from this, it also acts as the defensive strategy which is implemented to secure the acquired position in the competitive business environment. Value proposition also helps the bank to develop positive perception amongst the customers which is essential to retain old customers as well as to attract new customers. Being the largest bank of the Australia, major responsibility of bank is to secure the interest of its clients along with providing them most effective and adequate services. With regards to these services, organization could easily enhance its performance along with reaching on the peak position in the international banking industry (Chesbrough, 2010).
Thus, it could be concluded that the business canvas model adopted by Commonwealth Bank is effective enough to enhance the goodwill along with attainment of future growth objectives. With the above analysis, it has been recognised that Commonwealth Bank is required to adopt certain other strategies and resources with the objective of meeting with future customers’ needs.
References
Chesbrough, H. (2010). Business model innovation: opportunities and barriers. Long range planning, 43(2-3), 354-363.
Christensen, C. M. (2006). The ongoing process of building a theory of disruption. Journal of Product innovation management, 23(1), 39-55.
Christensen, C. M., Raynor, M. E., & McDonald, R. (2015). What is disruptive innovation. Harvard Business Review, 93(12), 44-53.
Cohn, A., Fehr, E., & Maréchal, M. A. (2014). Business culture and dishonesty in the banking industry. Nature, 516(7529), 86.
Commonwealth Bank. (2018). CommBank: Personal banking including accounts, credit cards. Retrieved from https://www.commbank.com.au/.
Paetz, P. (2014). Disruption by Design: How to Create Products that Disrupt and then Dominate Markets. NY: Apress.
Porter, M. E., & Heppelmann, J. E. (2014). How smart, connected products are transforming competition. Harvard Business Review, 92(11), 64-88.
Porter, M. E., & Heppelmann, J. E. (2015). How smart, connected products are transforming companies. Harvard Business Review, 93(10), 96-114.
Radziwill, N. (2015). Value Proposition Design. The Quality Management Journal, 22(1), 61.
Schlagwein, D., Thorogood, A., & Willcocks, L. P. (2014). How Commonwealth Bank of Australia Gained Benefits Using a Standards-Based, Multi-Provider Cloud Model. MIS Quarterly Executive, 13(4).
Stefan, S. & Richard, B. (2014). Analysis of Business Models. Journal of Competitiveness, 6 (4), 19-40.
Zott, C., Amit, R., & Massa, L. (2011). The business model: recent developments and future research. Journal of management, 37(4), 1019-1042.
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