Issues Faced By Commonwealth Bank: Mitigation Strategies And Recommended Actions

External Risks

Commonwealth Bank of Australia is an Australian multinational organization, which has businesses across New Zealand, Asia, the US and the major parts of the UK. The organization is headquartered in Darling Harbour, Sydney, Australia. The services that are offered by the organization is a variety of financial services to the retails, businesses and other profit and non- profit organizations for the expansion and growth of their respective ventures.

The continuous growth is reflected through the suitability of the processes as per the needs of the customers and the entrepreneurs. Revenue growth of the organization in the succeeding years has helped in identifying the progress that is made by the bank. The revenue by the end of the fiscal year 2017 was A$26.005 billion and the net income was A$9.881 billion which reflected a rapid growth of the business as per the concern of the same (Dumas et al. 2013). The rising number of employment created by the organization has helped in perceiving profitability of the business. Around 51,800 employees were working in the organization as per the annual report that was published by the organization by the end of the 2017 fiscal year.

However, the development that was made by the organization was defaulted by different issues that affected the goodwill of the business while operating in the international markets. The findings from the Royal Commission in 2018 reflected a negative culture within the framework of the organization, which has given rise to frauds, deception and money laundering. It has affected the goodwill of the organization largely (Dumas et al. 2013). On the other hand, the identification of the different external risks that are faced by the organization is based on the changes in the economic and the technological aspects in the market structures. The paper will be focusing on the challenges that are faced by the business and thereby recommend steps that will be facilitating the business to bring forth relevant changes in the operations.

Analysis of the external challenges

The different challenges that might be faced by the organization, Commonwealth Bank, Australia, is subjected to the changes in the environmental systems and the demand that is faced by the firm while operating in the international markets.

Political	Increasing level of corruption in the banking sector has affected the smooth performance of the organization as per the objectives of the same while operating in the different international market structures. Bureaucracy is induced in the banking industry by the governments through the enforcement of different acts and regulations, which affected the proper functioning of the organization (Doppelt, 2017).   Different trade regulations and tariffs that are imposed on the bank has affected the functioning of the same in the diverse regions and nations around the world. It has restricted the operations that are undertaken by the organization as per the ethics of the organization is concerned. The Pricing regulations that are inferred on the bank have affected the free pricing mechanism as per the organization structure. It has affected the functions through the restrictions as per the needs of the business (Kuei  & Lu,  2013)
Environmental	·        The different issues that are faced by the organization are related to the lack of proper waste management tools that affected the proper functioning of the systems of the business while operating in the international markets. It has also affected the “Green approach” as per the objectives of the business; however, which not implemented.
Social	·       Demographic structure of the nations and the education rate has helped in maintaining the suitable operations of the business while operating in the international markets (Zelnik et al. 2012). The economic structure and the employability of the people in the nation help in identifying the growth of the organizations in the diverse market structures.
Technological	·       The different technological developments that were undertaken by the competitors of the Commonwealth bank have affected the suitable performance of the same while operating in the different market structures. ·        The rate of technological diffusion in the different nations and the lack of p[roper technologies that are adhered by the organization has affected the proper functioning of the systems of the business.
Economic	The type of economic structure of the organizations helps in identifying the manner in which the aforesaid organization might plan the processes (Dumas et al. 2013).  However, the issue that is faced by the organization is related to the compatibility of the business to cope up with the different shifts. The flexibility of the organizational structure plays a vivid role in enabling the organization to adhere to the different situations as per the national income. ·       The stability of the host country’s economic structure helps in maint5aining the proper trading options for the organization. However, the organization is facing issues due to the instability of the economic conditions while operating in the nations that falls under the EU. It has affected the trade that is planned by the business (Wong, Tseng  & Tan,  2014).
Legal	·       The negative culture that is prevalent in the organization has affected the organizational objective of adhering to the Consumer protection and e-commerce acts and regulations (Awadh & Alyahya, 2013). The perceived fraudulent activities that were internally undertaken by the members of the bank have affected the proper functioning of the systems of the business.

The different mitigation strategies that might be undertaken by the organization after the identification of the issues are based on the utilization of the effects of the change in the systems of the business. This section of the report will be focusing on the identification of the recommended actions that might be undertaken by the Commonwealth bank as per the different relevant frameworks for improving the structures and the processes of the business.

	Competitive advantage
Competitive scope		Lower cost	Differentiation
Broad target	Cost leadership The different change in the organization will be facilitated by implementing economies of scale and proprietary technology. It will be helping the organization in maximizing the outputs as per the expansion objectives of the business. The economies of scale will be helping the organization in maximizing the productivity as per the fulfillment of the needs of the customers (Vukši?,   Bach  & Popovi?,  2013). On the other hand, the utilization of suitable technologies will be helping the business in maintaining a proficient functioning in the competitive market structure.	Differentiation The safety and the security of the transactions that are undertaken by the customers of the business will be helping the business to bring in changes in the present situation and thereby avoid fraudulent activities that might affect the interest of the customers (Quarshie, Salmi  & Leuschner,  2016).
Narrow target	Cost focus The differentiation in the banking charges and emphasizing on the quality of services that are provided by the Commonwealth bank will be helping the same in redeeming a good customer base (Wheelen et al. 2017). Minimization of the costs while undertaking the specific functions of the organization will be helping the firm in maintaining a congruous cost and output relation. It will be helping the business to improve the structure and the functioning of the business.	Differentiation focus Identification of the needs of the customers and entrepreneurs and thereby formulating different devices to adhere to the interests of the same will be helping the organization to bring in changes in the performance while operating in the international market structures.

The organization also faced issues relating to data theft, money laundering and fraudulent activities, which might be protected through application of security checks and implementation of the latest technologies in the systems. It will be helping the organization in adhering to the interest of the customers as per the specific needs of the same (Singh,  2012). On the other hand, the organization might undertake a market analysis, which will be enabling the business to identify the different pros and cons. It will be facilitating the organization with the formulation of different strategies that will be helping the business top bring in changes in the operations of the business (Gershengorn, Kocher  & Factor, 2014). The identification of the market size and the economic structure of the nations will be helping the organization in investing as per the competitive gains in the various market structures. In order to, reduce the risks of facing economic fluctuations the organization must take steps to conduct an extensive study of the different market conditions as per the demographic and psychographic relativity. It will be helping the organization in maintaining the different modifications in the processes of the business.

Political Environment

The organization might follow the Rational decision making model which will be enabling the organization to undertake efficient decision making considering the common objectives of the business. The model will be helping the organization in identifying the issues that are faced by the same while operating in the international market scenario (Schiuma,  2012). The definition of the issues and prioritization of the decisions as per the goals of the organization will be helping he organization in optimizing the standards of the operations. As per the case, Commonwealth Bank faced with an issue relating to the usage of outdated technology, which has affected the goodwill of the business.  Therefore, the organization will be identifying the issue as its first step and thereby might formulate strategies of implementing modernized machinery to bring forth changes in the present situation of the business. Allocation of the project needs as per the criteria and weights of the decision will be helping Commonwealth bank to identify the costs that will be required to assist the change in the systems of the business.  

The development of the alternative decisions that might be considered by the organization while undertaking the modification in the processes. The alternatives will be helping the organization in choosing from among the alternatives that is best suited as per the norms of the business. The modifications that are fostered by the organization has helped in maintaining the different modifications in the systems of the business (Goetsch  & Davis,  2014). The evaluation of the available alternatives will be helping the organization in balancing the processes that are planned by the business. The selection of the best alternative will be helping the organization in undertaking the suitable decisions as per the issues that are faced by the business. The selection of the best alternative will be helping the Commonwealth bank, Australia, will be helping the same in mitigating of the issues. The application of the model on the proceedings of the business will be fostering the same with continuous improvements in the situation of the business firm.

Conclusion

Therefore, the issues that are faced by the organization, Commonwealth Bank, while operating in the international market structures. The identification of the issues that are faced by the organization through the analysis of the external environments will be fostering the growth of the organization through the prioritization of change. On the other hand, the different recommended actions that might be undertaken by the organization to bring forth changes in the processes of the business are supported through the enumeration of porter’s generic tools. It will be helping the organization in mitigating the issues and thereby optimize the performance of the same.  

The decision making system that might be adhered by the organization is the rational decision making model. It will be providing the business with an opportunity to choose from among the different alternatives through the consideration of the change and the manner in which the change will be affecting the present situation of the business. The report enumerated the strategies that will be helpful for the organization in optimizing the situation of the business while operating in the international market structure. The modifications in the systems of the business will be facilitated through the formulation of different strategies that will be helping to improve the situation as per the ethics of the business are concerned.

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