Commonwealth Bank is considered to be the leading financial services provider in Australia. The different services which are provided to the customers mainly include, premium banking, retail banking, business based banking and institutional banking. The broking based services are also provided to the customers of Commonwealth Bank in an effective manner. The organization was established in the year 1911 under the Commonwealth Bank Act. The operations of the financial services were then commenced in the year 1912 (Commbank.com.au 2018). The company has been able to grow the business operations with the help of more than 15.9 billion customers all over the world. The organization has an employee base of more than 48,900 people and greater than 800,000 shareholders as well. The full financial services which are thereby delivered to the employees are built on the ways by which the organization has been able to enhance the financial position of the people of Australia The communities and the businesses of the entire world have also been affected by the financial services which are provided by Commonwealth Bank (Commbank.com.au 2018). The major competitors of Commonwealth Bank are ANZ Bank, Westpac, NAB. The company is the maturity stage of the product life cycle.
The report will thereby be built on the analysis of the resources that have been gained by the company in the industry. The resources will be studied with the help of VRIN structure. The Porter’s Five Forces Framework will be used for analysing the financial industry of Australia. The strategic objectives of the company will also be analysed in the report and their appropriateness will be decided. The recommendations will be provided based on the proper implementation of the generic growth based strategies in Commonwealth Bank.
The Commonwealth Bank of Australia had started its operations in the financial industry in the year 1912. The bank has been able to grow in the market with the help of effective financial resources and the efficient employees as well (Thompson, Strickland and Gamble 2007). The services that have been provided by the bank to its customers has been able to generate its exceptional position in the financial industry. The resources and capabilities of the company can thereby be analysed with the help of VRIN framework (Barros, Hernangómez and Martin-Cruz 2016).
Valuable – The technologies which are used by Commonwealth Bank have proved to be highly valuable for its operations in the financial industry.
Rare – The levels of rarity of the modern technologies that are used by the bank are also quite high.
Imitable – The modern technologies are not easily imitable by the other banks which operate in the industry.
Non-substitutable – The competitors of Commonwealth Bank are able to function in the industry with the assistance of other technologies which can be a substitute of those implemented by Commonwealth Bank (Daspit et al. 2017).
Valuable – The human resources or employees form a valuable resource of the company which has been helpful in increasing its profitability.
Rare – The training based facilities that are provided to the employees by Commonwealth Bank is not quite possible for the other organizations.
Imitable – The efficient human resources can thereby be developed by the competitors of Commonwealth Bank to some extent.
Non-substitutable – The human resources of the company are however not totally non-substitutable in nature (Demir, Wennberg and McKelvie 2017).
Valuable – The marketing and promotional strategies which have been developed by the company have been valuable for its proper operations.
Rare – The efficient strategies in the company are quite rare although it can be developed by its competitors.
Imitable – The marketing strategies of the bank are easily imitable by the organization and play a major role in increasing competition.
Non-substitutable – The development of marketing strategies is easily possible by the competitors of Commonwealth Bank in the financial industry (Durand, Grant and Madsen 2017).
Valuable – The service that is provided by the Bank to its customers is highly valuable for its proper operations.
Rare – The levels of customer interaction that have been developed by the organization is quite rare (Steinbach et al. 2017).
Imitable – The imitation of effective customer services is not easily imitable by other financial organizations.
Non-substitutable – The effective services provided by Commonwealth Bank are also non-substitutable by its major competitors in the industry (Dyer et al. 2015).
The Porter’s five forces framework is a strategic management based tool which can be used for the purpose of analysing the industry and the levels of profitability as well. The managers of Commonwealth Bank of Australia thereby use this framework in order to understand the ways by which five competitive types of forces which are able to affect the profitability based levels (Thompson, Strickland and Gamble 2007). The strategies which are required for the development of the bank can also be developed with the help of Porter’s analysis in an effective manner. The competitive forces are thereby able to affect the long-term based profitability of the company in the financial industry (Dobbs 2014).
Threats based on the new entrants – The new entrants in the financial industry are capable of bringing innovation and lower pricing based strategies as well. The value propositions that are developed by new organizations are also different from that of Commonwealth Bank. The organization thereby needs to develop effective types of barriers in order to safeguard the competitive advantage that has been developed in the industry. The innovation new services and products by Commonwealth Bank will play a major role in the ways by which it can remain competitive in nature (Engert, Rauter and Baumgartner 2016). The strength of this force is moderate and it is able to affect the ways by which the company can operate. The financial industry is highly dynamic in nature and the Commonwealth Bank has been able to develop its exceptional place in the industry. The new companies are thereby not able to gain high amounts of profits with the help of their operations. The position that has been developed by Commonwealth Bank in the financial industry cannot be affected by the new players easily (Ethiraj, Gambardella and Helfat 2018).
Bargaining power of the suppliers – The suppliers of the organization are able to affect the ways by which companies are able to decide the prices of products and services which are presented to the consumers. The profits which have been earned by Commonwealth Bank in the financial industry are thereby affected by suppliers who are in a dominant position. The negotiating power of the companies are thereby affected in a huge manner by the ways by which the suppliers are able to provide the raw materials that are required (Frynas and Mellahi 2015). The high bargaining based power of the suppliers are thereby able to impact the ways by which Commonwealth Bank is able to operate. Commonwealth Bank has however been able to develop a dedicated group of suppliers for its operations. This has been able to reduce the effect of this power on the ways by which the organization is able to operate in the financial industry (Hill, Jones and Schilling 2014).
Bargaining power of the buyers – The consumers in the modern business environment are able to affect the processes which are used by the companies offer the services and products. Commonwealth Bank is also affected by the power of the buyers or the customers. The profitability of the organization in the long run is thereby affected by the ways by which customers are able to bargain. A large base of customers can thereby be developed by the company in order to function in a profitable way in the financial industry (Hitt and Duane Ireland 2017). The rapid innovation of services and products is also an important part of the ways by which Commonwealth Bank can maintain its position in the industry. The established services and products which are offered by Commonwealth Bank have been able to limit the power of bargaining of the buyers or customers. This has been able to play an important role in the ways by which Commonwealth Bank has been capable to maintain its competitive advantage (Hubbard, Rice and Galvin 2014).
Threats from the substitute products – The threats that have been provided by the services and products offered by other companies in the financial industry have also been able to provide a threat to the operations of Commonwealth Bank of Australia. The operations of the company have thereby become service oriented to the product oriented types. Commonwealth is thereby affected by the substitute products which are offered by other financial companies in the industry (Karadag 2015).
Rivalry among existing players – The levels of rivalry in the financial industry are quite high. The prices of services and products are thereby affected by the levels of rivalry in the industry. The competitive levels of the industry are quite high and is able to take a huge toll on the profitability of Commonwealth Bank. The development of sustainable differentiation is thereby an important part of the ways by which Commonwealth Bank can operate in the industry in an effective manner. The rivalry based force of the Porter’s Five Forces is quite strong and is able to affect the profitability based levels of Commonwealth Bank in the financial industry (Kasemsap 2014).
The analysis of competitive forces that are a part of the financial industry has been able to depict that the company has been able to operate in a profitable manner. The profitability of the organizations is thereby affected in by the different forces in moderate to high levels (Steinbach et al. 2017).
Commonwealth Bank of Australia has been able to develop various strategic objectives in order to operate in the financial industry in an appropriate manner (Thompson, Strickland and Gamble 2007). The different strategies are as follows,
Customer focus – The customers have been able to become the most important part of its focus. As has been depicted in the analysis of the company, the customers stay at the heart of operations of Commonwealth Bank. The major aim of the company is thereby to secure an effective financial position in the industry. Commonwealth Bank has focussed on the ways by which customer experience can be developed in an effective manner (Simon, Fischbach and Schoder 2014). Appropriateness – This objective is totally aligned with the vision that has been created by Commonwealth Bank based on best levels of services that are to be provided to the customers. The competitive external environment will thereby be affected by the ways by which the company is able to develop its customer base (Meyer, Neck and Meeks 2017).
People – The people or employees of Commonwealth Bank are also an important part of the operations of the company. The organization has thereby invested in an effective manner on the ways by which they are committed towards the diversity and safety of the employees. Appropriateness – The development of employees will play a significant role in the services that are provided to the customers. The competition in external environment will thereby be faced in an effective manner with the help of efficient employees (Michael, Storey and Thomas 2017).
Technology – Commonwealth Bank has implemented world-class levels of technology for the purpose of meeting the needs of customers in an effective manner. The company has been developing various applications that have provided the customers with a way of maintaining interacting with the organization. Appropriateness – The analytical capabilities of Commonwealth Bank are used for providing higher levels of stability to the customers in an effective manner. The better technologies are able to provide a major competitive advantage to the organization in comparison to other organizations (Morschett, Schramm-Klein and Zentes 2015).
Productivity – The levels of productivity of Commonwealth has been another major strategic objective of the organization. The organization thereby aims at providing better outcomes for the customers and the people as well. The productivity of Commonwealth Bank has increased with the help of its employees and customers. Appropriateness – This has been able to deliver huge opportunities to the organization in order to increase the long-term success in an operative manner. The increase in levels of productivity will play a major role in the growth of the profitability of Commonwealth Bank in the financial industry of Australia (Sakas, Vlachos and Nasiopoulos 2014).
The four strategic objectives that have been developed by the company are the most appropriate for the operations of Commonwealth Bank of Australia in the financial industry. The company is thereby able to provide best levels of services to the customers with the help of these objectives.
The generic strategies that have been proposed by Porter are built on the growth based strategies of the Commonwealth Bank. These strategies are also helpful for the proper operations of the company in the financial industry. The strategy which can be used in an effective manner for growth of Commonwealth Bank are as follows,
The generic strategy which can be implemented by the bank is based on the best cost providing based activities that can be effectively performed by the organization. Commonwealth Bank has been able to develop a position in the financial industry which is quite different from the other major banks that operate in Australia. The company thereby needs to provide its services to customers at the lowest prices. This will help the organization to retain its position in the industry in an effective manner (Thompson, Strickland and Gamble 2007). The organization will thereby be able to function in the financial industry in an effective manner with the help of its prices based on which the services are provided to the customers. This generic strategy will be appropriate for the bank in order to mitigate the risks that are experienced with respect to its competitors in the industry. The most important part of the operations will thereby be based on the ways by which Commonwealth Bank is able to maintain its profitable position in the financial industry in an operative manner. The best cost based strategy of Commonwealth Bank will play a major part in the ways by which the firm is able to increase its customer base with the assistance of low interest rates. The levels of competition in the industry is high and providing lower costs as compared to the other organizations will be helpful for the company to increase the profitability levels effectively. The growth of the revenues of Commonwealth Bank will thereby be based on the ways by which the organization is able to serve the customers. The most important and easiest way for the company to attract the customers is based on providing the services at lower costs (Thompson, Strickland and Gamble 2007). The growth strategy which has been suggested by Porter will thereby play a major role in its successful operations in the financial industry.
Staffing
The strategy which has been chosen for implementation in Commonwealth Bank is cost based differentiation. The organization thereby needs to be develop a team of employees who are capable of providing the required services to the customers with the help of the appropriate resources. The most important resource which has thereby been considered is the world class technology that is already being implemented by the bank in order to serve the customers in an effective manner. The employees thereby need to be provided appropriate training which can play the main role in the operations of the organization. The technology based services can be provided to the customers in an effective manner only with the proper assistance of the employees who are an important part of the operations. The technological capabilities of the bank can act as an important differentiation based factor as compared to the other organizations (Trigeorgis and Reuer 2017).
This will be helpful for the organization to create its competitive advantage in the highly competitive financial industry. The employees form an important part of the process of strategy implementation of the company. Training for the staff thereby plays an important part in the operations of the organization in an effective manner. The Commonwealth has been investing huge amounts in the training based activities for the employees. The bank is thereby considered to be the leading provider of financial services in Australia. The services have been provided in an active manner with the help of the competent group of employees in the company. The technologies which have been used by the organization have thereby played a significant part in the success of Commonwealth Bank in the financial industry (Thompson, Strickland and Gamble 2007). (Refer to appendix 2)
Leadership
The Commonwealth Group has been committed towards attracting a diverse group of people in different leadership based positions of the organization. The organization has thereby been able to value the experiences, thoughts and perspectives of the leaders. The main aim of the management has thereby been to attract talented and passionate people in different organizational positions. The people who are in a leadership position in the company have been able to contribute in an effective manner to the betterment of Commonwealth Bank in an effective manner. Diversity has been an important part of the leadership based activities that have been performed by Commonwealth Bank in the course of its processes in the financial industry. The management of the company has also implemented gender diversity in the leadership based positions (Wheelen et al. 2017). (Refer to Appendix 1)
The major focus is thereby increase the representation of women in different job roles. The steps that are being taken by the organization in order to achieve these objectives include, increasing the levels of education and awareness among the employees. The development of higher levels of transparency is also an important factor that is a part of the operations of Commonwealth Bank. The inclusion of female talent in the operations of the company has thereby been able to play a major role in the ways by which the group is able to function in the industry in a diverse way. The management had introduced an award named the Catalyst Award for the purpose of encouraging the recruitment and training that is provided to female employees (Thompson, Strickland and Gamble 2007).
Conclusions
Commonwealth Bank has thereby been able to develop its effective position in the industry with the help of proper training and development based operations of the staff and further increasing the levels of diversity as well. The organization can thereby be recommended to increase the usage of modern technologies in order to increase the reach of its products in an effective manner. The company will be able to maintain its competitive advantage with the help of a large customer base and efficient employees. The training provided to employees is therefore a major part of its operations which needs to be enhanced as well.
The report can thereby be concluded by stating that the operations of Commonwealth Bank can be made more profitable with the help of proper usage of the technologies which are available for them. The organization has been able to develop a competitive place in the industry which can be maintained with the help of proper implementation of the modern technologies.
References
Barros, I., Hernangómez, J. and Martin-Cruz, N., 2016. A theoretical model of strategic management of family firms. A dynamic capabilities approach. Journal of Family Business Strategy, 7(3), pp.149-159.
Commbank.com.au. 2018. History – CommBank. [online] Available at: https://www.commbank.com.au/about-us/our-company/history.html [Accessed 21 Aug. 2018].
Daspit, J.J., Chrisman, J.J., Sharma, P., Pearson, A.W. and Long, R.G., 2017. A strategic management perspective of the family firm: Past trends, new insights, and future directions. Journal of Managerial Issues, 29(1), p.6.
Demir, R., Wennberg, K. and McKelvie, A., 2017. The strategic management of high-growth firms: a review and theoretical conceptualization. Long Range Planning, 50(4), pp.431-456.
Dobbs, ME 2014, ‘Guidelines for applying Porter’s five forces framework: a set of industry analysis templates’, Competitiveness Review, vol. 24, no. 1, pp. 32–45.
Durand, R., Grant, R.M. and Madsen, T.L., 2017. The expanding domain of strategic management research and the quest for integration. Strategic Management Journal, 38(1), pp.4-16.
Dyer, J.H., Godfrey, P., Jensen, R. and Bryce, D., 2015. Strategic Management: Concepts and Cases. Wiley Global Education.
Engert, S., Rauter, R. and Baumgartner, R.J., 2016. Exploring the integration of corporate sustainability into strategic management: a literature review. Journal of cleaner production, 112, pp.2833-2850.
Ethiraj, S.K., Gambardella, A. and Helfat, C.E., 2018. Theory in strategic management. Strategic Management Journal, 39(6), pp.1529-1529.
Frynas, J.G. and Mellahi, K., 2015. Global strategic management. Oxford University Press, USA.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.
Hitt, M. and Duane Ireland, R., 2017. The intersection of entrepreneurship and strategic management research. The Blackwell handbook of entrepreneurship, pp.45-63.
Hubbard, G., Rice, J. and Galvin, P., 2014. Strategic management. Pearson Australia.
Karadag, H., 2015. Financial management challenges in small and medium-sized enterprises: A strategic management approach. Emerging Markets Journal, 5(1), p.26.
Kasemsap, K., 2014. Strategic innovation management: An integrative framework and causal model of knowledge management, strategic orientation, organizational innovation, and organizational performance. In Strategic approaches for human capital management and development in a turbulent economy (pp. 102-116). IGI Global.
Meyer, G.D., Neck, H.M. and Meeks, M.D., 2017. The entrepreneurship?strategic management interface. Strategic entrepreneurship: Creating a new mindset, pp.17-44.
Michael, S., Storey, D. and Thomas, H., 2017. Discovery and coordination in strategic management and entrepreneurship. Strategic entrepreneurship: Creating a new mindset, pp.45-65.
Morschett, D., Schramm-Klein, H. and Zentes, J., 2015. Strategic international management (pp. 978-3658078836). Springer.
Sakas, D., Vlachos, D. and Nasiopoulos, D., 2014. Modelling strategic management for the development of competitive advantage, based on technology. Journal of Systems and Information Technology, 16(3), pp.187-209.
Simon, D., Fischbach, K. and Schoder, D., 2014. Enterprise architecture management and its role in corporate strategic management. Information Systems and e-Business Management, 12(1), pp.5-42.
Steinbach, A.L., Holcomb, T.R., Holmes, R.M., Devers, C.E. and Cannella, A.A., 2017. Top management team incentive heterogeneity, strategic investment behavior, and performance: A contingency theory of incentive alignment. Strategic Management Journal, 38(8), pp.1701-1720.
Thompson, A.A., Strickland, A.J. and Gamble, J.E., 2007. Crafting and executing strategy. The quest for competitive advantage. Concepts and cases. 15th edition, New York, NY.
Trigeorgis, L. and Reuer, J.J., 2017. Real options theory in strategic management. Strategic Management Journal, 38(1), pp.42-63.
Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic management and business policy. pearson.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download