This report comprises of discussion related to several strategy development tools that play a significant role in the growth of the business enterprise. These tools help in building a blueprint of future organization perspectives and thus help in removing uncertainty in the business environment (Paksoy, Pehlivan and Kahraman, 2012). Moreover, it also helps the organization in achieving its mission, objectives and vision. For more understanding, a finance company is taken i.e. Common Bank of Australia, a multinational bank of Australia. This will be beneficial for the explicit understanding in relation with practice of these strategy development tools.
A PESTLE analysis is a tool or framework help the business organization in analysing the various macro-environmental factors that directly or indirectly influence the organizational performance (Srdjevic, Bajcetic and Srdjevic, 2012). This tool is widely used by the business enterprise when they want to open a new business or enter in to a foreign market with their existing market. However, long running and stable organization also conduct this analysis due to the market competiveness and dynamic business environment due to which the customer needs and preference is change continuously.
The PESTLE analysis of Common Bank of Australia will be like –
Analysis of all these factors helps Common Bank of Australia in continues growth and diversity. It will also help in market penetration and development.
A SWOT analysis is an organized list of the business greatest strengths, weakness, opportunities and threats. It helps the organization to identify its potential strengths and weakness as well as wider opportunities and threats (Gunn and Williams, 2007). It will help the business enterprise in strategic both planning and decision-making. Primarily, this method was developed for organization and industry but it is equally important in the work of community, education and also for personal growth. SWOT analysis of Common Bank of Australia will be –
Strengths · It is one of the leading Australia banks as per the MFI (Main Financial Institution) ranking (Anz, 2014). · The institution provides superior quality products and also have well established diversified credit portfolio. · The bank also has strong financial position in the market and capital ratios. |
Weakness · The bank highly depends on offshore borrowings. · The name of this bank is also listed in money laundering scandal. · It has limited geographical diversity. · Moreover, the operating expense of bank is also increasing. |
Opportunities · The bank has opportunities to expand their business portfolio in the Asian markets. · Indigenous Customer Assistance Line (ICAL) |
Threats · Higher capital requirements by APRA. · Crumbly business environment and slowdown in China. · Phasing out of the government guarantees the bank. |
M. Porter built five forces model in 1979. The main objective of this model is to acknowledge the key five competitive forces having a direct or indirect impact on the industry (Vilanova, Lozano and Arenas, 2009). This model helps in determining the structure of industry as well as the level of competition prevailing in that industry. This tool is very important in formulating firms’ strategy. Five-force model of Common Bank of Australia will be –
This tool helps in marketing planning model that helps a business in determining its product and market growth strategy. It was invented by Igor Ansoff in 1965 (Martinet, 2010). This tool is also widely used by the business enterprise due to its simplicity and easy to use functionality.
Conclusion
It can be concluded that strategy development tools are very important for the organization to gain competitive advantage in this dynamic environment and marketplace. These tools also help them to pull out various opportunities from the surrounded business environment so that an organisation can come up with new and innovative products.
Common Bank of Australia is leading in the banking sector, however, due to some scandal, their reputation in the marketplace goes down and this benefitted the other competitors. It is important that they need to use these strategy development tools in advance as well as effectively to make combat weapon that can easily push down these threats out of the business area.
References
Anz. (2014) Top 10 Banks In Australia [ONLINE] Available from: https://anz.businesschief.com/leadership/1364/Top-10-Banks-In-Australia [Accessed 16/12/2018].
Colic-Peisker, V. (2011) A New Era in Australian Multiculturalism? From Working-Class “Ethnics” To a “Multicultural Middle-Class”. International Migration Review, 45(3), 562-587.
Commbank. (2016) HOW ETFS MAY HELP DIVERSIFY YOUR PORTFOLIO AND SPREAD RISK [ONLINE] Available from: https://www.commbank.com.au/guidance/investing/how-etfs-can-help-you-diversify-your-portfolio-and-spread-risk-201605.html [Accessed 16/12/2018].
Eyers, J. and Shapiro, J. (2018) Commonwealth Bank hit with $1b capital charge after scathing APRA report [ONLINE] Available from: https://www.afr.com/business/banking-and-finance/commonwealth-bank-hit-with-1b-capital-charge-after-scathing-apra-report-20180430-h0zg14 [Accessed 16/12/2018].
Gunn, R. and Williams, W. (2007) Strategic tools: an empirical investigation into strategy in practice in the UK. Strategic Change, 16(5), pp.201-216.
Martinet, A.C. (2010) Strategic planning, strategic management, strategic foresight: The seminal work of H. Igor Ansoff. Technological Forecasting and Social Change, 77(9), pp.1485-1487.
Paksoy, T., Pehlivan, N.Y. and Kahraman, C. (2012) Organizational strategy development in distribution channel management using fuzzy AHP and hierarchical fuzzy TOPSIS. Expert Systems with Applications, 39(3), pp.2822-2841.
RBA. (2018) The Implementation of Monetary Policy: Domestic Market Operations [ONLINE] Available from: https://www.rba.gov.au/mkt-operations/resources/implementation-mp.html/ [Accessed 16/12/2018].
Srdjevic, Z., Bajcetic, R. and Srdjevic, B. (2012) Identifying the criteria set for multicriteria decision making based on SWOT/PESTLE analysis: a case study of reconstructing a water intake structure. Water resources management, 26(12), pp.3379-3393.
Vilanova, M., Lozano, J.M. and Arenas, D. (2009) Exploring the nature of the relationship between CSR and competitiveness. Journal of Business Ethics, 87(1), pp.57-69.
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