Innovation and Sustainable Business Development: Commonwealth Bank Australia

Running Head: BUSINESS MODEL 1
Innovation and Sustainable Business
Development: Commonwealth Bank
Australia

BUSINESS MODEL 2
Business Model of Commonwealth Bank
Business model of an organization is the most significant framework that describes the resources
of a company and its business environment are connected together to deliver a customer value
and to produce the significant profits and revenues. In today’s competitive environment,
organizations create a sustainable business model that provides them an optimal mode of
operations in their sector. The purpose of this essay is to provide the points of different authors
regarding the business model and disruption. Additionally, the paper discusses the opportunities
and threats which the Commonwealth Bank is confronting by the use of smart-connected
products. Furthermore, it includes the business model canvas of the chosen organization and
explains two of its aspects i.e. key resources and value proposition.
Business Model is a conceptual framework that translates company’s business strategy to
implementation. This statement was given by Osterwalder & Pigneur (2010). In this context,
they further stated that the primary area of business model supports to understand and share the
business idea of a firm. Secondly, it can enhance the observing, measuring and contrasting the
business idea of firm. Thirdly, it assists in enhancing the implementation of business model in
action (Osterwalder & Pigneur, 2010). The authors stated that organizations can respond faster to
the change in business environment with business model framework. It fulfills the gap between
business process and its strategy. According to Eckhardt (2013) the concept of business model
has huge value as a framework for strategists to generate and compare the theories about how a
business provides value to its customers. It is seen as an abstract which allows a description of
what the business is doing for its survival. The business model includes three components such
as value creation, value delivery and value capture (Eckhardt, 2013). The author describes the
business model as an internal view and assists company’s strategy by defining the value
proposition and process system of firm to develop and deliver the value to customers.
To enhance the efficiency of business model, various businesses are adopting disruptive
innovation. Disruption and innovation are similar in that they are both builders and makers.
Disruption is the technique that takes a left turn by changing and uprooting how people think,
operate the business and learn. In his book, Paetz (2014) outlined that disruption develops new
dimensions of the value which the old business model or product category is not able to address
by fulfilling the unfulfilled needs of customers. According to the author, these new dimensions

BUSINESS MODEL 3
are some benefits like accessibility, simplicity, convenience, lower prices, ease of use etc. This
nature of disruption brings more deepness and shows the endless nature of digital technologies
(Paetz, 2014). The organizations will disruption attack the existing markets not just from the
bottom, top and sides, but from all the three sides. Disruptive innovation and technology enables
the organization to gain more competitive advantage over its competitors. Thus, it can be stated
that technological disruption includes different elements like technology, process, tool, behavior
and business model which change the customers to develop new behavior and different needs
with new values (Applegate, 2007).
In today’s business environment, disruptive innovation has enabled the organizations to use the
smart-connected products in its business operations. Smart connected devices are the innovations
in technology that helps the company to grab more opportunities for production development,
capacity development and greater reliability from customers (Drucker, 2014). These products
change the nature of competition and industry structure, showing the organizations to new
competitive threats and opportunities. Smart-connected products are created with the processors,
software, sensors that assist the organization to manage information exchange in its system.
Commonwealth Bank of Australia is an international bank with its services across Asia, New
Zealand, United States and United Kingdom. It offers several financial services such as business
and institutional banking, retail services, fund management, insurance, superannuation, broking
and investment services (Commonwealth Bank, 2018). The company has adopted various smart-
connected products in its business operations. Currently, the team of Commonwealth Bank is
focused on different smart-connected products like cyber, big data, smart machines, identity,
Internet of Things, Ag-Tech, Block-chain, next generation compute and it also includes the
atomic computing and commonwealth bank debit MasterCard. However the MasterCard assists
the customers in online shopping and to access on mobile app but it has some security issues
(Rajasingham, 2008).
These technologies offer various opportunities to the company like it enables the bank to follow
fast with disruptive play and develop new market opportunities to stay competitive among its
competing brands. Smart machines assists the organization in controlling and operating the
business activities from anywhere in the world (Chesbrough, 2010). The machines with sensors
allow the bank to collect and manage the customer information among its all the branches. By