Impact of Cryptocurrencies on ANZ Group: A Strategic Analysis

This report analyzes the impact of cryptocurrencies on ANZ Group and provides a strategic analysis of the company. It includes PESTLE analysis, Porter's five forces analysis, and recommendations for the company.

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Executive Summary
In the 21st century, the strategic management plays a vital role within an organization. The
strategic management provides the assistance to the company in the formulation and
implementation of the preceding targets and initiatives that are created by the top-level
management within an organization. The company on which the strategic environment, direction,
and decision are based in Australia and New Zealand Banking Group. The change in the external
environment affects the company due to which the company needs to prepare the strategic
decisions. The strategic environment analysis includes the impact of the cryptocurrencies on the
ANZ group.

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Contents
Introduction......................................................................................................................................3
Strategic Background analysis.........................................................................................................4
Analysis of Strategic environment...................................................................................................4
PESTLE Analysis........................................................................................................................5
Porter’s five forces.......................................................................................................................7
Strategic analysis of the company...................................................................................................8
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

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Introduction
The report is based on the strategic management within an Australia and New Zealand Banking
Group considering the related strategic dilemma. The report includes the effect on the emergence
of the cryptocurrencies on ANZ group. It includes the details related to the background, analysis
of external environment with the help of theories and the strategic decisions of the company. In
the end, the report includes the details related to the risk that might occur due to the emergence
of the digital currency in the market.

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Strategic Background analysis
This section of the report includes the background of the company and its major decisions which
were taken by the company. ANZ group is the well-known banking group who came into
existence 180 years ago with the headquarters in Melbourne, Australia (ANZ Group, 2018). The
objective of the company is to offer the effective financial and banking services to the citizen of
Australia and New Zealand. The company makes some strategic decisions which help them in
operating the business in the dynamic environment for instance, ANZ decision to sell the 55%
shares in Cambodian JV ANZ Royal Bank to J trust who is a well-known company in the
Japanese market (Reuters, 2018).
Analysis of Strategic environment
The analysis related to the external environment factors that might influence the working of the
company are discussed with the help of the IO model and the diamond model.
I/O model: - This model defines the analysis of the external forces that can influence the
strategic actions of the company. This model is recognized as the industrial organizational model
as it includes all the assumptions that are linked with the external environment (Kraaijenbrink,
Spender and Groen, 2010).
Diamond model: - The diamond model is based on the porter model that is used to understand
the competitive position of the nation in the global competition (Riasi, 2015).
Both of these models are used to analyze the external factors with the help of the PESTLE
analysis and Porter's five forces model.

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PESTLE Analysis
According to the IO model, PESTLE analysis is one of the frameworks that are used for the
external analysis. There are numerous factors that lead to the opportunity and threats for the
company (Kotler, 2015).
Political factors
The political factors include the influence on the company due to fluctuations in the rules formed
by the government. Royal Commission into Misconduct in the Banking, Superannuation and
Financial Services Industry guidance and politics also leads to the impact on the working of
ANZ (Royal Commission, 2018). The changes in the policies of New Zealand and Australia lead
to the impact on the operations of ANZ. Moreover, the government of Australia has accepted the
use of the one of the well-known cryptocurrency that is bitcoin which affect the hard currency
and banking system. The emergence and acceptance of cryptocurrencies are becoming a threat to
the existence and use of the hard currency.
Economic factors
The IO model reflects the importance of the economic factors that influence operations. This has
been found that the economy of both Australia and New Zealand reflects the positive sign for the
company. The Australian economy is the mixed economy with the rise in GDP of the country as
in the year 2017 it was AUD $1.69 trillion. In the same year, New Zealand registered the GDP of
186.4 billion. This reflects the rise in the purchasing power of the people of countries. Though,
cryptocurrencies emergence has attracted the people for the investment and citizen also takes the
undue advantage of their purchasing power (Srokosz and Kopciaski, 2015). Though, this will

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affect the supply of the hard money or currency in the particular market which is one of the
negative impacts on the economy of the country.
Social factors
The social factors matter a lot for the company as it includes the preference and choices of the
customers. ANZ Group offers attractive services which are preferred by most of the citizen in
Australia and New Zealand. The customers mainly visit the ANZ group for the get the financial
services or investment advice (Micu and Micu, 2016). Though, the most of the people believe in
investing the amount in cryptocurrencies because this is the way through which they can earn
high returns. The rise in the demand of cryptocurrencies has brought the heavy fluctuations in the
prices (Rothaermel, 2015). This fluctuation provides the benefit of the amount due to which the
people perform more transaction with bitcoin exchanges. Moreover, it is found that the charges
of the banking services are high but the transfer of bitcoin include less transaction cost.
Technological factors
The technology is one of the major factors that influence the working. Almost all financial and
banking service providers offer the services with the help of the smartphone. This will provide
the convenience to the customers as they can access the services from any location. Though, the
technology advancement has brought many ways through which attract the customers towards
new technology (Chuang and Hu, 2015). The paper of Satoshi Nakamoto shows that the
technology has brought the digital currency. The emergence of cryptocurrencies was possible
with the help of the blockchain technology.
Legal factors

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The legal factors are essential to be considered by the organizations that are operating the
business in the competitive market. ANZ ensures that they are able to meet the responsibility
related to the legal laws. The ANZ group perform their operations under the Australian and New
Zealand banking act. Though, this is the fact that the group has the threat because of the approval
of the Cryptocurrencies in the Australian and New Zealand market (Bajpai, 2018). This is the
way through which the use of digital currency will increase.
Environmental factor
The environment factors include the analysis of the contribution of the company for the welfare
of the community and society. The company ensures that they are offering most of the services
through digital mode which helps them to decrease the usage of the paper which is done for the
welfare of the society. This factor doesn’t influence the working of the company in Australia and
New Zealand market.
Porter’s five forces
The Porter's five forces provide the analysis of the competitive environment of ANZ group in the
market where the company operates its business operations. This analysis is included in the
Diamond model (Dobbs, 2014).
Bargaining power of suppliers: - The suppliers of the banking group include the RBA (Reserve
Bank of Australia) who work as the backbone of the company. This means that there is less
bargaining power of the RBA (ANZ Group, 2018). Though, the ANZ group has some more
suppliers which include customers and businessmen. These people invest their amount or make
the deposit which helps the company in managing the supply of the money. This is also the fact

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that the rise in the use of the cryptocurrencies is making the people get attracted for the
investment.
Bargaining power of customers: - The customers of ANZ group include a citizen of the
country. This has been observed that most of the people rely on the banking and financial
services due to which there are different types of banking facility providers are available in the
market. Therefore, the company has the threats from the different banks such as AMP bank,
Commonwealth Bank of Australia, Queensland bank and many others. Along with this, most of
the people are getting attracted towards the cryptocurrency.
Threats of New Entrants: - There is less threat of the new entrants because new business
doesn't want to open their new business in the banking and financial services. Establishing the
business in the market needs huge capital which is not easy to source for the new business.
Though, the introduction of the cryptocurrency was a big threat for the ANZ group (Vlasov,
2017).
The threat of substitutes: - ANZ group found that there are many other banks are available due
to which there is a high threat of substitutes. The banking and financial services are offered by
the many other banks (Lee and Carter, 2011). Moreover, there are different types of
cryptocurrency that are available in the market and these currencies are used by many companies
which shows that the substitute of the products.
Rivalry among the Existing Competitors: - ANZ Company found the intense rivalry not only
in the market of Australia but also in the market of New Zealand. The rise in the use of the
cryptocurrencies has increased the rivalry among the existing competitors.

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Strategic analysis of the company
This sector of the report throws light on the strategic dilemma that is faced by the ANZ group
due to the emergence of the digital currency in the market. The company has found that
maximum people are getting attracted towards Cryptocurrencies. This reflects the future of the
ANZ Group which is in trouble because this leads to the risk (Décourt, Chohan and Perugini,
2017). Businessmen and the normal customer found that digital currency is one of the easiest
ways of conducting the business. Though, this is also the fact that the use of the digital currency
will eliminate the role of banks and the hard currency from the market. Along with this, the
reserve bank of the country will not be able to manage the flow of money in the market which
directly or indirectly affects the economy of the country (Beck and Losse-Müller, 2010).
Recommendations
It is suggested to the company to bring the awareness for the financial and banking services in
the market. Moreover, the people should be aware that cryptocurrencies don't involve any
intermediary due to which loss or fraud might take place in the market. The flow of money
should be managed by the government in the market. Along with this, the prices of
cryptocurrencies fluctuate a lot due to which the investors might face the loss in the investment
done by them.

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Conclusion
In the end, it can be concluded that there are different factors that influence the decisions of the
company for the growth in the business. These factors are analyzed with the use of the PESTLE
analysis and Porter’s five forces analysis. These frameworks are essential for the analysis of
external factors. The emergence of the cryptocurrency affects the financial operations within the
company. Moreover, there are different risks that are related to the cryptocurrency and their
likely impact on the ANZ group which are discussed in the strategic analysis.

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References
ANZ Group (2018) About ANZ [Online]. Available from: http://shareholder.anz.com/our-
company/profile?_ga=2.44436707.690094383.1526027865-973082256.1526027865 [Accessed
on 19th May 2018]
ANZ Group (2018) ANZ Shareholder Centre [Online]. Available from:
http://shareholder.anz.com/our-company/profile/history?
_ga=2.44436707.690094383.1526027865-973082256.1526027865 [Accessed on 19th May 2018]
Bajpai, P. (2018) Countries Where Bitcoin Is Legal & Illegal (DISH, OTSK) [Online]. Available
from: https://www.investopedia.com/articles/forex/041515/countries-where-bitcoin-legal-
illegal.asp [Accessed on 28th March 2018]
Beck, T. and Losse-Müller, T. (2010) Financial sector taxation: Balancing fairness, efficiency,
and stability. VoxEU. org, 31.
Chuang, C.C. and Hu, F.L. (2015) Technology strategy-innovating for growth of ANZ
Bank. International Review of Management and Business Research, 4(3), p.682.
Décourt, R.F., Chohan, U.W. and Perugini, M.L. (2017) BITCOIN RETURNS AND THE
MONDAY EFFECT. Horizontes Empresariales, 16(2).
Dobbs, M. (2014) Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), pp.32-45.
Kotler, P. (2015) Framework for marketing management. India: Pearson Education.

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Kraaijenbrink, J., Spender, J.C., and Groen, A.J. (2010) The resource-based view: a review and
assessment of its critiques. Journal of management, 36(1), pp.349-372.
Lee, K. and Carter, S. (2011) Global marketing management. Strategic Direction, 27(1).
Micu, I. and Micu, A. (2016) Financial Technology (Fintech) And Its Implementation On The
Romanian Non-Banking Capital Market. SEA-Practical Application of Science, 11, pp.379-384.
Reuters (2018) ANZ to exit Cambodian venture with stake sale to Japan's J Trust [Online].
Available from: https://in.reuters.com/article/us-anz-divestiture-cambodia/anz-to-exit-
cambodian-venture-with-stake-sale-to-japans-j-trust-idINKCN1II175 [Accessed on 19th May
2018]
Riasi, A. (2015) Competitive advantages of shadow banking industry: An analysis using Porter
diamond model. Business Management and Strategy, 6(2), pp.15-27.
Rothaermel, F.T. (2015) Strategic management. India: McGraw-Hill Education.
Royal Commission (2018) Public submissions [Online]. Available from:
https://financialservices.royalcommission.gov.au/Public-submissions/Pages/default.aspx
https://www.bitcoin.com/you-need-to-know [Accessed on 28th March 2018]
Srokosz, W. and Kopciaski, T. (2015) Legal and Economic Analysis of the Crypto Currencies
Impact on The Financial System Stability. Journal of Teaching and Education, 4(2), pp.619-627.
Vlasov, A.V. (2017) The evolution of e-money. European Research Studies Journal, 20(1),
pp.215-224.

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