Innovation: Commonwealth Bank Australia

Running head: INNOVATION: COMMONWEALTH BANK AUSTRALIA
Innovation: Commonwealth Bank Australia
Name of the Student
Name of the University
Author’s note

1INNOVATION: COMMONWEALTH BANK AUSTRALIA
Introduction
Innovation is the process by which an individual or a group of people come up with an
improved version of an existing idea. The business model of an organisation is the framework
that is developed to base the operations of the business, it is like a guideline. For a business that
runs on innovation and improvement it can be said that the business model of that company is
based on innovation (Gokhberg & Meissner, 2013). Some of the examples of such organisations
are: Apple, Amazon, Microsoft etc. In this assignment the role of role of innovation in a business
model is going to be analyzed by study the strategies of Commonwealth Bank Australia.
Overview of the company
The organisation is a multinational financial institution that has its headquarters in
Sydney. The company was founded in 1911 and has a long history of ups and down in the
business, in this tenure the organisation has garnered goodwill not only among the clients but
also among the other stakeholders. The company went public in the year 1991
(commbank.com.au, 2017).
The mission of the organisation is to make the company most accessible bank in Australia.
The objectives of the company are as follows:
 To strive towards a sustainable future
 To keep up with the objectives of the shareholders
 To expand the business further (commbank.com.au, 2017)

2INNOVATION: COMMONWEALTH BANK AUSTRALIA
Literature review
Business model
According to Chesbrough (2010), a business model is a framework that is drawn in order
to initiate the process of business and develop an understanding of the process of the operations
that will run the venture. It contains the internal resources and external opportunities that build a
scope for the business to grow and expand. Not only that it will also help the company trace the
revenue network juxtaposing the particular of the cost that will be required to carry out the
operations of the business. On the other hand, Zott et al. (2011), says that a business model is
used to develop a strategic management plan to achieve the objectives and to align the interest
with the stakeholders of the organisation.
Disruption
As discussed innovation is developing new attributes to an existing idea, an
innovation is categorized as disruptive. Disruptive innovation is the idea of innovation which has
the potential of replacing existing ideas in the market. According to Christensen et al. (2015), the
organisation that can create disruptive innovation idea can use the strategy to ensure competitive
advantage in the industry.
Advantages of disruptive innovation are:
 Helps in obtaining an edge over the competitors in the market, furthermore also provide
opportunity for the company to become the market leader in the long run.
 It provides a path for the organisation explore new ideas.

3INNOVATION: COMMONWEALTH BANK AUSTRALIA
The biggest disadvantage of this kind of innovation is that there is a high rate of risk in
the process as it the target market of the company may be apprehensive of the product or service
as the idea is completely new the utility may not be known to the target market and therefore it
may not be accepted (Christensen et al., 2015).
Barriers of business model innovation
 Internal resistance to take risk in the process of innovation due to its uncertain outcomes
is one of the significant challenges faced by the company
 Following the safe route and incorporating the variables in the business model like others
in the market may end up in losing an opportunity to build a new market (Souto, 2015)
Smart connected products: Commonwealth Bank
The products which are technologically advanced and have a access to connected devices
can be called as a smart connect product. This helps an organisation in revolutionizing the
operations of the business and brings out a broader perspective of the business model is called
Smart connected products (Porter & Heppelmann, 2014).
Opportunities:
With a help of smart connected products the company has an opportunity to allow the customers
to have a wide range of services within the geographical boundaries of the home country.
It will provide the company an opportunity to fundamentally think of a change in the design as
well as the operations of the business based on the requirement of the consumers helping the
bank build a value oriented relationship with the customers which are essential for the facilities
that a finance company like commonwealth bank requires (Porter & Heppelmann, 2014).