Strategic Management for Commonwealth Bank: Innovation through FinTech

Running head: STRATEGIC MANAGEMENT
Strategic Management
Assignment 2
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1STRATEGIC MANAGEMENT
Executive Summary
This report sheds light on the business growth through strategic innovation. Commonwealth
Bank is the largest bank of Australia and Commonwealth Bank can reinvent the value of the
customers through strategic innovation. In Australia, the banking sector of Australia is currently
focusing on the scrutinising the current earning through legal oversight. The customers must be
able to access the banking facility all across the globe. Bankers think that threat of banking lie in
the online platform from the tech giant Google, Apple and Facebook. Economic condition is
stable in Australia and people keep their money in bank and financial instructions. Technologies
play important role in banking as the people like to use Smartphone and desktop for money
transaction. BCG matrix is used to justify the position of the products of the bank;
Commonwealth Bank can keep the stars for online banking and cash cows for the various types
of loans. GE McKinsey Framework has been given in this report to show the position and
investment opportunity in innovation. Commonwealth Bank is taking the innovation of FinTech
which aims to compete with traditional financial methods that can deliver the financial services.
MACS framework has been used to as it shows the snapshot of the business as it considers
improving the service innovation. FinTech technology is the innovation in the financial banking
sector as it is the use of financial study that can apply in the technology to develop financial
activities. FinTech is the new processes, applications and products of the business models in the
financial businesses.

2STRATEGIC MANAGEMENT
Table of Contents
Introduction......................................................................................................................................3
Overview of the organisation: Commonwealth Bank.....................................................................3
1. Identifying the need for innovation.............................................................................................4
Threats evident from industry analysis........................................................................................4
Threats from PESTLE analysis...................................................................................................5
2. Identifying and evaluating its current growth strategy................................................................6
BCG Matrix.................................................................................................................................6
McKinsey GE framework............................................................................................................7
3. Evaluating innovation opportunity it is currently pursuing.......................................................10
MACS framework and considering its growth vehicle choice..................................................10
Recommendations..........................................................................................................................12
Conclusion.....................................................................................................................................13
Reference List................................................................................................................................14
Appendix........................................................................................................................................17

3STRATEGIC MANAGEMENT
Introduction
Strategic innovation is about establishing the growth strategies, net service categories or
the business model that help the organisation to change the process of generating new values for
the customers and the organisation itself. Innovative strategies help the organisation to drive the
success without changing the underlying technologies (Palacios-Marques et al. 2015). Strategic
innovation is about the making an innovation of the strategy and the organisations can make
dramatic redefinition of the base of the customers. The organisations can reinvent the concept of
the value of the customers and the management of the organisations can also choose dramatic
redesign of the end-to-end value chain of the architecture.
In this report, Commonwealth Bank is chosen to identify the need for the innovation of
the business. At the first part of the report, threats evident from the industry and the external
environment are explained. In the second part, identification and evaluation of the current
innovation strategy are discussed using BCG and McKinsey GE frameworks. In the final section
of the report, one innovation opportunity of Commonwealth Bank which the bank is currently
pursuing is stated using the MACS framework.
Overview of the organisation: Commonwealth Bank
Commonwealth Bank is public sector bank with businesses across Asia, New Zealand,
Australia and the United States and in the UK. Headquarter of the Commonwealth Bank is
situated in Darling Harbour in Sydney, Australia. Currently, Commonwealth Bank of Australia
has its branches in more than 1100 locations. Commonwealth Bank offers the products and
services like finances and insurances, corporate banking, investment banking, global wealth