MGT5STR - Strategic Analysis: Navigating Cryptocurrency Risks at ANZ

This report provides a strategic analysis of Bitcoin and cryptocurrency for the Australia and New Zealand Group (ANZ), a major banking institution. It begins with a background of cryptocurrency and ANZ's initial reactions, followed by a PESTLE analysis outlining political, economic, social, technological, legal, and environmental factors influencing ANZ's engagement with cryptocurrencies. A competitive environment analysis using Porter's Five Forces highlights threats from new entrants, supplier power, buyer power, rivalry, and substitutes. The report then delves into a strategic analysis of Bitcoin, discussing its potential to disrupt traditional financial systems and the challenges of ensuring transaction validity. The report concludes with recommendations for ANZ on how to address the risks and opportunities presented by cryptocurrency.

Running Head: Strategic Analysis
Strategic Analysis
Bitcoin and Crypto Currency

1
Strategic Analysis
Contents
Introduction.................................................................................................................................................2
Background of Crypto Currency with ANZ...................................................................................................2
Strategic Environment.................................................................................................................................3
Competitive Environment............................................................................................................................5
Strategic Analysis of Bitcoin.........................................................................................................................5
Conclusion...................................................................................................................................................7
References...................................................................................................................................................8

2
Strategic Analysis
Introduction
Australia and New Zealand Group which is also known as ANZ in short is an old name in banks
which is considered to be the fourth biggest bank of Australia. It is in business since a very long
time and the business it has is of retail and commercial banking. This organization presently
operates in approximately 32 locations across world and this is the reason behind the bank
getting the title of largest banking group. Its listing is done in the top 50 banks in the world and
this can simply be considered a great honor this bank has got in itself. The main objective of the
organization is to become super regional bank. The total numbers of employees in the company
are 48,000 including all the offices across world. ANZ looks forward to develop in Asia Pacific
region and desires to source approximately 30% of the profit earned from American region and
Asia Pacific (ANZ, 2018).
Crypto Currency Background with ANZ
When crypto currencies approached the market, the banks were also focused upon and public
were making money out of the transactions and investing within the currencies. These currencies
presently are the most talked about in the market as they operate for work like the method of
swap with usage of cryptography for safe dealings. Such crypto money make the use of the
decentralized electronic money & systems of banking (Bhosale & Mavale, 2018). Decentralized
control of each type of currency always works by the way of block chain which is public
database and is open for everyone. It is used for making the transactions and other functions. If a
person looks for the certainty in the delivery of the money transferred and also want to ensure
that the transaction would go to the same person it should be delivered to, then these crypto
currencies can help him. This makes it all a great deal to be done. The block chain does this for
the crypto currencies which need to be transferred to any other person. And this is known to be
as Bitcoin. This currency is digitized and could simply be held electronically. No one else can
take power over it. This increases the industry with usage of the software that resolves the issues
of mathematics (Bech & Garratt, 2017).

3
Strategic Analysis
Bad effect of the banking existed such as the reason of the dangerous rise in currency, downfall
in the buying of power & living regularities of the people, tax which is invisible for all people for
support in find wars & social wellbeing programs were the reasons. Bitcoin was the one which
could bring all crashes down. In 2016, many public in banking companies & organizations were
flippant of Bitcoin (Berentsen & Schär, 2018).
In the year 2015, ANZ group desired to find out about Bitcoin out & they thought of Bitcoin as a
danger to them and their business & also at the same time though if Bitcoin might help their
business to grow. All this was confusing to ANZ group of authorities. Then Nigel Dobson, the
GM of the wholesale digital transformation of ANZ, set out to search all about Bitcoin and other
currencies. He then took out each little detail about the same. Now they had number of proofs
for the same concept and how these currencies work (Durden, 2017). Dobson felt that at least
there is a good part of the transaction is the resolution of the compromise. Therefore, Dobson had
evidences about concept of the other banks and organization about both the processes. Though,
the person who spoke on the behalf of ANZ informed that they won’t exclude users buying the
digital currencies.
Strategic Environment
Environment study of any company could be done by performing the Pestle analysis. The pestle
for ANZ follows below:
 Political Factors: These factors verify the degree to which the authorities like government
influences the economy or it can influence any organization as well. These authorities can
anytime impose policies relate to tax or can change norms and polices which should
benefit people in the end. The laws which are new for the currencies that work digitally
and working in Australia were being put into practice by AUSTRAC. It rose up chances
for division of financial intelligence and data related to use of currencies that operate
digitally with the shareholders in any industry. This works in both way positively &
negatively for ANZ. Assertive because crimes like breaches of data could be fought with

4
Strategic Analysis
and negative because the currencies have now taken huge part in the market (Austrac,
2018).
 Economic Factors: These factors always studies about the organization’s performance
with respect to the economy considering the long term stability. Prior to the crypto
currencies, the monetary transactions were allowed by central banks. Since Bit coin’s
inception, the scenario in the market has completely changes. Now the power has shifted
from all the banks to block chain. This helps the economy on the whole and hence, ANZ
too. The power could be challenges with people having access to crypto Currencies (Jain,
2017).
 Social Factors: The environment which is social is examines the market and trends of
culture and demographics are verified. There are a large number of people who are under
banked in US. With the inception of the crypto currency, people are recognizing the
importance of money, economy and many other factors. Issues which are social illustrates
that it is to include swath of genuine concerns and many of these kinds of issues are
related with the Bitcoin. Yet this idea does not relate to the issues (Rastogi & Trivedi,
2016).
 Technological Factors: This analysis is about the new interventions being done that may
help or impact the firm in any way. The crypto currencies do not require the platform or
online portal etc to work on. It works on the basis of code and software which facilitates
transactions with no services and also provides the guarantee of the delivery that it will
reach to the exact person on time. This process affected the technology very much which
was being utilized by banks earlier like ANZ.
 Legal Factors: They refer to atmosphere of business in particular nation whilst in that
country exist policies which are abided by all the firms in the country. Laws related to the
crypto currency were being passed in Australia which are passed out by AUSTRAC.
ANZ and other banks were affected by that (Blanc, 2016).
 Environmental Factors: This refers to the factors that may impact the firm in terms of
climate and environment. Bitcoin is been given another name which is Virtual gold
because it was incepted in the procedure called mining. The combining of the mining
code online needs to be of high powered in the usage that is needs by the PC. Therefore,
much more power is required. This may lead to global warming (Gupta, 2013).

5
Strategic Analysis
Competitive Environment
The Competitive market of any company is done by analysis the five factors given by Porter.
They are as follows in terms of ANZ.
 New Entrant Threats: ANZ was in danger by development of the crypto currencies
because of this currency money and very specifically Bitcoin; banks were facing lots of
problems. They also thought of the danger that these currencies will be accepted by the
people and so by their competitors as well (DeVries, 2016).
 Supplier’s Power: There were multiple firms which desired to collaborate with these
currencies and particularly Bitcoin because it was growing very fast in the market. The
share of Bitcoin fluctuated very quickly and in big numbers and same was with some
other currencies too. Supplier’s power became high due to the currencies booming that
time. Therefore, all these factors were new threat for ANZ group (Ven, 2017).
 Buyer’s Power: Similarly to the supplier’s power, the buyer’s power also became a threat
to ANZ. The firm primarily was not into digital currencies. At the time when Dobson
found about this, he got intrigued by the idea. Then, the collaboration was done with the
larger companies with respect to Bitcoin. Therefore, the buyer’s power went low.
 Rivalry: The reasons which are mentioned above all are the threats for ANZ group.
 Substitute’s threats: Since the crypto currencies came into picture, the market started
fluctuating like anything. The market was really not predicted by any of the people. ANZ
was dealing with the money in normal terms like it used to be before and Bitcoin or other
crypto currencies brought a new threat to ANZ. No one absolutely would use the
conventional technique of transactions now (Gandal & Halaburda, 2014).
Strategic Analysis of Bitcoin
Bitcoin and any other crypto currency all are the same in way. Bitcoin was incepted in the year
2009 by Satoshi Nakamoto. In the crypto currencies, all kinds of transaction are being done by
itself without having any third party around or any platform too. Such currencies can help in the
usage of the purposes like Expedia, for booking the furniture online, etc. Recently in the years

6
Strategic Analysis
2016 to 2017, Bitcoin caught attention of many people at the same time and that is why the
prices of this went high in thousands of Dollars at the same time.
Commerce of internet is dependent on the entirely financial organizations that serve like the 3rd
parties for allowance of payment. These schemes work for transactions yet there lies issues in the
given model. This model is weak in stopping provoking problems. The transactions which
cannot be reversed cannot be made possible since financial firms are unable to ignore
disruptions. Therefore, the cost of provoking rises up that which stops the size of practical
transaction and also gives away the chance that exists for the small enterprise transactions
(D’Alfonso et al., 2016).
Each holder transfers the coin to the other by digital signatures giving out the key to the other
holder by combining this with the end of the coin. The person who is paying can verify the
signatures to the chain of holders. The issue comes when the payee is unable to verify the
validity of the expenditure being done or more than once i.e. if the con is spent only once or not.
This is t he issue which is mentioned in the study of Bitcoin.
The advice & also the way out to the issue is that the development of the faith in central
authority which could be able to monitor every transaction for this double coin spending is to be
done. When transaction process is completed, coin must go back to developed power for issue of
coin and they are issued by authority are the ones to be believed on and rest must not be trusted.
This process looks exactly same like bank within which the whole system is dependent on the
firm’s being run by the authority because each amount is mandate to go via them only. Within
the procedure, the payee is required for verifying that he did sign the prior transactions or not.
The major objective is that the transactions that were done prior were only the ones to be
believed on and the attempts which were made later were not being looked upon for double
spending. People have to be aware and conscious about the transactional being done by him so
that they can confirm about the other or fake transactions and recognize them. The model which
is mint based gives the authority to be conscious of all the transactions and to judge which the
primary transaction that was done is. For completion of procedure with no honest party,
transactions must subsist by announcing them in public. Also, there is a good requirement of the

7
Strategic Analysis
system within which the candidates consents on the similar and solitary history of the order in
which they expected the money.
Conclusion
The report mentioned above emphasizes on the ANZ bank in terms of the Crypto Currencies
which have become famous in recent years in 2016 – 2017. The link between both the two is
shared with doing the analysis of the strategic environment and competitive environment with
the help of Pestle and Porter analysis. This analysis is done with respect of the crypto currencies
and particularly Bitcoin. However, the currencies were beneficial for the public in multiple ways
like electronic transaction and digital currencies since came into the market trends etc. yet banks
and other few firms faced few problems because of these currencies (Srokosz & Kopygciaeski,
2015). In the end, the study of the currency of “Bitcoin: A Peer-to-Peer Electronic Cash System”
was mentioned with some of the issues, that are discussed and some recommendation based on
the problems are shared in this report.

8
Strategic Analysis
References
ANZ, 2018. About ANZ. [Online] Available at: http://shareholder.anz.com/our-company/profile
[Accessed 7 June 2018].
Austrac, 2018. New Australian laws to regulate cryptocurrency providers. [Online] Available at:
http://www.austrac.gov.au/media/media-releases/new-australian-laws-regulate-cryptocurrency-
providers [Accessed 7 June 2018].
Bech, M. & Garratt, R., 2017. Central bank cryptocurrencies. [Online] Available at:
https://www.bis.org/publ/qtrpdf/r_qt1709f.pdf [Accessed 7 June 2018].
Berentsen, A. & Schär, F., 2018. A Short Introduction to the World of Cryptocurrencies. Federal
Reserve Bank of St. Louis REVIEW, 100(1), pp.1-16.
Bhosale, J. & Mavale, S., 2018. Volatility of select Crypto-currencies: A comparison of Bitcoin,
Ethereum and Litecoin. Annual Research Journal of SCMS, 6.
Blanc, G.L., 2016. The effects of crytocurrencies on the banking. [Online] Available at:
http://commons.emich.edu/cgi/viewcontent.cgi?article=1498&context=honors [Accessed 7 June
2018].
D’Alfonso, .A., Langer, P. & Vandelis, Z., 2016. The Future of Cryptocurrency. [Online]
Available at: https://www.economist.com/sites/default/files/the_future_of_cryptocurrency.pdf
[Accessed 7 June 2018].
DeVries, P.D., 2016. An Analysis of Cryptocurrency, Bitcoin, and the Future. International
Journal of Business Management and Commerce , 1(2).
Durden, T., 2017. Central Banks Are Driving Many To Cryptocurrencies. [Online] Available at:
https://www.zerohedge.com/news/2017-06-17/central-banks-are-driving-many-cryptocurrencies
[Accessed 7 June 2018].

9
Strategic Analysis
Gandal, N. & Halaburda, H., 2014. Competition in the Cryptocurrency Market. [Online]
Available at: https://www.econinfosec.org/archive/weis2014/papers/GandalHalaburda-
WEIS2014.pdf [Accessed 17 May 2018].
Gupta, A., 2013. Environment & PEST Analysis: An Approach to External. International
Journal of Modern Social Sciences, 2(1), pp.34-43.
Jain, Y., 2017. 5 Impacts of Bitcoin on Economy, Banking & Finance. [Online] Available at:
https://www.newgenapps.com/blog/impact-of-bitcoins-on-the-economy-banks-finance
[Accessed 17 May 2018].
Rastogi, N. & Trivedi, M.K., 2016. PESTLE TECHNIQUE – A TOOL TO IDENTIFY
EXTERNAL RISKS IN CONSTRUCTION PROJECTS. International Research Journal of
Engineering and Technology , 3(1).
Srokosz, W. & Kopygciaeski, T., 2015. LEGAL AND ECONOMIC ANALYSIS OF THE
CRYPTOCURRENCIES IMPACT ON THE FINANCIAL SYSTEM STABILITY. Journal of
Teaching and Education, 4(2), pp.619-27.
Ven, F.V.D., 2017. Blockchain & Porter’s 5 forces: disrupting the financial power balance.
[Online] Available at: https://medium.com/@frankvandeven/blockchain-porters-5-forces-
disrupting-the-financial-power-balance-ee5cb58354db [Accessed 17 May 2018].