MGT5STR: ANZ Group Strategic Response to Cryptocurrency Challenge

This report provides a strategic analysis of ANZ Group, focusing on the implications of cryptocurrency within the banking and financial sector. It begins with an introduction and background of ANZ Group, followed by a PESTLE analysis outlining the political, economic, social, technological, and environmental factors influencing the group's strategic decisions. A Porter's Five Forces analysis assesses the competitive environment, highlighting industry rivalry, bargaining power of suppliers and buyers, and the threat of new entrants and substitutes. The report then employs the I/O model to analyze ANZ's strategic position and recommends focusing on customer satisfaction and developing a strong cryptocurrency policy. The analysis concludes that while cryptocurrency presents both opportunities and challenges, ANZ Group needs a well-defined strategy to navigate this evolving landscape, and students can find similar solved assignments on Desklib.

ANZ GROUP: STRATEGIC ANALYSIS
ANZ GROUP: STRATEGIC ANALYSIS
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ANZ GROUP: STRATEGIC ANALYSIS
Table of Contents
Introduction & Strategic Background................................................................................................2
Organizational background....................................................................................................................... 2
Strategic environment.............................................................................................................................3
PESTLE analysis............................................................................................................................................. 3
Competitive environment.......................................................................................................................4
Porter Five forces analysis......................................................................................................................... 4
Strategic Analysis......................................................................................................................................6
IO model analysis for ANZ group.............................................................................................................. 6
Recommendations........................................................................................................................................ 7
Conclusion....................................................................................................................................................9
References....................................................................................................................................................9

ANZ GROUP: STRATEGIC ANALYSIS
Introduction & Strategic Background
With the introduction of crypto currencies there has been a change in the banking
industry. Today the banks are not only used for loans and deposits. There are various instruments
of banking that modern banks utilize. These are the instruments like credit cards,
cryptocurrencies etc. The objective of this paper is to do the strategic analysis of ANZ group.
The organization realizes that cryptocurrencies like Bitcoin and Ripple are the next big things.
However, there are various issues involved with the use of cryptocurrencies (Blankenship, 2017).
ANZ bank realizes that one of the biggest issues with the use of cryptocurrencies is lack of
regulation. It is believed that Satoshi Nakamoto is the founder of bitcoin. However, this is a
virtual figure. Moreover, ANZ group cannot regulate the cryptocurrencies market at its own end
(Blankenship, 2017). A brief organizational background about ANZ group can be discussed as:
Organizational background
The Australia and New Zealand Banking Group Limited, commonly called ANZ, is the
third largest bank by market capitalisation in Australia, after the Commonwealth Bank and
Westpac Banking Corporation. The group is a pretty old group in the country as it was
established in the year 1853. In the last 150 years, ANZ group has expanded in different parts of
the world. In fact, ANZ group has also expanded outside Australia and New Zealand and today
the company has presence in 35 countries. The group has a revenue of AUD 21 billion with a net
income of AUD 7.4 billion (Krafft, Della Penna & Pentland, 2018). ANZ group provides
employment to more than 50,000 people. It is expected that the company would continue to do
good in the market.

ANZ GROUP: STRATEGIC ANALYSIS
Strategic environment
ANZ operates in a healthy strategic environment in the country. There are number of
factors that influence the strategic decision of organization. The key factors that influence the
strategic decision making of ANZ group are political, social, technological, etc. PESTEL
analysis is a powerful tool to do the analysis of the key factors that affects the strategic decision
of any organization (Motsi-Omoijiade, 2017).
PESTLE analysis
The PESTEL analysis of banking and financial industry in Australia can be discussed as:
Political & Legal factors: The political factors are the key factors that affects the strategic
decision making of any organization. The banking industry in Australia is one such industry
where financial regulation is high. The government has direct control over the banks in the
country and government creates a system of check and balances for banking and financial
institutions. The legal and the regulatory framework is strong in the country and any financial
institution needs number of approvals and licenses form government (Motsi-Omoijiade, 2017).
The government does not support the free trade of crypto currency. Therefore, political factors
are not favourable for the trade of crypto currency in the country.
Economic factors: The economic factors are the most important factors for banks and financial
institutions. The economy of Australia is growing at a good growth rate and it means a good
opportunity for banking and financial institutions in the country. It is expected that the economic
industry would remain positive in the country (Krafft, Della Penna & Pentland, 2018). People
usually look for the options that can give them good returns and crypto currency is one such

ANZ GROUP: STRATEGIC ANALYSIS
platform. However, only the wealthy people would be able to afford in crypto currency. Overall
economic risks are high in crypto currency.
Social factors: The social factors are also positive for the banking and financial industry in the
country. In the recent times, there has been an increase in the disposable income of consumers
and this is a positive sign for banking and financial institutions. In recent times, there has been a
social threat of cryptocurrency on banking and financial institutions in the country. The use of
cryptocurrency is a big social phenomenon that has a deep impact on industry (Motsi-Omoijiade,
2017). Crypto currency is still not considered as a main stream currency in the industry.
Therefore, social factors are not facourable for crypto currency.
Technological factors: The key technological factors that has impacted the banking and
financial industry is crypto currencies. It would be correct to say that crypto currencies have
completely revolutionized the banking industry in Australia and other parts of the world. Today,
people have a different expectation from bank because of the emergence of crypto currencies
(Gainsbury & Blaszczynski, 2017). The technological factors are positive for crypto currency as
the operations of crypto currency is based on strong technology.
Environmental factors: The environmental factors are almost indifferent for banking and
financial industry in the country. At the same time, it is expected that the large banking groups
like ANZ would use the sustainable means of operations to support the environment. The
environmental factors does not have much of the difference on the operations of crypto currency
in Australia.

ANZ GROUP: STRATEGIC ANALYSIS
Competitive environment
Porter's Five Forces Framework is a tool for analysing competition of a business. It draws
from industrial organization (IO) economics to derive five forces that determine the competitive
intensity and, therefore, the attractiveness (or lack of it) of an industry in terms of its profitability
(Drozd, Lazur & Serbin, 2018). The five forces for ANZ group can be discussed as:
Porter Five forces analysis
The porter five forces analysis is a powerful tool to assess the competition for any firm
(Zulhuda & Binti Sayuti, 2017). These five forces for the strategic position of ANZ group can be
discussed as:
Industry rivalry: The industry rivalry is high in the banking industry in Australia. There are
number of players in the market and they have very little to offer in terms of product
differentiation (Krafft, Della Penna & Pentland, 2018). Today, consumers have various options
to choose form and generally the consumer would choose the bank that provides better service. It
is expected that the industry rivalry would further increase with time. For crypto currency,
consumers can trade with any supplier. Therefore, the industry rivalry is high.
Bargaining power of suppliers: The key suppliers to banking and financial industry players are
government and financial institutions. The bargaining power of suppliers is moderate in the
industry. The government has direct control over the banks in the country and government
creates a system of check and balances for banking and financial institutions. With this
government exercise some power over the banks and financial institutions in the country
(Gainsbury & Blaszczynski, 2017). However, with crypto currency, suppliers are not known and
suppliers of crypto currency cans have high power (Park, 2017).

ANZ GROUP: STRATEGIC ANALYSIS
Bargaining power of buyers: The bargaining power of buyers is high in the industry. The
competition is high, and consumers have number of options. With the use of Internet banking
and mobile banking the bargaining power of buyers has further increased as customers do not
have to go to bank to buy crypto currency (Kbilashvili, 2018).
Threat of new entrants: The threat of new entrants is low in the industry as it is not easy to start
a bank or financial institution (Thelwall, 2017). However, various mergers and joint ventures can
happen. Still, it is expected that the threat of new entrants would remain low for this industry
(Drozd, Lazur & Serbin, 2018).
Threat of substitute: The threat of substitute is average or relatively low in this industry. There
is no easy substitute for banks and financial institutions. However, there are various small and
private players that are considered as substitute (Kbilashvili, 2018).
Strategic Analysis
ANZ group is doing good in the market. One of the tools to do the strategic analysis of
any organization is IO model. The I/O or Industrial Company model adopts an external
perspective (Krafft, Della Penna & Pentland, 2018). It starts with an assumption that forces
external to the company represent the dominant influences on a company's strategic actions. The
IO model for ANZ group can be discussed as:
IO model analysis for ANZ group
This model suggests that the first thing that organization should do is analysis of external
environment. With this model, ANZ group should do four key things before doing strategy

ANZ GROUP: STRATEGIC ANALYSIS
implementation (Bacina & Kassra, 2017). The flow of IO model for ANZ group can be
highlighted as:
Step 1: Study external environment – It means that ANZ group should assess the key political
and non-political factors in Australia that affects the use of cryptocurrency. For example, what is
the stand of Australian government for the use of cryptocurrencies in the country?
Step 2: Analyse the attractiveness of industry – It means to perform the cost benefit analysis and
then take the decision towards the use of any financial instrument like crypto currencies
(Jackson, 2018). For example, is the use of cryptocurrencies beneficial for ANZ group in long
term or this is just a short-term instrument?
Step 3: Strategy formulation for ANZ group – It means to devise the business level strategy of
ANZ group like product differentiation or cost leadership. Currently, ANZ group follows the
service differentiation strategy (Hughes & Middlebrook, 2015).
Step 4: Get required assets and skills – It means to recruit the right set of people
Step 5: Strategy implementation – It means to take various stakeholders together and implement
the strategy (Krafft, Della Penna & Pentland, 2018).
The strategic analysis of ANZ group reveals that the external factors like rise of
cryptocurrency can greatly impact the operations of company. The lack of regulation in the
cryptocurrency market is one of the biggest concern for financial players in the market. The key
thing for ANZ group is to develop the strategy for the use of cryptocurrency (Thelwall, 2017).
The key recommendations for ANZ group can be discussed as:

ANZ GROUP: STRATEGIC ANALYSIS
Recommendations
The ANZ group has done well in the recent past; however, there is a scope of
improvement (Thelwall, 2017). The key recommendation areas for ANZ group can be discussed
as:
i. Focus on absolute customer satisfaction
Due to high competition in the market, organizations must treat customers as king. The
focus on MVP is the process that benefits to establish the customers’ feedback through minimum
effort. It is also useful to test the essential business hypothesis without perfecting the products or
services too early. In this context, Adapa & Roy (2017) suggested that in next step of innovation
accounting MVP allows a business to get the decision on the basis of innovation ideas. After
completing the second stage, the process evaluates the progress business according to the
decision and makes changes in innovation process as per the outcome (Chohan, 2017).
ii. Strong crypto currency policy
It is important that ANZ group should take the people into confidence about its stand on
crypto currencies. Therefore, it is recommended that ANZ group should have a strong policies
and guidelines towards the use of crypto currencies and the same should be highlighted to
consumers (Bacina & Kassra, 2017).
Conclusion
The above paper discusses the strategic analysis for ANZ group. It would be correct to
say that the use of cryptocurrency is a big social phenomenon that deeply affects the players in
banking and financial industry in the country. The industry attractiveness is high as the threat to

ANZ GROUP: STRATEGIC ANALYSIS
entry is high. However, the competition is high in the industry. It is recommended that ANZ
group should have a strong policy in place about the use of cryptocurrency. It would strengthen
the position of group in the industry.

ANZ GROUP: STRATEGIC ANALYSIS
References
Adapa, S., & Roy, S. K. (2017). Consumers’ post-adoption behaviour towards Internet banking:
empirical evidence from Australia. Behaviour & Information Technology, 36(9), 970-983.
Bacina, M., & Kassra, S. (2017). Technology: Unlocking cryptocurrency token sales. LSJ: Law
Society of NSW Journal, (37), 79.
Blankenship, J. R. (2017). Forging Blockchains: Spatial Production and Political Economy of
Decentralized Cryptocurrency Code/Spaces (Doctoral dissertation, University of South Florida).
Chohan, U. W. (2017). Assessing the Differences in Bitcoin & Other Cryptocurrency Legality
Across National Jurisdictions.
Drozd, O., Lazur, Y., & Serbin, R. (2018). Theoretical and legal perspective on certain types of
legal liability in cryptocurrency relations. Baltic Journal of Economic Studies, 3(5), 221-228.
Gainsbury, S. M., & Blaszczynski, A. (2017). How blockchain and cryptocurrency technology
could revolutionize online gambling. Gaming Law Review, 21(7), 482-492.
Hughes, S. J., & Middlebrook, S. T. (2015). Advancing a Framework for Regulating
Cryptocurrency Payments Intermediaries. Yale J. on Reg., 32, 495.
Jackson, O. (2018). US or Swiss approach for EU crypto regulation?. International Financial
Law Review.
Kbilashvili, D. (2018). Influence of E-Commerce and Cryptocurrency on Purchasing Behavior of
Wine Customers. Global Journal of Management And Business Research.

ANZ GROUP: STRATEGIC ANALYSIS
Krafft, P. M., Della Penna, N., & Pentland, A. (2018). An Experimental Study of Cryptocurrency
Market Dynamics. arXiv preprint arXiv:1801.05831.
Motsi-Omoijiade, I. D. (2017). Financial Intermediation in Cryptocurrency Markets–Regulation,
Gaps and Bridges. In Handbook of Blockchain, Digital Finance, and Inclusion, Volume 1 (pp.
207-223).
Park, H. A. (2017). The Essential Principles for an Active Securities Regulation of
Cryptocurrency.
Thelwall, M. (2017). Can social news websites pay for content and curation? The SteemIt
cryptocurrency model. Journal of Information Science, 0165551517748290.
Zulhuda, S., & Binti Sayuti, A. (2017). Whither Policing Cryptocurrency in Malaysia?. IIUM
Law Journal, 25(2), 179-196.