Analysis of Business Strategies at Commonwealth Bank Australia

This report provides an analysis of Commonwealth Bank Australia's (CBA) business strategies, including its customer-focused approach, innovation strategy, simplified platform strategy, and efforts to deliver a simpler and better banking experience. It evaluates the effectiveness of these strategies, highlighting both successes and areas for improvement, such as addressing customer privacy concerns and managing increasing debts. The report concludes with recommendations for future business strategies that CBA should consider to achieve continued success in the target market, emphasizing the importance of aligning strategies with the company's vision and mission.

RUNNING HEAD: Business Strategy
Business Strategy
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Contents
Introduction......................................................................................................................................2
Business Strategy.............................................................................................................................2
Company Background.....................................................................................................................3
Current and Past Business Strategies...............................................................................................4
Critical Evaluation...........................................................................................................................6
Recommendation for Future Business Strategies............................................................................7
Conclusion.......................................................................................................................................8
References......................................................................................................................................10

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Introduction
The purpose of this report is to enlighten the reader about the background information of the
company Commonwealth bank and its past and future strategies as well. The report evaluates the
meaning of business strategy along with the background information of the company as well. It
future analyses the current and past strategies of Commonwealth Bank Australia initiated in the
market from last 5 years. The critical evaluation of the activities of the company defines the
actions taken by the organization that are favourable for the growth or not. Lastly, the report
evaluates the future business strategies that Commonwealth bank should utilize in order to
achieve success in the target market. A business strategy refers to a set of decision and actions
that are organized in the business process with an aim to help the business succeed in their
defined goals developed. The business strategy of an organization is formed by the management
that helps them in formulating actions, making decisions, allocating work etc. Commonwealth
Bank is an Australian multinational bank that operates its business across UK, New Zealand, the
United States and Asia. The Commonwealth Bank is the largest Australian listed organization on
Australian Securities Exchange. Further, more details about the report are discussed below:
Business Strategy
A business strategy refers to the strategy that helps an organization in reaching specific business
objective within time. A strategic plan succeeds because of the business strategy implemented by
the organization in the target market. So, it can be said that a business strategy is a working plan
of an organization that helps them to achieve its vision, prioritize objectives, compete
successfully and optimize the effective financial performance with the business model of the
company. An effective business strategy helps the company in gain competitive advantage in the
market and sustaining their position as well. Even if a business has well-qualified resource, then
also it will not achieve success if it does not have an adequate business strategy (Schlagwein,
Thorogood, and Willcocks 2014). Thus, it is very important for companies to make use of an
effective business strategy in order to compete and gain their position in the target market. The
business strategy formed should value the objectives of the company and align the business
model as well. Three basic business strategies present in the environment were proposed by

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Porter that are cost leadership, differentiation and focus. Under the cost leadership business
strategy, the companies focus on reducing the cost of their production. While in differentiation,
the companies focus on differentiating the products and services in the market than the
competitors. Lastly, the focus strategy emphasizes on a particular niche market and understand
the dynamics of that market in order to help the company to focus on one thing and succeed in
the target market (Dell'Atti, et. al., 2017).
Company Background
Commonwealth Bank Australia, commonly known as CBA or CommBank is an Australian
multinational bank. The bank provides a variety of financial services to the customers in the
market. These services include retail, institutional banking, business and insurance, fund
management, broking services, superannuation, and investment. The CommBank is the largest
bank present in Southern Hemisphere. The company was founded in the year 1911 by the
Australian government and it was fully privatized in the year 1996. Commonwealth Bank is a
part of the big four Australian banks along with NAB (National Australian Bank), ANZ and
Westpac. The bank was listed on ASX in the year 1991. CBA has headquartered Sydney and has
more than 1100 branches and 4300 ATMs in total. The company works with more than 51800
employees worldwide. The bank has been struck with various controversies like data loss of 20
million people, 2008 financial planning scandal etc. (Commbank 2018). The company is
working under the leadership of Matt Comyn (CEO and MD). CommBank is Australia’s largest
retail bank that offers a wide range of products and services to the customers including credit
card, savings account, loans and transaction services (Commbank 2017). The bank has the
largest branch and ATM network as well. It also offers various help and services to people who
are aiming to move into Australia. The bank provides its internet banking services through
NetBank. The NetBank allows the customers to manage their account, transfer funds, and
manage to save, saving goals and access assets and liabilities as well. The ban also provides its
mobile application to iOS and Android users. CBA has its subsidiaries in Australia that are
named as Commulnsure, Colonial First State, Commonwealth Securities and Bankwest. In New
Zealand, the subsidiaries are called ASB and in Asia-Pacific, they are called AMTD Group
Company Limited (Hong Kong), Colonial National Bank (Fiji) and PT Bank Commonwealth
(Indonesia) (Chanthadavong 2014).

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Current and Past Business Strategies
Before understanding the business strategy of the Commonwealth Bank, it is very important to
understand the vision and mission for which the company initiated such strategies in the target
market. The vision of the bank is to excel in securing and influencing the financial wellbeing of
communities, people and businesses. The company aims to initiate a customer-focused strategy
culture and strategies as well. Further, the mission of the Commonwealth Bank is to collaborate,
integrate and provide such services to the customers that improve the process of working and
satisfies them as well (Bonin 2016). Further, below mentioned are the business strategies used by
the company Commonwealth Bank:
Customer Focused Long-term Strategy
The company aims to strategize create long-term values for the customers, shareholders and
people. The long-term business strategy of the company aims to fulfil the vision of the
organization and excel in the target market as well. The company explains that keeping the
interest of customers is their strategic priority. They serve and satisfy the customers so that they
can continue to turn at the bank as a choice (John 2018). The company attained total assets of
more than $976 billion so that they can provide liquidity and financial stability to the customers.
Further, the company also aims to initiate actions so as to provide convenience to the customers
and provide various self-service options as well. The company made #1 free financial app to
assist the customers with their banking actions. The data shows that there are 30 million logons
in a week and 6.2 million active online customers (Weill, and Woerner 2015).
Innovation Strategy
In the year 2017, the company launched a program naming Unlocking Everyday Innovation.
This business strategy helped the company to introduce high tech innovation in the business and
succeed as well. With the help of this type of strategy, the company faced a dramatic shift in the
ways in which business deals in the market. Under this process of innovation, the company
analysed various factors affecting innovation and then helped the communities to innovate as
well. In this way, the company helped the customers to gain a higher level of satisfaction and
succeed in their mission as well. The Commbank helped the businesses to attain a higher level of
revenue growth using different aspects of innovation in their business (Commbank 2018). Thus,

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it can be said that the innovation business strategy helped the company to fulfil their vision and
mission as well. The benefits realized to the bank through innovation strategy are market
positioning, efficiencies and productivity, competitive advantage, stakeholder engagement and
staff engagement as well (Shapiro 2018).
Delivering Simpler and Better Bank
In the past few years, the bank also aimed to undergo various transformations so as to deliver
simpler and better bank to the customers. The company believes that their real competitive
advantage lays in their strategy to gain leadership in digital banking. With the help of this
process, the bank aimed to increase the engagement of customers in the business (Cameron, N
2017). Further, the CEO of the company explained that their aim to simplify the bank included
the actions like making the strategic choice, proceeding in future directions, accelerating
leadership in Australian and New Zealand's commercial and retail banking business. Under the
part of this aim, the company strategized to demerge the wealth management and banking
operations in the year 2019. Along with the strategic review of general insurance business
Commlnsure (Pash 2018).
Simplified Platform Strategy
The company aims to remove duplication by converting its platform strategy into IT
infrastructure strategy. After completing the transformation of core banking infrastructure, CBA
aimed to drive platform-based strategy to simplify the current process and eliminate the
unrewarded complexities as well. The company created a multi-level platform that they can
eliminate other stages and induce all the work in a single one. As the company wants to fulfil the
demand of all the customers, resulting in which, they initiated strategies to simplify the process
and include all the requirements under one app only (Australian Associated Press 2018).
Thus, it can be said that the above mentioned are the business strategies of the company that
were specifically designed to help the organization to complete its goals and objectives.
Strategies are one that is specifically designed to fulfil certain objectives of the company. In
response to which the organization defined certain goals for which the initiated strategies in the
environment (Letts 2017).

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Critical Evaluation
Looking at the business strategies implemented by the company Commonwealth Bank it should
be noted that the bank worked in an efficient way to attain the objectives in the environment.
Throughout the past years, the only objective of the company Commonwealth Bank was to attain
success in such a way that they increase the customer engagement in the activities of the
company and propose a simpler way for people manage their banking activities. Adding to it, the
company also significant initiated business strategies in a way so as to develop the application
platform, assist people in organizing activities, delivering services in a better way and focusing
on customer satisfaction. These all activities shows that are the company adequately understood
the meaning of business strategy and initiated all the functions in a positive way. In response to
the business strategy, the CBA also implemented various actions that helped them to succeed in
the target market (Farrer 2018). The company organized a Financial Inclusion Action Plan that
helped them to strategically attain their objectives in the target market. The program helped in
satisfying the interest level of the customers in the market. With the help of this program, CBA
increased the economic participation and status in the market, diversity and awareness of cultures
and improvement in products and services as well. The company also reinvigorated in sales
programs with an aim to increase the satisfaction level of the customers. However, critically
reviewing the above-mentioned statements, the fact should be noted that the company lacked in
achieving various aspects as well (Commbank 2018).
Privacy of the customers can be seen as one of the major aspects that the company needs to look
after in the target market. A recent case has been reviewed that explains that the company has
given threat to 20 million application users for privacy breach (Hendy 2018). So, it can be seen
that although the programs are becoming efficient the bank is losing its grip on the privacy of the
customer. Also, the company is facing the problem of increasing debts in the market that is
affecting the ratings of the bank as well. Fitch credit rating agency marked the bank as negative
due to which the company faced difficulty in attracting new customers in the market. Thus, it can
be seen that although the company is implementing great business strategies still there is a large
scope for the bank to succeed in the market. The business strategies can help them to eliminate
the earlier issues attracted with the company (Klettner, Clarke, and Boersma 2014).

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Recommendation for Future Business Strategies
Privacy Measures
Looking at the scandalous events, it can be seen that the company Commonwealth Bank is facing
severe problems in managing the privacy of customers of the company. One of the current issues
also attracted the company in fake banking app scam. So, the company should initiate customer
privacy protection business strategies in the environment (Sia, Soh, and Weill 2016). The
strategies should provide a confirmation to the customers using the baking application of
Commonwealth Bank that they should aim to not leak any price sensitive information of the
company. The company should also fix the application along with the internal structure of the
company. If there is a fault in the business activities then it can be clearly seen that the
management is lacking behind somewhere (Commbank 2018). So, the organization should
implement a strategy that keeps the personal information of the client restricted. This is the first
and the foremost business strategy that the company is initiated in the market. It can be seen that
privacy is one of the most important aspects that a customer requires from the organization and
they cannot levy this requirement anyhow. So, if the bank will also take care of the interest of the
customers and their privacy then the company will not fail in satisfying the expectation of the
customers (Reynolds, and Yetton 2015).
System Enhancement
One of the recent news also stated that the company is facing a system failure problem that is
increasing the dissatisfaction level of the customers in the market. In the past business strategies
of the company, it was known that the company is aiming to set up more smart ATMs around the
city but what if these ATMs are no working efficiently in the environment. Setting up the new
plant is a waste of use if the earlier plants are not working efficiently and delivering services to
the customers. So, before planning to set up a new plant, the company to organize the business
strategy to rectify the coding error and other several issues attracted with the systems of the
company. System failure can also be looked like one of the major reason due to which the
company is a privacy issue with the customers in the current environment (Charles,
Schmidheiny, and Watts 2017).
Surviving Profits

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As the company is attaining negative ratings in the current environment so they should also
initiate the business strategy that detracts penalties and attract profits in the current environment.
Profits for an organization can be attained only if the management is working effectively for the
purpose of helping the customers of the company. However, the company is somehow lacking in
attaining such objectives in the market. The company is formulating an ERP system that should
assist all the internal actions of the company. Although the company is already working with an
effective ERP system in the market but somehow the services are not effectively delivered to the
customers. So, the company should modernize the ERP system that should effectively organize
the activities of the company (Yip, and Bocken 2018). The ERP system should offer various
services to the employees of the company. The most important aspect that the company should
look after in this case is that the management should ask the IT team to modernize the ERP
system in such a way that the system is protected from hackers. With the help of this process, the
bank will organize various strategies that will initiate the internal as well as the external process
of the company.
Transparency and Ethical Activities
Transparency can be seen as one of the most important aspects for the stakeholders of the
company. So, it should be noted that in order to comply with the goals and vision of the
Commonwealth Bank, the management is to initiate transparency and ethical activities in the
environment. This will increase the stakeholder engagement in the organization help the
company to increase their market image as well (Bughin, and Van Zeebroeck 2017).
Conclusion
Thus, in the limelight of the above-mentioned events, the fact should be noted that the above-
mentioned report evaluated the actions of the company Commonwealth Bank. Commonwealth
Bank is a part of Australian Big Four Banks. The report evaluated that the company performed
various good deeds in the environment in the past 5 years. However, they faced failure in various
aspects as well. Considering all the activities initiated by the company, their objectives and
drawbacks, few recommendations for next years are defined in the report. The company should
follow these business strategies in order to attain customer satisfaction in the market that is the
primary aim of the company. The above-mentioned report also evaluated a critical review of the

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activities of the company that helped in analysing the aspects where the company is lacking
behind. The report adequately complies with the requirements of the assessment.

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References
Australian Associated Press 2018, Commonwealth Bank downgraded by rating agency amid
concerns over management,
https://www.theguardian.com/australia-news/2018/may/07/commonwealth-banks-long-term-
debt-default-risk-downgraded-by-fitch
Bonin, JP, 2016, From reputation amidst uncertainty to commitment under stress: More than a
decade of foreign-owned banking in transition economies. In Global Banking Crises and
Emerging Markets (pp. 22-51). Palgrave Macmillan, London.
Bughin, J, & Van Zeebroeck, N 2017, The best response to digital disruption. MIT Sloan
Management Review, vol. 58, no. 4, pp.80-86.
Cameron, N 2017, CBA's Vittoria Shortt: Marketing needs to stay focused on long-term
customer truths, https://www.cmo.com.au/article/626419/cba-vittoria-shortt-marketing-needs-
stay-focused-long-term-customer-truths/
Chanthadavong, A 2014, Commonwealth Bank to roll out simplified platform strategy
https://www.zdnet.com/article/commonwealth-bank-to-roll-out-simplified-platform-strategy/
Charles Jr, OH, Schmidheiny, S, & Watts, P 2017, Walking the talk: The business case for
sustainable development. UK: Routledge.
Commbank 2017, Annual Report,
https://www.commbank.com.au/content/dam/commbank/about-us/shareholders/pdfs/annual-
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Commbank 2018, CommBank Business Insights,
https://www.commbank.com.au/content/dam/commbank/assets/business/can/move-forward/
commbank-business-insights-national-report-fy18.pdf>
Commbank 2018, CommBank Business Insights,
https://www.commbank.com.au/business/business-insights.html

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Commbank 2018, Commonwealth Bank Strategy,
https://www.commbank.com.au/about-us/shareholders/pdfs/2006-asx/20060809-
Commonwealth-Bank-Strategy.pdf
Commbank 2018, Our Strategy,
https://www.commbank.com.au/content/commbank-neo/2014shareholderreview/strategy.html
Dell'Atti, S, Trotta, A, Iannuzzi, AP, and Demaria, F 2017, Corporate social responsibility
engagement as a determinant of bank reputation: An empirical analysis. Corporate Social
Responsibility and Environmental Management, vol. 24, no. 6, pp.589-605.
Farrer, M 2018, Commonwealth Bank profit falls amid money-laundering scandal,
https://www.theguardian.com/australia-news/2018/feb/07/commonwealth-bank-profit-falls-
amid-money-laundering-scandal
Hendy, N 2018, CBA and ANZ caught in fake banking apps scam [online]. Available from:
https://www.smh.com.au/money/banking/cba-and-anz-caught-in-fake-banking-apps-scam-
20180919-p504si.html
John, D 2018, Strategy To Build A Simpler, Better Bank,
https://www.commbank.com.au/guidance/newsroom/cba-fy18-results-strategy-201808.html
Klettner, A, Clarke, T. & Boersma, M 2014, The governance of corporate sustainability:
Empirical insights into the development, leadership and implementation of responsible business
strategy. Journal of Business Ethics, vol. 122, no. 1, pp.145-165.
Letts, S 2017, Commonwealth Bank's ongoing systemic failures: But wait there's more,
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Pash, C 2018, In one slide, here's Matt Comyn's strategy for the Commonwealth Bank,
https://www.businessinsider.com.au/matt-comyn-strategy-cba-commonwealth-bank-2018-8
Reynolds, P, & Yetton, P 2015, Aligning business and IT strategies in multi-business
organizations. Journal of Information Technology, vol. 30, no. 2, pp.101-118.