Strategic Analysis of CBA: HI5019 Strategic Information Systems

This report presents a strategic analysis of the Commonwealth Bank of Australia (CBA), a leading multinational bank. Part 1 covers the business background, industry, and general environment analysis (political, social, economic, legal, environmental, and technological factors). It examines the industry environment using Porter's Five Forces (threat of new entrants, bargaining power of customers), competitive environment, and identifies key opportunities and threats. Part 2 focuses on tangible and intangible resources, capability identification, and proposes an information system solution, including its evaluation. The analysis uses examples from scholarly sources to support its arguments, providing a comprehensive overview of CBA's strategic position.

Running head: STRATEGIC INFORMATION SYSTEM
Strategic Information System
[Name of the Student]
[Name of the University]
[Author note]

1STRATEGIC INFORMATION SYSTEM
Table of Contents
Introduction:...................................................................................................................3
Part 1:.............................................................................................................................3
The Current organization structure:...........................................................................3
General Environmental Analysis:..............................................................................4
Political:.................................................................................................................4
Social factors:.........................................................................................................4
Economic factors:...................................................................................................5
Legal Factors..........................................................................................................6
Environmental Factors:..........................................................................................6
Technology:............................................................................................................7
The industry environment..........................................................................................8
Threat of New Entrants:.........................................................................................8
Bargaining power of the customers:......................................................................8
Competitive Environment:.........................................................................................8
Threats and Opportunities:.......................................................................................11
Opportunities:.......................................................................................................11
Threats:.................................................................................................................12
PART 2.........................................................................................................................12
Tangible and Intangible Resources:.........................................................................12
Capabilities identification........................................................................................13
Information System Solution...................................................................................14

2STRATEGIC INFORMATION SYSTEM
Evaluation of the proposed system..........................................................................14
References:...................................................................................................................15

3STRATEGIC INFORMATION SYSTEM
Introduction:
Commonwealth Bank of Australia is the organization which has been selected in
order to complete the report. The primary objective of the paper includes the presenting of an
in-depth analysis of the accounting packages which mainly includes the challenges that are
faced while using the accounting software. Accounting information system can be considered
to be a financial software which is customizable and is used by the business mainly for the
purpose recording, interpreting, processing and keeping a track of the financial data that are
listed along with the financial statements and the accounts (Commbank.com.au. 2019). Some
of the most commonly used financial statement includes the balance sheet, the cash flow
statement and the statement of income. Besides this another important factor is that the
businesses are capable of either purchasing the accounting software from the vendors or
might be associated with developing these internally. The accounting software which is
appropriate must be efficient, valuable and resources saving tool which would be responsible
for suiting the business needs and would also be easy to manage.
Part 1:
The Current organization structure:
The organization which has been selected for the analysis is the Commonwealth Bank
of Australia. This Bank is listed amongst the top four banks of Australia and is a public
limited company as per listed in the Australian Securities Exchange. Besides this
Commonwealth Bank of Australia is the largest multinational bank located in Australia and is
consisting of subsidiaries in many countries like U.K, USA, New Zealand, Fiji and Asia
(Hatton et al. 2017). The bank is responsible for offering financial services to the small
business owners as well as to personal clients. The organizational structure of the

4STRATEGIC INFORMATION SYSTEM
Commonwealth Bank of Australia can be considered to be vertically integrated and is
associated with working in the form of a network structure and the main leader of the entire
team is the CEO of the Bank.
General Environmental Analysis:
Political:
The political analysis mainly considers the deregulation along with the privatization
and this is one of the major reason which transformed the CBA into a peoples bank into a
private organization. This in turn is responsible for increasing the returns to its stakeholders
and managers who are free from any responsibility regarding the community. There exists
one major cleft in between the privatization and the traditional policies of the government.
Along with remarking this with immense ill will the Commonwealth bank, in conventional
area of the electorate, it also leads to discontinuity of the promises which are mostly explicit
(Hallikainen et al. 2017). The financial deregulations and the privatization of the
Commonwealth bank of Australia has been disastrous for the public of Australia. Same thing
has happened because of the financial deregulation. Banks have been associated with
embossing fees and charges at the time of entry of the financial deregulation and besides this
it also cut the services and have bee associated with the utilization of the collective power of
monopoly whenever it is needed. The latest correction did not know weather or not the
government of Australia guaranteed the deposits made in the bank. Other Major impact upon
the commonwealth bank is that they have started operating as saving banks by spinning off
their insurance along with the other activities.
Social factors:
The culture and the ways of doing anything in a society might be associated with
having a huge impact upon the culture of the organization existing in a particular

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environment. The beliefs that are shared along with the attitudes of the population are
associated with playing a very vital role in the way by which the marketers of the
Commonwealth Bank of Australia would be understanding the customers present in a
particular market. Besides this it also helps in the designing of the marketing messages for the
consumers of the banking industry. Banks are responsible for playing a very vital role in
assisting the societies and this is generally done by providing the societies with a financial
literacy program or by adding or collaborating the different organizations in a community
(Galliers and Leidner 2014). Employees are provided with an additional opportunity by
helping them in getting engaged with the different local communities which is initially
responsible for the promotion of the cultures all across the border communities. Besides this,
the providing of faster access to the various educational facilities for the indigenous youths as
well as for adults to get financial literacy is another important social factor. For all these
reasons there is a positive impact upon the commonwealth bank of Australia.
Economic factors:
The Capital Position of the Commonwealth Bank of Australia is seen to be neutral as
per the measurements conducted by the RAC and the standard ratio For this reason the Bank
has been associated with increasing the strength of its capital level under the Basel III
regulatory capital framework which would be having a much stronger impact upon the
neutral capital setting of the bank or would be responsible for bringing a better outcome on
the philosophies related to management of individual bank capitals.
There exist various kind of innovations which are responsible for the improvements of
the frontline customer interface of the commonwealth bank of Australia (Coviello and Tanev
2017). For this reason, they are associated with investing upon the technology which are
responsible for the simplification of the process and is responsible for driving the
productivity which is initially responsible for leading towards the operational efficiencies

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from the initiatives related to productivity which are responsible for bringing benefits and for
having a positive impact upon the expense base.
Legal Factors
Commonwealth bank of Australia has started an Open advice review program (OAR),
that was to be used by the customer of Commonwealth financial planning limited and
financial wisdom limited for the purpose of compensating regarding any kind of poor
financial advice. Some of the important Legal responsibility that the OAR of the CBA is
having includes the following:
 Negotiation with the independent parties as well as with the ICAs.
 Preparation and focusing upon the documentation of the customers.
For all these reasons the CBA has specialized team who are associated with the
assessment of the OAR and for this reason there exists the availability of checks as well as
balances for the purpose of enriching the rightfulness of the outcomes for the customers who
have been affected. This includes the Independent Customer Advocate or the ICA which is
group compromising of the three largest customary advocacy firms and they are mainly
selected by the customers for the purpose assessing them by making use of the scrutiny of
their assessment outcomes. Existence of the Independent review panel helps in surveying the
offers of the customers along with the estimations regarding the things where the customers
are unable to reach the agreement that has been signed with the CBA (Cassidy 2016). The
OAR program has been associated with putting forward a lot of challenges such as the
establishment of the services which are actually needed by the customers, providing of proper
definition of the scope and many more. These in turn has been associated with impacting the
time that is required for the preparation of assessment of individual customer cases in
program.

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Environmental Factors:
CBA is one of the largest organizations located in Australia consisting of direct as
well as indirect impacts upon the environment. So, it needs to be prevented and one of the
most important way by which this can be prevented is by attaining of the Carbon Reduction
Target. Another way of doing this is by supporting the group clients in their transition
towards the low carbon economy. These particular targets have been carried out by
replacement of the lighting which is efficient and by upgrading the hardware, air conditioning
and the ventilation or the HVAC system present in the retail as well as in the commercial
buildings (Appelbaum et al. 2017). For this reason, CBA has also been associated with
moving their offices from the inefficient buildings to the premises which are environmentally
efficient. This is having a huge impact upon the CBA and for this reason in the year of 2012
CBA won the sustainability award for built environment.
Technology:
CBA was the first bank of Australia that was responsible for providing settlements
and baking on a real-time basis and besides this the bank was also associated with providing
24-hour access to various banking services by making use of the EFTOS and the ATM or by
means of mobile banking (Ogiela 2015). This is one of the most famous online brokers which
is responsible for providing of facilities such as the Net bank and Comm Sec. Some of the
recent innovations of the recent innovation includes the caching for the Facebook and this
are:
 CBA is the first bank associated with providing social media banking so as to help the
customers experience a speedy and secure banking.
 Allowing the smart sign for the customers so as to manage the loan documents
electronically from anywhere and anytime.

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 The My Wealth is associated with allowing the investors in analyze and invest upon the
financial products once they login.
The industry environment
Threat of New Entrants:
The digitalized financial systems of CBA have been capable of reaching a certain
level of maturity and besides this the other existing bank of Australia are generally associated
with the utilization of different channels of entrants in order to capture the market shares.
Similarly, there are also other threats from the competitors that are located in other regions or
are domestic (Dwivedi et al. 2015). The usage of the technology by other competitors is
generally done in order to offer virtual or physical financials services to the Australian
financial market. This would generally be responsible for putting forward the various type of
challenges related to the growth of the organization however the CBA is a major incumbent
to the financial industry and is responsible for capturing most of the market shares.
Bargaining power of the customers:
The bargaining power that the Australian customers are having is considered to be
very high and is also responsible for bringing financial packages of similar kind along with
the competitive rates for the purpose of expanding the shares in the market that is entirely
concentrated (Laudon and Laudon 2015). The Australian market favours the bargaining by
the customers regarding the rate which is best and due to this reason, the bank also influences
the bargaining power of the customers in a dynamic way. This is done by making offers
which includes the providing of aggressive rate for the customers by means of dropping the
five-year fixed home loan rate and many more.

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Competitive Environment:
The major competitors of the Commonwealth Bank of Australia mainly include the
other major banks existing in Australia and this are namely the NAB Australia, ANZ
Australia, ASB Bank, Westpac Bank, Bank West, St. George Bank Australia and lastly the
Kiwi Bank New Zealand. Below is the figure which depicts the core competitors of the CBA.
Fig 1: Core competitors of Commonwealth Bank of Australia
Source: (Galliers and Leidner 2014)
The figure provided above has been associated with depicting the core as well as the
main competitors of CBA. From the figure it can be ensured that the Commonwealth bank of
Australia is the one which is associated with gaining the maximum number of shares. the
figure depicts the fact that almost 20% of the shares along with the clients are taken by the
Commonwealth Bank of Australia whereas the NAP is having only 16% and the ANZ is
having 13%.

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Fig 2: Graph showing the Margin of Commonwealth Bank shares
Source: (Galliers and Leidner 2014)
CBA has been associated with following various kind of strategies for the betterment
of the bank as well for their clients some of the strategies includes the following:
 Customer related strategies: This type of strategies is considered to be first and the
most important element that the bank must have. In cases if the customers stop
visiting the bank then there would be a drastic fall of the bank shares leading to the
closure of the bank.
 Technology related strategies: This is Another major component which the bank
should have and for this reason the bank must be associated with changing their
ideologies accordingly so as to get adopted with the technologies (Chiang et al. 2018).
 Productivity related strategies: Productivity related strategies are mainly focused upon
increasing the productivity of the organizations one such strategy is the keeping of

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records on a regular and annual basis regarding the productivity as well as the records
of the employees.
Strategies
Customer 40%
Technology 15%
Strength 15%
Productivity 30%
Strategies adopted by the Commonwealth Bank of Australia
Threats and Opportunities:
Opportunities:
Some of the major opportunities have been listed below:
 Implementation of the various innovative technologies into the core banking activities
would be associated with helping the bank by assisting them in increasing the quality of
the service along with increasing the reach of the organization.
 Different type of initiatives made by the commonwealth bank such as the OneCommbank
helps the organization in building up a relation with the customers which would be better
and is necessary in order to achieve a sustainable growth (Cassidy 2016).
 Long term growth can be initiated if the bank is associated with thinking about expanding
in other emerging markets like Asia and many more.