Westpac Bank: Strategic Management and Environmental Analysis Report

This report provides a comprehensive strategic management and environmental analysis of Westpac Bank, Australia. It examines the internal factors, such as cyber security threats due to increased digital technology and exchange rate fluctuations, and external factors, including the threat of new entrants and legal amendments, that impact the bank's operations. The report identifies major challenges faced by Westpac, including information security, digital product and service transformation, and customer satisfaction. It suggests strategic approaches to tackle these challenges, emphasizing product differentiation and expansion strategies. The analysis concludes that customer satisfaction and data security are crucial for Westpac's success in a competitive financial environment. The report is a valuable resource for students seeking insights into strategic management within the banking sector.

RUNNING HEAD: Strategic Management And Environment Analysis
westpac bank, australia
Strategic Management And Environment Analysis

Strategic Management And Environment Analysis
Executive summary
Internal and external factors affect the operations, goals and development of the organisation.
This report analyse the detailed effect of the customer and the technology and the competitors
and governing affecting factor at the Westpac back dealing in the finance. This report will
discuss the role of digital technologies in the factors affecting and creating opportunities to
develop the new possibility to gain the profit.
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Strategic Management And Environment Analysis
Contents
Introduction................................................................................................................................3
Background of the firm..............................................................................................................3
Internal factors affecting the firm..............................................................................................3
Increasing threat of cyber security due to increased digital technology................................4
Exchange rates........................................................................................................................4
External factors affecting the firm.............................................................................................4
Threat of new entrants............................................................................................................5
Legal amendments..................................................................................................................5
Major challenges in front of Westpac banks..............................................................................5
Information security and data privacy....................................................................................6
Digital product and service transformation............................................................................6
Customer satisfaction and experience....................................................................................6
Suggested approach to tackle the challenges.............................................................................6
Conclusion..................................................................................................................................7
References..................................................................................................................................8
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Strategic Management And Environment Analysis
Introduction
Banks are placed on the central position in the financial system contribute approximately
10% of the world’s total capital market and financial system. The challenges in the financial
sectors are as high as the profit they gain, the day to day monetary operation make the
financial and banking sector most challenging. These challenges are present in the both
internal and external environment of the banking organisations (Adeoye & Elegunde 2012).
Background of the firm
Westpac bank was founded in 1817 in Sydney, it is headquartered in Sydney. It is one of the
most profitable banks of Australia. Service segments of Westpac bank are divided into two
segments that are based on the consumer and institution based. Banks not only consist the
monetary term but also it deals with the marketing, human resources management, strategic
planning and managing information systems (Westpac 2019).
Internal factors affecting the firm
Internal environment of a bank involve a great numbers of the tasks with the management of
the different department and the employees involves in different sectors of the organisation
(westpac 2019). Internal factors normally deals those terms affecting the internal operations
and management in the banking sector.
Increasing threat of cyber security due to increased digital technology
Financial sector is very affected with the developing technologies because competitors use
the new innovation and techniques to attract the customers. This new changes make the
internal environment most challenging for the staff and management. This is enjoying high
reputation position in Australian financial sector and raked on the second highest position in
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Strategic Management And Environment Analysis
finance and banking in New Zealand. This needs the effective training to the employees to
make them able to understand the use of new changes and development in the market.
Continuous change in the technology give big target to the managers to keep updated and
informed about the strategic changes of the leading competitors (Adler, Pittz & Meredith
2016).
Exchange rates
Nature of consumer is keep changing based on the new emerging offers from the other
leading banks. A consumer wants a proposal giving the high return in the minimum time.
Focusing this varied behaviour of consumers banks keep changing their rates of interest and
exchange rates according to the demand and suitability of the market. Variation in the
services attracts the major customers. Exchange rates are the basic rates that keep fluctuate in
the market. These changes in the rates affect the internal financial environment of the bank in
long run basis. Fluctuation in the exchange rates demands high skills and abilities to keep the
sales updated and managed in the competitive environment (Andriof 2017).
External factors affecting the firm
External factors not only affect the reputation of the bank in the market but also result in the
changes in the internal management system the entire focus if the financing firm is to deliver
the best service in the low rate while maintaining the high returns on the balance sheet of the
firm itself. (Roy 2019).
Threat of new entrants
There is no day pass when markets face no threat of new entrants in the market. The policy of
cut throat competition avails in the business and market. The Westpac bank as dealing with
the pre-existing threat challenges from the other leading banks but it also face day to day
challenges ad threats of the new entering firm focusing to provide more suitable and
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developed product to attract the high profitable customers. Corporate customer dealing their
day to day transections with the help of the baking facilities is most targeted section to earn
the profit. Increased level of competition makes the managing directors to focus the new
trends. Hence the sector of banking is very secure and profitable if the entering firm have
proper strategy and it lead the cut throat competition for the Westpac to deal the business
(Cardwell 2017).
Legal amendments
A firm dealing in the financial and banking sector is not free to make the changes and
amendments in the policies as they want but a country’s economy directly get affected by the
financial decisions of the banks hence the legal and governing bodies of a country keep
control over the actions and works of the financial firms. Hence any changes introduced in
the law related to banks and financial terms and conditions. These terms of organisation
changes affects the overall functions and operations of the financial organisations (Awan &
Hafiz 2016).
Major challenges in front of Westpac banks
As discussed in the sustainability report of 2018 the most challenging issues selected by the
managers of the Westpac bank are related to their stakeholders’ interest and development.
Information security and data privacy
The whole world is using the digital platform to record the over-all process of the banks. This
digital innovation has made the storage of large consumer data easier to store and manage.
But the risk of cyber threat us increasingly giving challenge to the bank because these risk try
to misuse the collected data about the customers and financial data of banks (Krstić 2016).
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Digital product and service transformation
New emerging trends of digitalisation are offering opportunities to the competitors to
increase the level of external risk to keep the better offer delivery by the competitors. Service
quality delivered to the customer need to meet the level of present technology and trends (Lu
2019).
Customer satisfaction and experience
All operations of an organisation revolve around the customer satisfaction and outcomes. The
banking sectors mostly relay on the money taken as the services from the customer hence
they face major challenges to maintain the trust and faith of their regular and new customers
(Gupta 2013).
Suggested approach to tackle the challenges
Westpac is already maintain the financial reputation in the financial sector of Australia and
New Zealand hence it need to plan the strategies focusing the reduction of the competition
and challenges to make the position constant (Helmes & Nixon 2010).
 It can use the product differentiation strategy to deal the delivery of better and
challenging services as compared to the competitions’ products and services.
 It can use the strategy to spread the level of its working area in form of spreading its
branches in the different places. The new spread of the braces will result in the increased
customer and the financial return (Perera 2017).
Conclusion
This report concludes the effect of both factors of the environment create challenges for the
management and directors of the organisation. The impact of internal factors in the Westpac
banks lead the major effects in the delivery of the services and the effect of digitalisation
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effect the customer satisfaction. This report concludes the customers are the main stakeholder
for the Westpac bank to satisfy and it focuses to develop the strategies securing the data and
personal information of the customers.
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References
Adeoye, O & Elegunde, A 2012, 'Impacts of External Business Environment on', British
Journal of Arts and Social Sciences, vol 6, no. 2.
Adler, TR, Pittz, TG & Meredith, J 2016, 'An analysis of risk sharing in strategic R&D and
new product development projects', International Journal of Project Management, vol 34, no.
6, pp. 914-922.
Andriof, J,&WS 2017, 'Unfolding stakeholder engagement.', Unfolding stakeholder thinking,
pp. 19-42.
Awan, AG & Hafiz, MF 2016, 'Talent management practices and their impact on job
satisfaction of employees: A case study of banking sector in Pakistan', Science International
Lahore, vol 28, no. 2, pp. 1949-1955.
Cardwell, LA,WS,&PA 2017, 'Corporate public relations dynamics: Internal vs. external
stakeholders and the role of the practitioner', Public Relations Review, pp. 152-162.
Gupta, A 2013, 'Environment & PEST analysis: an approach to the external business
environment.', International Journal of Modern Social Sciences , vol 2, no. 1, pp. 34-43.
Helmes, MM & Nixon, J 2010, 'Exploring SWOT analysis–where are we now? A review of
academic research from the last decade', ournal of strategy and management, vol 3, no. 3, pp.
215-251.
Krstić, NADT 2016, 'Digital disruption of the banking industry: Threat or opportunity?',
Bankarstvo, vol 45, no. 2, pp. 12-33.
Lu, YF,GC,HB,TMYACDA, 2019, 'Bank efficiency in New Zealand: a stochastic frontier
approach', New Zealand Economic Papers, vol 4, no. 53, pp. 166-183.
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Perera, R 2017, The PESTLE analysis, Nerdynaut.
Roy, M 2019, Satisfaction with banks improving, viewed 1 september 2019,
<http://www.roymorgan.com/findings/7863-bank-satisfaction-december-2018-
201901310415>.
westpac 2019, Our strategy and vision, viewed 2 September 2109,
<https://www.westpac.com.au/about-westpac/westpac-group/company-overview/our-
strategy-vision/>.
Westpac, H 2019, www.westpac.com.au, viewed 3 September 2019,
<https://www.westpac.com.au>.
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