Strategic Analysis of ANZ Bank and the Impact of Cryptocurrency

This report provides a strategic analysis of ANZ Bank's approach to cryptocurrency, with a particular focus on Bitcoin. It begins with an introduction to ANZ and its strategic goals, followed by a discussion of the strategic background and the emergence of cryptocurrency. The report then delves into the strategic environment using PESTLE analysis, examining political, economic, social, technological, legal, and environmental factors. The competitive environment is assessed through Porter's Five Forces analysis, including the threat of new entrants, supplier power, buyer power, the threat of substitutes, and industry rivalry. The strategic analysis section examines Bitcoin's impact on the financial industry, the challenges it poses, and the solutions proposed. The report concludes by summarizing the key findings and implications of cryptocurrency for ANZ Bank and the broader financial landscape. The report also includes a table of trends of top cryptocurrencies and references.

Running Head: Strategic Management
Strategic Management
ANZ and Crypto currency

Strategic Management 1
Contents
Introduction.................................................................................................................................................2
Strategic Background...................................................................................................................................2
Strategic Environment.................................................................................................................................3
Competitive Environment............................................................................................................................4
Strategic Analysis.........................................................................................................................................5
Conclusion...................................................................................................................................................6
References...................................................................................................................................................8

Strategic Management 2
Introduction
ANZ is commonly known to be as Australia and New Zealand Group. It is also very well known
for being the fourth largest bank of Australia. This organization is very much into business where
retail is concerned and commercial banking too. ANZ currently operates in 32 markets all over
the world and even more and that is why it has been given the title of largest banking group. It
comes in the top 50 banks if the whole world is considered which is in itself a big title and honor
for ANZ group. The strategy of business for ANZ is to become the super regional bank. The
company involves more than 48,000 employees across the world. This organization wants to
grow in Asia Pacific region and also wants to source it’s approximately 30% of the earnings
from America division and Asia Pacific too (ANZ, 2018).
Strategic Background
Since the inception of the Crypto Currency, all the banks came into picture and people were
making good money with the help of these currencies. Crypto currency is one of the very talked
about digital asset which operates to work as the way of exchange with the use of cryptography
for secure transactions. These currencies use decentralized control in opposition to the
centralized electronic money and banking systems (Bhosale & Mavale, 2018). Decentralized
control of every type of crypto currency works via block chain which is a public open database
used for the transactions and other functioning. In case if a person is looking for the guaranteed
delivery of the funds transfer and also the assurance that the money will be delivered to the real
recipient only and also that the transaction would also not be tampered. This is a great deal.
Block chain was doing exactly this procedure for the crypto currency called Bitcoin. It is a
digital currency and can be held electronically. Absolutely no one can control it. These are non
printed production done by people and increases business with the use of software which solves
mathematical problems (Bech & Garratt, 2017).
There was a bad impact of central banking like the cause of destructive inflation currency,
decrease in the purchasing of the power and standard of living of the citizens, invisible tax for all

Strategic Management 3
the citizens for the help in the fund wars and social welfare programs etc were the causes.
Bitcoin could bring all the crashes down. In the year 2016, most of the people in the banking
firms and industry were dismissive of Bitcoin (Berentsen & Schär, 2018).
In 2015, ANZ wanted to figure Bitcoin out and they figured that Bitcoin was a threat to their
group and ANZ also though that it might become a nice opportunity for the bank. Nigel Dobson,
who is the General Manager of wholesale digital transformation of ANZ, was targeted by ANZ
group to figure all this out. Dobson in t he end was able to pull out each and every information
about Bitcoin and crypto currency on the whole. They had quite a number of proofs about the
whole concept (Durden, 2017). According to Dobson, the least good part of the transaction is the
settlement and reconciliation. Hence, he had proofs about the concept of the other banks and
organization about both these processes. However, the spokesperson of the ANZ said that they
do not prohibit customers buying digital currencies.
Strategic Environment
The strategic environment can be easily analyzed by doing the PESTLE analysis of any
organization. PESTLE for ANZ is as follows:
 Political Factors: Political factors always determine the extent to which the government
manipulates the economy or any kind of industry. For example: Government might
impose new tax policies or change any kind of norms and policies according to the
benefit of the people. New laws for the currencies which were digital and operating in
Australia were implemented by AUSTRAC (Australia’s intelligence agency and anti-
money laundering and counter-terrorism financing regulator). AUSTRAC increased the
opportunities for the sharing of the financial intelligence and data relating to the use of
digital currencies with its partners in industry. It was both positive and negative for ANZ.
Positive as it will fight crime of breaches of data and negative as these currencies had
taken the major part of the market (Austrac, 2018).
 Economic Factors: Economy factors determine the performance of the organization in
terms of the economy in long terms. Before the crypto currencies came in the market, the
transaction which was monetary was enabled via central banks. With the originating of

Strategic Management 4
Bitcoin, the scene is totally different. The power was finally shifted from banks to the
block chain. This helped the economy overall and ultimately ANZ was also affected by
this. With the digital currencies occurring, people can also challenge the power. It is also
believed that Bitcoin can lead to the politicization of money (Jain, 2017).
 Social Factors: Social environment is scrutinized of the market and the cultural trends,
demographics are determined. There are many people who are under banked in America.
They did not even know such terms. With the incoming of the crypto currency, they got
to know about such things. Social issues clearly states that that it is to encompass major
swath of legitimate concerns and most of such concerns are related to the Bitcoin but this
whole idea is somehow unrelated to social issues as they would rest upon contention
which concerns like access to credit and poverty etc.
 Technological Factors: This refers to the new innovations which might support or affect
the organizations in both ways. Crypto currencies do not need any platform to work upon.
It is a kind of code and software which gives the facility to transact without any service
and gives the guarantee too for being it delivered to the exact same person. Now this
affects the technology which is being used by the banks like ANZ (Rastogi & Trivedi,
2016).
 Legal Factors: This determines the environment of the business in the certain country
while there are policies which all the organization have to follow. There were laws
passed for the usage of the digital currencies in Australia which were given out by
AUSTRAC. Due to this, banks like ANZ were affected a lot (Blanc, 2016).
 Environmental Factors: These factors determine the environment factors which might
affect the company. Bitcoin is called virtual gold as it was created in the process which is
called mining. Real mining can be proved dirty. The joining of the mining code online
required high power in the consumption which is required by the computer. Hence, more
electricity is needed. It might lead to global warming (Gupta, 2013).
Competitive Environment
The competitive environment could be analyzed by studying the Porters five forces analysis of
the organization. They are as follows:

Strategic Management 5
 Threat of New Entrants: ANZ was already being threatened by the invention of the
crypto currency as due to these currencies especially Bitcoin, the banks had to face a lot
of trouble. They also had this threat of the crypto currencies being accepted by the other
competitors of ANZ group (DeVries, 2016).
 Powers of Suppliers: Many new organizations wanted to collaborate with the crypto
currencies and especially Bitcoin as it was the fastest growing currency till now. It was
fluctuating like anything and the market was going crazy with such fluctuations. The
power of the suppliers was high as the currencies were at a boom at the time. Hence, it
was a new threat to the ANZ group as it has so many competitors in the market (Ven,
2017).
 Power of Buyers: In the similar way, the power of the buyers was also a threat to the
ANZ group. ANZ initially was not very much into this digital currency process. Later
when Dobson found out about this, he was very fascinated with the idea. Later he
collaborated with the big companies and made collaborations in terms if the Bitcoin.
Hence, here the power of the buyers became low. For example: Wallet providers.
 Threat of Substitutes: New substitutes such as Bitcoin came into picture and since then t
he market went up and down like crazy. It was a very unpredictable currency and still is.
This absolutely worked as the new substitute for ANZ and ANZ had to keep up the pace
with the running economy as well as the market. Direct payment solutions and crypto
currencies were the substitute for the traditional banking systems and also FIAT
currencies (Gandal & Halaburda, 2014).
 Industry Rivalry: As all the above reason is mentioned, there sure could be rivalry in
between the two.
Strategic Analysis
Bitcoin is like any other crypto currency. It was founded in 2009 by a person with the usage of
the alliance of Satoshi Nakamoto. The transactions are being done with no third party or middle
man i.e. banks. This currency could be used for various purposes like Expedia, to book furniture
etc. It got so much hyped in the year 2016 – 2017 that the price of Bitcoin went high like a rocket
into thousands of Dollars in 2017.

Strategic Management 6
Internet commerce relies on exclusively financial institutions which serve as the third parties for
the processing of the electronic payment. The systems work mostly for the transactions but there
is a problem in the model. It has the weakness to avoid mediating disputes. Non reversible
transaction is not at all possible since the financial institutions cannot avoid mediating
disruptions. Hence the cost of mediation increases which limits the practical transaction size and
throws away the possibility for the small transactions. Electronic coin is known to be as digital
signatures (D’Alfonso et al., 2016).
Every owner transfers coin to next by digital sign giving the key to the next owner by adding
these to the end of coin. Payee can easily verify the signs to the chain of ownership. Problem lies
when the payee cannot verify that one of the owners did not double spend the coin. This is the
problem which lies in the case study of Bitcoin.
The recommendation and the solution of this problem is to develop a trusted central authority
that monitors each and every transaction for this double spending. When the transaction is done,
the coin should return to the authority for issuing the coin and the coins which are issues by the
authority are the only ones to be trusted and the rest should not. This is the type of the process
which is just like the bank in which the entire cost system depends upon the organization running
the authority as every amount has to go though them only. In this process, the payee is always
needed just for the verification that he did or did not sign the earlier transactions. The main
purpose is that the transactions which were done earlier were the ones to be counted upon and
later attempts are not be cared for to double spending. The person has to be totally alert of all the
transactions he did just to confirm the absence of the transaction. This mint based model given
the authority to be aware of the transactions and to decide which the first transaction was done.
For the accomplishment of the process without the trusted party, the transactions should be
announced publicly. And also there is a need of the system in which participants agree on the
single history of the order in which they had received the amount.

Strategic Management 7
Table of Trends of Top Crypto Currencies
Source: (Investing.com, 2018)
Conclusion
This report focuses on the Australian and New Zealand group with respect to the Crypto
currencies which came in the recent years in the market. The relationship in between the two is
also discussed with the discussion of the Pestle analysis and Porter’s analysis of the ANZ with
respect to the crypto currency especially Bitcoin. Though crypto currencies were helpful for the
people in many ways such as electronic transactions and digital currencies coming in the picture
of global market trends etc but the banks and the other organizations also faced some difficulties
due to these crypto currencies (Srokosz & Kopygciaeski, 2015). With the help of the Pestle and
Porter analysis, the discussion about how ANZ got affected by them is done. Lastly, the case
study “Bitcoin: A Peer-to-Peer Electronic Cash System” had some problems mentioned, they are
discussed and there are some recommendations also for the problem of double spending given.

Strategic Management 8
References
ANZ, 2018. About ANZ. [Online] Available at: http://shareholder.anz.com/our-company/profile
[Accessed 17 May 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 17 May 2018].
Bech, M. & Garratt, R., 2017. Central bank cryptocurrencies. [Online] Available at:
https://www.bis.org/publ/qtrpdf/r_qt1709f.pdf [Accessed 17 May 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 17
May 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 17 May 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 17 May 2018].
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].

Strategic Management 9
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].