University Assignment: Strategic Analysis of Westpac Bank Report

This report provides a comprehensive strategic analysis of Westpac Banking Corporation, one of Australia's four major banks. It examines Westpac's mission, vision, organizational culture, and objectives. The analysis utilizes PESTEL (Political, Economic, Social, Technological, Environmental, and Legal) analysis to assess the external environment, identifying factors influencing the bank's operations. SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis is employed to evaluate Westpac's internal capabilities and external challenges. Furthermore, the report applies Porter's Five Forces framework to understand the competitive dynamics within the banking industry. The analysis covers aspects such as the threat of new entrants, bargaining power of suppliers and buyers, and the threat of substitute products, and rivalry among existing competitors. The report concludes with a summary of key findings and strategic implications for Westpac's continued success in the Australian and New Zealand financial markets.

Running head: STRATEGIC ANALYSIS OF WESTPAC
Strategic Analysis of Westpac
Name of the Student
Name of the University
Author’s note

1STRATEGIC ANALYSIS OF WESTPAC
Executive Summary
Westpac Banking Corporation is the one of the four major bank located in Australia that
offers financial services all over Australia and New Zealand. They have a mission to provide
financial aid to the Australian dwellers so that they can raise their wealth. Their vision is to
gain leadership in the financial sector, for this reason, they always focus on customer
satisfaction and they always try to bring innovation in their branches. They focus on women
empowerment as well. They provide financial support to the females so that women of
Australia can establish their own business. The report has highlighted all these aspects. The
analysis tools like PESTEL analysis tool, SWOT analysis tool and Porter’s five forces
analysis tool have elaborate the factors by which Westpac can hold their position the market.
The analysis tools have showcased the various opportunities by which they can retain their
customer base. The threats, as well as the risks, have been detailed in the report which
Westpac must take into consideration and should mitigate. The analysis tools also illustrate
that Westpac always focuses on innovation to gain the competitive edge.

2STRATEGIC ANALYSIS OF WESTPAC
Table of Contents
Introduction................................................................................................................................2
Overview of the bank.................................................................................................................3
Mission.......................................................................................................................................3
Vision.........................................................................................................................................3
Organizational culture and leadership style...............................................................................3
Value Statement.....................................................................................................................3
Objectives and leaders’ contribution......................................................................................3
Analysis tools.............................................................................................................................4
General Environments (PESTEL) analysis............................................................................4
SWOT....................................................................................................................................6
M. Porter’s five force analysis...............................................................................................7
Conclusion..................................................................................................................................8
References..................................................................................................................................9

3STRATEGIC ANALYSIS OF WESTPAC
Introduction
Westpac Banking is an Australian bank and they are the expert financial services
provider based in Sydney, Australia. There are four major banks and Westpac Banking
Corporation is considered among the four. Westpac Banking has been chosen as the case
study for this report.
The analysis tool helps Westpac Banking to know their strength and weakness, the
analysis tools help them to know in which areas they should improve. SWOT, M. Porter’s
five force analysis, PESTEL analysis can help Westpac Banking to increase their market
share and productivity. These tools can give them the facilities by which they can gain a
competitive edge over banking or similar financial institutions. The report will showcase
SWOT, M. Porter’s five force analysis and PESTEL elaborately.
Overview of the bank
Westpac Banking Corporation based in Sydney, Australia is considered as one of the
four major banks of Australia. They have subsidiaries all over Australia and New Zealand.
They are known to provide customer oriented and institution oriented financial services
(Jackson, 2016). They have collaboration with numerous foreign banks. They secure the top
position in the foreign exchange among all the Australian banks.
Westpac Banking Corporation
(Source: Pomering, 2017, pp. 171-190)
Mission
Westpac’s mission is to assist the citizens of Australia so that they can raise their
wealth. Westpac is known to cater the best financial solutions. Peter Lee Associates along
with IRBSA has ranked Westpac much higher in domestic transaction banking (Pomering,
2017). Their mission has been appreciated all over Australia and New Zealand.
Vision
Westpac’s vision is to gain global leadership in the financial sector. They need to
focus much on expanding their market share. Though they are providing services all over
Australia and New Zealand, however, they need to open subsidiaries in other global regions
to meet their motto (Vincent, 2016). They need to open subsidiaries in United States,
European Nation and parts of the Asian subcontinent.

4STRATEGIC ANALYSIS OF WESTPAC
Organizational culture and leadership style
Value Statement
Westpac always focuses on the customer satisfaction; they always put effort so that
their customer base can turn into a loyal customer. They are optimistic towards the
organizational changes and they always try to bring in innovation (Jackson, 2016). This
approach helps them to enhance their work efficiency and return on investment. For all these
factors they are still leading.
Objectives and leaders’ contribution
The objective of Westpac is to build a strong customer relationship, maximize the
return on capital. They are also focusing on opening more and more subsidiaries for
customers' easy access to the bank's services. They are working on women upliftment as well.
The former CEO of Westpac worked heavily on women empowerment (Pomering, 2017).
There are many banks based in Australia which discriminates between men and women,
however, Westpac provides financial aid to the large female section so that they can develop
and run their own business.
Analysis tools
General Environments (PESTEL) analysis
The PESTEL analysis for the Westpac Banking focuses on the following aspects-
political, economic, social, technological, environmental and legal aspects.
PESTEL analysis
(Source: Goncharuk, 2016, pp.34-39)
Political
Focusing on the budget repair- The Government can prepare a budget that can create
an impact on the bank funding.

5STRATEGIC ANALYSIS OF WESTPAC
Foreign investment policy: The Government has implemented the ‘four pillars
policy’ for the banks (Indiatsy et al. 2014). The policy states that any four banks based in
Australia will have to compete with each other and they must challenge each other over the
attractive schemes.
Economic
Enhanced business activity: The enhanced business activity of Westpac Bank allows
investment growth and growth in deposits.
Social
Increasing the need for the people- Westpac Bank has given multiple facilities like
Self-Managed Super Funds to facilitate people of different ages (Wonglimpiyarat, 2014). The
Bank provides an online platform where people can open accounts.
The effect due to employment: The employees get sacked, in other cases, they leave
the job. This can be a threat to the Westpac Bank (Indiatsy et al. 2014). The people will
deposit less amount of money to the bank’s account resulting in loss of the bank.
Technological
Digitization of the services: The technological advancement has enhanced the
customer’s way of banking. The technological advancement helps the bank to provide the
service to the customers throughout day and night 24x7. The smart ATMs, as well as the
digital platform, facilitate the customers to conduct online banking more conveniently.
Westpac Banking provides a facility called the fingerprint sensor called Touch ID (Atoom,
Malkawi and Al Share, 2017). The employees with the assistance of Touch ID can be able to
log in securely.
Technology usage for implementing security: The data confidentiality and the
security of the employees and customers can get increased with the assistance of the
technology advancement.
Legal
Legal actions to restrict high exception fees: Westpac charges heavy for the
customers for late card payments. The bank also charges heavy if the consumer exceeds the
card limits. Westpac Bank also imposes penalties if any customer wants to pay to have
insufficient funds in their accounts.
Environmental
The bank considers the surrounding natural resources. The banking operations also
get affected due to the environmental deterioration and unethical accessing. The bank lent
about $8 B to the environmental service sector for the cleanliness (Goncharuk, 2016).
Westpac has taken initiative to maintain the carbon neutrality, they have also planned to
reduce the paper use and use the latest technology innovation to ease their financial activities.

6STRATEGIC ANALYSIS OF WESTPAC
SWOT
SWOT analysis
(Source: Wu, Song, and Kang, 2016)
Internal environmental analysis
Strengths
i. They have a comparatively large number of branches in Australia.
ii.Westpac Bank uses high-tech technologies and they focus on online transactions and
EFTPO. Besides, they have many ATMs installed all over Australia (Korableva and
Kalimullina, 2016).
iii.Westpac Bank is one of the major bank based in Australia. It is one of the most responsible
banks in the financial sector in Australia.
iv. They have placed female employees along with male employees, for this reason, they are
getting a respectable position in the employment world.
Weakness
i.Westpac Bank generally competes the rivals National Australia Bank, Commonwealth Bank
and Australia and New Zealand Banking Group (Alhassan and Ohene-Asare, 2016).
ii. The bank has relatively less number of branches in foreign countries.
External environment analysis
Opportunity
i. Westpac obtaining the license can expand the customer base and can open new branches in
the foreign countries.

7STRATEGIC ANALYSIS OF WESTPAC
ii. The technological advancement can help Westpac to gain the overall organizational
efficiency (Wu, Song, and Kang, 2016). The Westpac mobile app and the online banking can
give them the edge to stay connected with the customers and provide them 24x7 services.
Threats
i. The economy is the important aspect of the financial sector. The ups and downs of the
economy affect Westpac Bank, also if any critical changes occur in the economy of Australia,
Westpac gets affected.
ii. Changes in economies the countries can seriously affect Westpac. Also, the change in bank
regulations can seriously affect Westpac’s operations.
M. Porter’s five force analysis
M. Porter’s five force analysis
(Source:)
i. Threats of the New Entrants
The newcomers in the banks are performing new things; they are also bringing in
innovative approach (Rothaermel, 2015). In this way, the new banks and the financial
institutions are creating pressure on Westpac constantly.
Westpac Banking to tackle threats
Westpac can tackle those tasks by bringing in innovation in the bank premise. Their
services can bring in new customers (Eskandari et al., 2015). They can build the economy of
scale as that approach can save huge expenses. They should spend more on research and
development purpose.
ii. Bargaining power of suppliers

8STRATEGIC ANALYSIS OF WESTPAC
The Banks generally purchase raw materials from various suppliers. The suppliers can
demand higher prices, they can even demand higher bargaining power from the banks. This
can diminish the net profit of the banks.
Westpac Banking to manage bargaining power of the suppliers
Westpac Banking must build effective supply chain with the assistance of the multiple
suppliers instead of limiting to only one or two suppliers.
iii. Bargaining power of Buyers
The buyers demand many; they always seek to purchase the best thing at the lowest
price or the minimal price (Rothaermel, 2015). This kind of approach creates pressure on
Westpac Banking to earn a profit.
Westpac Banking to handle the bargaining power of the buyers
Westpac should focus on building a customer base; this approach can assist them in
lessening the bargaining power of buyers. The bank can enhance their production operations;
they can even streamline its sales.
iv. Threats of substitute products or the services
The industry profits suffer a lot due to the customer needs. The threats generally incur
if any substitute product or any substitute service offers services that are different from the
services what they offer (Eskandari et al., 2015).
Westpac Banking to handle the threats associated with the substitute products
They must focus on being service oriented instead of being product oriented.
v. Rivalry among the existing competitors
Westpac will have to compete with the four major banks based in Australia. To retain
the customer base, they have to avail multiple benefits to the customers (Rothaermel, 2015).
They will have to give discounts to customers, in this way they can stay ahead of all the
major four; also they can earn maximum profits.
Westpac Banking to keep stay in the competition
Westpac will have to build a sustainable differentiation and scale so that they can
compete with the other banks in the industry.
Conclusion
It can be concluded from the above discourse that the analysis tools can help Westpac
Bank to know the strength and the weakness. Westpac can be able to know the rivals, the
strength of the rivals. Westpac can even acknowledge the threats and the risks that can disrupt
the financial activities of the bank. The opportunities have been also stated which can give
them the edge to the bank to stay ahead of all other competitors. M Porter’s five forces
analysis have been conducted. The five factors- threats of the new entrants, bargaining power
of the suppliers, and bargaining power of buyers, threats of substitute products or the services
have been elaborated in details in the report as well. The report has detailed the SWOT

9STRATEGIC ANALYSIS OF WESTPAC
analysis of the Westpac Bank, the PESTEL analysis of Westpac Bank and M. Porter’s five
force analyses in the report.

10STRATEGIC ANALYSIS OF WESTPAC
References
Alhassan, A.L. and Ohene-Asare, K., 2016. Competition and bank efficiency in emerging
markets: empirical evidence from Ghana. African Journal of Economic and Management
Studies, 7(2), pp.268-288.
Atoom, R., Malkawi, E. and Al Share, B., 2017. Utilizing Australian Shareholders'
Association (ASA): Fifteen Top Financial Ratios to Evaluate Jordanian Banks'
Performance. Journal of Applied Finance and Banking, 7(1), p.119.
Eskandari, M.J., Miri, M., Gholami, S., Reza, H. and Nia, S., 2015. Factors Affecting The
Competitiveness of The Food Industry by Using Porter's Five Forces Model Case Study in
Hamadan Province, Iran. Journal of Asian Scientific Research, 5(4), pp.185-197.
Goncharuk, A.G., 2016. Banking Sector Challenges in Research. Journal of Applied
Management and Investments, 5(1), pp.34-39.
Indiatsy, C.M., Mwangi, M.S., Mandere, E.N., Bichanga, J.M. and George, G.E., 2014. The
Application of Porter’s Five Forces Model on Organization Performance: A Case of
Cooperative Bank of Kenya Ltd. European Journal of Business and Management, 6(16),
pp.75-85.
Jackson, S., 2016. No variance for filed orders: Hayes v Westpac Banking Corporation
[2015] QCA 260. Proctor, 36(2), pp.42-43.
Korableva, O.L.G.A. and Kalimullina, O.L.G.A., 2016. An innovative approach to strategic
risk management in banking: russian banks case study. WSEAS Transactions on Business and
Economics, 13(25), pp.269-82.
Pomering, A., 2017. Communicating CSR Through Corporate Image Advertising.
In Handbook of Integrated CSR Communication (pp. 171-190). Springer International
Publishing.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Vincent, J., 2016. Westpac Banking Corporation v Wittenberg (2016) 330 ALR
476. Brief, 43(11), p.21.
Wonglimpiyarat, J., 2014. Competition and challenges of mobile banking: A systematic
review of major bank models in the Thai banking industry. The Journal of High Technology
Management Research, 25(2), pp.123-131.
Wu, F., Song, D. and Kang, L.S., 2016. The Development of Commercial Bank E-Commerce
Finance’s SWOT Analysis. DEStech Transactions on Environment, Energy and Earth
Science, (peee).