Westpac Bank: Strategies, Criticisms, and Environmental Analysis

This report provides a detailed strategic analysis of the Westpac Banking Corporation, an Australian bank, examining its internal and external environments. It explores the bank's mission, vision, core competencies, and growth strategies, including successful past strategies like the "squashed tomato policy" and current client-driven approaches. The report also delves into criticisms and controversies faced by Westpac, such as the cancellation of funds to the Adani group and allegations of overcharging customers for life insurance premiums. Furthermore, it conducts PESTEL, SWOT, and Porter's Five Forces analyses to assess the bank's environmental factors, strengths, weaknesses, opportunities, and threats, offering a comprehensive overview of Westpac's operations and challenges.

Running head: WESTPAC
WESTPAC
Name of the Student
Name of the University
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EXECUTIVE SUMMARY
In this, paper detailed strategic analysis of Australian bank Westpac also known as the
Westpac banking corporation will be done, along with external and internal environmental
analysis of the company. Two main criticisms that have damaged the company’s reputation
and goodwill will also be discussed along the course. In conclusion it will be found that
though the bank is doing well and growing its customer base but it should take care of the
weaknesses to avoid any unforeseen damage.

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Table of Contents
DISCUSSION............................................................................................................................3
STRATEGIES OF THE COMPANY AND ITS GROWTH.................................................3
SUCCESSFUL PAST STRATEGY AND PRESENT SITUATION................................5
CRITICISM OF PAST BUSINESS POLICIES....................................................................7
ENVIRONMENTAL ANALYSIS OF THE COMPANY....................................................9
PESTEL ANALYSIS.........................................................................................................9
SWOT ANALYSIS..........................................................................................................10
PORTER’S FIVE FORCE ANALYSIS..........................................................................10
CONCLUSION........................................................................................................................12

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INTRODUCTION
Westpac is a famous bank in Australia which also provides other financial services
and officially known as “Westpac Banking Corporation”. It has its official headquarters’ in
Westpac, Sydney (Westpac.com.au 2018). The bank is one of the largest in Australia and in
terms of branch has the largest network. It has about 1500 branches all over the country
(Westpac.com.au 2018).
An organisation develops and grows with time depending on the strategies it adopts.
Many of such strategies are successful and add to the productivity and growth of the
company and some strategies backfire (Houqe, Kerr and Monem 2015). Sometimes a
company adopts practices, which are criticised. In the following paper there will be three
parts analysis of the Westpac Banking Corporation, Australia. In the first part, a strategic
analysis of the bank and its growth will be tracked over time. The strategy analysis will
include corporate and business strategy alike. In the second part, there will be description of
two business practices of the company that have been criticised and their outcome. In the last
part, the paper will aim to do an environmental and SWOT analysis of the company. Apart
from that, the leadership and culture within the organisation will be discussed in details.
DISCUSSION
STRATEGIES OF THE COMPANY AND ITS GROWTH
MISSION VISION AND CORE COMPETENCE
Australia is one of the financially stable and advanced countries in the world
contributing more than 10% to the world economic scenario (Hatfield-Dodds 2015).
Australian banking sector has been a field of close competition among four main players the
“National Australia Bank”, the “Australia and New Zealand Banking Group”, the

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“Commonwealth Bank of Australia”, and the “Westpac Banking Corporation” (Sheedy
2016). “Bank of New South Wales” was the pioneer in banking service of Australia. The
“Commercial Bank of Australia” and the “Bank of New South Wales” merged together in the
year 1982 and the merger caused “Westpac Banking Corporation”. Financial service provided
by Westpac is highly divided having a variety. Financial services of the institute include
banking, insurance, investments, and superannuation funds. Westpac has two major windows
of providing financial services, the individual oriented and the institution oriented (Liu 2015).
The mission statement of the company states that it aims at increasing the wealth of the
society. The mission statement intersects with the strategies that the company has adopted
which includes giving high interest return to the investors and depositors (Westpac.com.au
2018). There is a high Return On Investment or ROI in Westpac. It has the only account
system that doesn't charge abroad ATM expenses within their worldwide system. The bank
has strategized to provide one of the highest interest rates in the Australian market to increase
its clientele. In term deposit plan, the rates have been kept 2.50% P.A (Westpac.com.au
2018).
The vision statement of the company is to attain leadership in financial sector in
global level. The organisation is very successful in the Asia Pacific region. The bank has
expanded itself beyond Australia and now works with New Zealand and a few other Asia
Pacific nations. With recent acquisitions of smaller financial institutes the banking operations
has expanded to Cook Islands, Tonga, Solomon Islands, Samoa and other nearby countries.
However, if the bank has to really become a global player it needs to work towards
expanding in financially stable and progressive nations in the western part of the globe.
The core competency of the bank lies in its financial services and competency it poses
to its closes competitors. The bank has been continuously endeavouring in developing the
standards and grades of the nature of capital it possesses. The financial services of this brand

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is customised and crafted according to its customer needs and caters to the requirement of
each customers (Westpac.com.au 2018). The bank also targets to increase the number of
products it provides per customer.
SUCCESSFUL PAST STRATEGY AND PRESENT SITUATION
One of the very successful strategies that were adopted by the company is the
squashed tomato policy. The bank used a squashed tomato symbol on the report of its
stakeholder’s impact, which explains the bank’s “fresh” undertaking to the stakeholder and
consumer relation. They committed to respond to criticism from the concerned community to
determine the processes of Westpac regarding the concerns of the stakeholders. This strategy
was aimed at both increasing the customer-organisation understanding and increasing the
sustainability of the company. The company has a high degree of commitment to
environmental sustainability in its corporate social responsibilities as well. Sustainability is
very important in increasing company goodwill (Schaltegger, Hansen and Lüdeke-Freund
2016). In three stages Westpac aimed at achieving the two targets of increasing consumer and
stakeholder bond on one hand, and increasing its commitment towards environmental
sustainability at the other hand. The first stage was to increase stakeholder and consumer
engagement, second was to achieve more transparency in reporting its financial status, and
the third was to commit to continue and increase research and experimentation towards
environmental sustainability (Dell'Atti et al. 2017). This strategy proved very useful for the
organisation in increasing its consumer trust, engagement, and good will. The more the
Corporate Social Responsibility activities of a company, the more goodwill it creates in the
company (Pomering 2017).
The current strategies of the company includes the enhancement and increment of the
funding flow, increasing the capital of the company and making the customer deposits
increase in number.

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The client driven techniques concentrates on clients in markets of Australia, New
Zealand and the close Pacific locale and depends on, building up a profound comprehension
of our clients' needs; offering some incentive added arrangements that look to address these
issues; developing and building long haul client connections; and significantly enhancing the
experience they have with the bank.
In the horizontal front, the company has regularly invested in assets related to the
same business it is operating in. It has increased its infrastructure in banking services with
ever-increasing number of branches and ATMs. The bank currently has near about 4000
ATMs operating. In case of vertical growth which includes increasing the number and variety
of services available. It is an official declared strategy of the company to include new
financial services.
The organisation has collaborated with various organisations including data republic,
surgical partners and flare HR. “Data Republic” constructs innovation to influence
information to trade secure, straightforward and open for information experts. The Data
Republic stage gives a commercial centre and administration answer for associations to
oversee exclusive information trades, outsider information investigation and the progressing
use of traded experiences. Human resource is very important in increasing company
productivity. Flare HR gives a far-reaching cloud-based HR and worker benefits stage to
streamline the procedure while expanding engagement and enabling representatives to be
better educated about monetary administrations and items (Mayo 2015). Flare oversees
everything from on boarding of new representatives to finance and execution surveys, uniting
a best-in-class suite of uses to control the procedure.

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CRITICISM OF PAST BUSINESS POLICIES
There are a number of criticisms and controversies that were faced by Westpac in the
past which affected its business, and many of these criticisms are related to its strategic
operations. The first of which is its decision related to the cancellation of funds to Adani
group. There is a considerable measure of adoration for Westpac, and a lot of outrage as well.
It is all since Australia's second biggest bank has updated its approach of loaning to coal
mining ventures. A declaration by Westpac overnight successfully executed off any potential
duty by the bank to help in financing Indian mining mammoth Adani's proposed Carmichael
"super coal mine" in Queensland (Thomsen 2018). The reverse somersault implies Westpac
will pay more than lip administration to its since quite a while ago expressed sense of duty
regarding battling environmental change, and can be translated as an immediate reaction to
serious open weight (McIlroy 2017). Nevertheless, senior Turnbull government figures are
enraged. Queensland Senator Matthew Canavan, who has long given the potential mine a role
as an issue about occupations, employments and occupations, blamed the bank for walking
out on Queensland. The choice irritated Federal Resources Minister Matt Canavan, who
depicted Westpac as a pack of "weaklings" (Sharwood 2018). "Companies are weaklings
nowadays in standing up these (natural) activists," Senator Canavan told a question and
answer session not long after Westpac discharged its strategy (Underhill and Smellie 2018).
That adequately would preclude loaning to wanders utilizing coal from Australia's last
undiscovered asset in Queensland's Galilee Basin. Westpac is limiting fund for new mines to
those utilizing assets in the best 15 for each penny of coal quality all around. "We
characterize the main 15 for every penny as having a particular vitality substance of no less
than 6,300 kCal/kg gross as got," Westpac's strategy noted (Westpac.com.au 2018). "This
esteem is alluded to as the Newcastle high vitality coal benchmark.""It is frustrating Westpac
has settled on this choice without conference with the general population of northern

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Queensland," Senator Canavan, who additionally is the Minister for Northern Australia,
included (Long 2018). Westpac's choice means each of the four of Australia's huge banks
have now walked out on the venture, with NAB precluding support in 2015 after the CBA
went separate ways with the task, while ANZ CEO Shayne Elliott said his bank was "not
included and has no plans to be associated with any financing" of the mine.
In the second case of criticism and controversy, buyers who got life coverage
exhortation from a Westpac adjusted money related guide and acquired a strategy in view of
that counsel have been urged to join a policy, which proves the bank cheated customers for
their disaster protection premiums. The legal proceeding, which has been documented by
Shine Lawyers in the Federal Court of Australia, could bring about an aggregate case of $100
million. Shine Lawyers expressed that the case will affirm that the Westpac Banking
Corporation charged customers of bank-based guides 4.5 percent more in premiums than for
a similar life insurance product when suggested by a neutral counsel (Yeates 2018). Shine
Lawyers Class Actions Special Counsel, Jan Saddler said the higher premiums had been
charged since 2010 and the activity would try to restore the overpaid premiums and any
premium or benefits produced using ventures. The plaintiff’s law office contends the bank
intentionally exploited clients, and a huge number of customers may have claims against the
bank that could be worth up to $100 million (Yeates 2018). Westpac's BT Financial Group
pledged to guard the issue, saying the hole in premium costs reflected distinctive endorsing
practices and administration levels (Moir 2018). Insurance protection legal advisor John
Berrill, head of Berrill and Watson, said a key issue for the case would be whether it was
looking at "apples with apples", and this would require "legal examination". He focused on
the wide variety in insurance policies terms and conditions, which can make correlations
exceptionally troublesome. Lead plaintiff party Greg Lenthall said that the clients were just
seen as sources of income rather than human beings who needed special care and protection.

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"It's not about the cash, it's about trust and the way that we had confidence that they were
acting to our greatest advantage. At the same time, they were manhandling this trust to
support their benefit," he said. "We need to see the bank considered responsible for its moves
and for making preferred standpoint of its clients. It's the little individuals like me that permit
organizations like this to exist and they have to quit treating us with such hate." Budgetary
arranging and protection industry authority Brian Boggs said Westpac's lead was a long way
from shocking given the conduct he had seen from some of Australia's greatest banks. "It is
regular learning that the enormous banks attempt to offer their in-house life item despite the
fact that there are many other life insurance providers charging far lower premiums," said Mr
Boggs.
ENVIRONMENTAL ANALYSIS OF THE COMPANY
PESTEL ANALYSIS
Political- The political factors that influence the business activities of Westpac includes the
annual budgeting that has a direct effect on the banking system of the country. The
government may alter the interest rates, which may affect the existing rates and business of
the bank (Rothaermel 2015). The foreign investment of the bank will depend on the
government policies of those countries.
Economical- The increase and decrease of overall economic situation of the Australia will
determine the increase or decrease in business. Australia has seen economic growth over the
years so as the bank’s customer base has increased.
Social- The Company Westpac has been actively involved in corporate social responsibilities
which has increased the goodwill of the company in many ways.

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Technological- Westpac has implemented technologically advanced security solutions have
brought in a number of institutions and customers.
Environmental- As discussed above Westpac has rejected a high profile funding to Adani
group for environmental issues. The company is committed to environmental causes at the
cost of its business.
Legal- The goodwill and business of the company has been affected by the recent “class
action suit” for charging exceptionally high fees.
SWOT ANALYSIS
Strength- The company has a strong assets base with a lot of infrastructure. It has a developed
capital standard. The company has a diverse workforce. The regular and continuous growth
of its customers is a strength of Westpac.
Weaknesses- There are legal issues about the unjustified over charges of the company. Many
a times the bank fails to meet expectation of the shareholders.
Opportunities- The company is rapidly increasing the digitisation of its service. It is
simplifying products and policies. The bank is expanding across geographical locations.
Threats- There is a huge threat from the close competitors in overtaking the market in many
segments (Aithal 2016). The legal cases have given a blow to the goodwill of the company.
PORTER’S FIVE FORCE ANALYSIS
Threat of new entrants- Westpac has innovated its products and simplified them to keep
ahead of competitors. It has to spend money on research and development to further proceed
in the area. Threat of new entrants is very important factor in Porter’s five-force model
(Dobbs 2014).

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Bargaining power of suppliers- Westpac should build up an efficient chain of supplies to be
self dependant. They are already working on product innovation they should experiment with
product design as well.
Bargaining power of buyers- Westpac has a huge clientele, which automatically solves this
problem because the size of the business is considerably high. They should offer products,
which are unavailable from their competitors so that there is less window of bargaining.
Threats of substitute product- The company has to reduce dependability from products by
being more oriented towards service.
Rivalry among competitors- The company has to differentiate from the competitors by
building a sustainable business model which it is already working on and is successful in a lot
of areas. It may as well think of collaborating with some of the competitors toreduce
competition.
LEADERSHIP AND CULTURE OF WESTPAC
The present CEO and managing director of the company is Brian Hartzer who is a
director of the “Australian Bankers Association”. He is the chairperson of “The Australian
National University Business and Industry Advisory Board.” This person has been super
successful in his career and was CEO as “Retail, Wealth and Ulster Bank”. He also has spent
10 years in various positions at the “Australia and New Zealand banking group limited”.
Lindsay Maxsted is a part of the directorial board who is a very famous businessperson. He
was the CEO of KPMG Australia. This famous businessperson is also in the board of
directors in “Transurban Group”, “BHP Billiton” and “Public Transport Corporation”.
The work culture in the company is highly diverse and inclusive. Different capacities
and talents work together in the company. The leadership is also diverse and highly

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proficient. The organisation has also collaborated with the “Australian Human Rights
Commission” and floated the “Cultural Diversity Blueprint”.
CONCLUSION
The detailed analysis of the business and strategies of the Westpac banking
corporation it can be concluded the bank has been successful in formulating well-balanced
policies to increase business and earned goodwill through its corporate social responsibility
activities in various sectors. However, there were some very controversial and contentious
issues, which the bank faced including the legal suits. The bank should do a detailed analysis
of its weaknesses and threats to work in the area. To justify its vision statement the company
should expand its base to economically powerful countries worldwide.

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