Competitive Strategy Commonwealth Bank

The Competitive Strategy Commonwealth Bank

Introduction

CBA (Commonwealth Bank of Australia) is one of the largest, leading and reputed Australian multinational banking companies that have its business operations in the global market including UK, USA, Asia, New Zealand etc. It is fourth largest bank in the country in terms of revenues, profit, number of employees, branches, customers etc. It is offering a number of banking and financial services to the global customers. For instance, broking services, investment, superannuation, funds management, institutional banking, retail banking etc. are the major financial and banking services offered by the bank. It is also listed on ASE (Australian Securities Exchange). The bank is considered leading Australian banking company in the industry. The bank came into business operations in the year 1911. It was run by the government of Australia. Along with this, it should also be noted down that, CBA is well known and reputed banking company because it paid attention on positive change as well as good business practices. In this research paper, the competitive strategies of the CBA would be discussed and outlined to attain the objectives of the paper.

How CBA Reached At Its Current Leading Position in the Market

The innovative, specific and strategic marketing strategies adopted by CBA helped it in becoming the fourth largest bank in the country. It is because, a range of strategic marketing strategies are used by the bank in its current core banking and business operations and procedures. At the same time, it is also analyzed that, the corporate social responsibility approach adopted by the company helped the bank in creating better business practices. In the same way, these brought strategic improvements in the company’s strategies and business operations successfully. CSR practices also played key role in developing unique brand image in the market. It developed bank’s reputation as one of the most trusted financial service provider in Australia (Bandara, Merideth, Techatassanasoontorn, Mathiesen, & O’Neill, 2019). The bank has adopted a range of specific approaches for its business operations including educating employees the value of money, developing them for future economic challenges, using employee’s knowledge towards the attainment of business objectives and commitment in outlining long term value. On the other hand, innovation is another thing that played key role in the success as well as growth of the bank. For example, it adopted a range of specific and innovate techniques, technologies and tools in order to enhance economic wellbeing and improve the living standards of people. At the same time, in order to deal with the present competitive environment, the bank had adopted a collaborating strategy. This strategy is mainly utilized by the bank to solve the business issues successfully.

Key Competitors of CBA and Its Strategies

Today, CBA is facing typical competition with a range of banking and investment companies. For instance, National Australia Bank, Westpac Bank, ANZ Bank, and Suncorp-Metway etc. are the key competitors of CBA. These banks are offering similar types of financial and banking services to their customers at the reduced or less price. Along with this, several types of promotional programs are launched by the competitors of CBA to attract and retain customers. But, CBA is follow collaboration strategy to deal with such competition. For example, as per this strategy, CBA tries to develop long term relationships with the loyal customers so that it can retain and attract them properly. Apart from this, several promotional schemes are proposed by the bank to its customers to stay ahead from competition. On the other hand, CBA have more strategic approach than its competitors. It is investing in technologies to earn revenues and compete with others. Moreover, different levels of strategies are also followed by the bank in order to maintain its current position in the market. Such types of strategies approaches are more helpful for the bank to offer big picture of the bank in the front of the people (Kelly, Malik, & Rosenberger, 2021).

On the other hand, it is also analyzed that, the bank has developed and executed cost leadership, Differentiation leadership strategy, and focus leadership strategies as a means of competitive business strategies. These strategies are the long term strategic plan to gain competitive scope and advantages in the industry over the competitors. These competitive strategies are used for the purpose to create a defensive position in the market and generate highest return on investment in an effective and proper manner. As per differentiation leadership strategy, bank is providing unique and different banking and investment services to its customers. On the other hand, cost leadership strategy has allowed the bank to provide banking services at the reduced cost than its competitors. These allowed the bank to develop a unique brand reputation and image in the eyes of the customers. Moreover, it is also analyzed that, the bank is also focus on creating value to its key customers to make them more satisfied.

CBA is also investing billions of dollars in the Digital innovation to deal with the competition in the market. For example, the bank has added innovative digital capabilities in its operations that allowed it effectively connect with the employees and customers. It is not only helping the bank minimizing the competition but also offering automation and functionality advantages. Digital innovation also allowed the bank in improving its decision making ability in the industry. Hence, it can be said that, the bank is achieving competitive advantages over competitors by minimizing operational costs and business risks (Haisken-DeNew, Ribar, Salamanca, Nicastro, & Ross, 2019).

Meeting regulatory, digital innovation, enhancing business process and compliance requirements are the four strategic options that helped the bank to better control over competitors as well as business activities. Like other banking companies, CBA has adopted specific Cooperative strategies to maintain the cooperation among industry and government. The bank is fully dedicated and committed to provide privacy and security of customer data. So, it understands the significance of customer needs and wants successfully. At the same time, it is also analyzed that, the bank’s corporate level strategies are dealing with the competitors. For case, in order to minimize the competition, the bank is paying too much attention on developing highly innovative products as well as formulating long term policies. Moreover, in order to effectively deal and compete with the competitors, the bank is focusing on enhancing perception of customer and their satisfaction level. Furthermore, the main purpose of the bank is to understand the value and significance of the customers thus it always focuses on fulfilling the expectations and wants of the customers by offering a range of products and services successfully (Barman, & Das, 2018).

Conclusion

Based on the above discussion, it can be summarized that, CBA has developed its strong position in the global market by adopting best business and marketing strategies. The bank has focused on satisfying the current and potential needs of the customers by offering a range of banking and investment products and services at the lowest price. Along with this, it can also be concluded that, CBA is facing direct competition from different banking and investment companies but it is maintaining its position by adopting different specific strategies. Finally, it is suggested to the CBA that it should invest in technology to attain competitive advantages over competitors.

References

Bandara, W., Merideth, J., Techatassanasoontorn, A., Mathiesen, P., & O’Neill, D. (2019). Mechanisms for creating successful BPM governance: Insights from Commonwealth Bank of Australia. In Proceedings of the 17th International Conference on Business Process Management 2019 Industry Forum, BPM2019IF (CEUR Workshop Proceedings, Volume 2428). Vol. 2428. (pp. 49-60). Sun SITE Central Europe. Retrieved from: https://eprints.qut.edu.au/131954/

Barman, A., & Das, M. K. (2018). Internet of Things (IoT) as the Future Smart Solution to HRM.Rretrieved from: https://www.researchgate.net/profile/Arup-Barman/publication/328839451_Internet_of_Things_IoT_as_the_Future_Smart_Solution_to_HRM-How_would_wearable_IoT_bring_organisational_efficiency_Introduction_Rise_of_HR_Technology/links/5be5bcdfa6fdcc3a8dca0100/Internet-of-Things-IoT-as-the-Future-Smart-Solution-to-HRM-How-would-wearable-IoT-bring-organisational-efficiency-Introduction-Rise-of-HR-Technology.pdf

Haisken-DeNew, J., Ribar, D. C., Salamanca, N., Nicastro, A., & Ross, J. (2019). Improving the Commonwealth Bank of Australia-Melbourne Institute observed financial wellbeing scale. Commonwealth Bank of Australia and Melbourne Institute Financial Wellbeing Scales Technical Report, (3). Retrieved from: https://fbe.unimelb.edu.au/__data/assets/pdf_file/0009/3045708/CBA_MI_Tech_Report_No_3.pdf

Kelly, A. L., Malik, A., & Rosenberger, P. J. (2021). Performance Drivers in the Australian Banking and Financial Industry. Routledge. Retrieved from:https://www.taylorfrancis.com/books/mono/10.4324/9781003049463/performance-drivers-australian-banking-financial-industry-ami-lee-kelly-ashish-malik-philip-rosenberger