ANZ Group
Discuss about the Dedicated and Transient Institutional Investors.
The process of planning, scrutinizing, analyzing and assessing the all the required processes and operations for making the fulfilment and accomplishments of the targets and determined objectives can be termed as strategic management (Barney and Hesterly, 2010). Fast-paced innovations, emerging technologies and customer expectations force organizations for thinking and make decisions strategically for remaining successful. The below executed analysis is focused on impact of Crypto-currency on ANZ Group in Australia.
The ANZ Group or the Australia and New Zealand Banking Group Limited is the third largest bank for market capitalisation after commonwealth bank and Westpac Banking Corporation in Australia. Their operations are mostly Australian, with the domination of commercial and retail banking (Abril and Cánovas, 2016). It is also the largest bank in New Zealand as well and it became the legal entity as ANZ National Bank and changed into ANZ Bank New Zealand in 2012, in the same year it retired and a number of branches closed and converted into ANZ branches.
ANZ is one of the well-renowned brand names in the sector of Australian banks in the Asian-Pacific Region. With expanding markets in China, Vietnam and Indonesia. It is also present in many Pacific Island Nation where it competes with a lot of Australian banks. Its arm in New Zealand is a subsidiary company of the ANZ National Bank in 2012. A strategic alliance was formed in 2005 with the Vietnam’s Sacombank which had an acquisition of 10% in the share capital. And as a part of the strategic alliance they provided the technical assistance in risk management and small business banking.
A similar Chinese strategy is followed by ANZ group and that is of acquiring the 20% share in Tianjin City Commercial Bank in 2006. In 2009, ANZ had retail units in Taiwan, Singapore and Indonesia as well as RBS’s banking in Taiwan, Philippines and at a price of 687$ million. By 2012 the company had 1337 branches all over the world. And by 2016 it adopted a less aggressive way to expand in the Asia-Pacific area in low returns. In 2016 ANZ did the sale for the Asian retail and wealth management to the operations of the Development Bank of Singapore which was a withdrawal from the Asian Pivot.
Bitcoin is one of the digital currency in which the techniques and mechanisms of encryption are utilized for regulating the generation of units of currency and verifying the transfer of funds. This currency is operated independently of a central bank. Bit-coin has been considered as the most famous example of an developing technology that have a potential of bringing advancements in the banking sector. By making use of the elegance of mathematics Crypto-currencies enable almost instant transfer of value at minimum or no expenses between two parties without the need for a trusted third party.
ANZ’s Strategic Alliances
ANZ had been advancing and developing its work from the offshore offices. ANZ has a Bangalore office since 1989 one of the first in India. There was a: Lost in Space robot and a Dalek from Doctor Who for advertising purposes (Armstrong, Adam, Denize and Kotler, 2014).
Due to the increasing growth in the business environment of the banking sector and that is why the geo-political environment has an impact on the profitability and the operations and same is the case for the ANZ Bank (Bakker, 2014). The political unpredictability in Iraq and the war by the US and the defied attitude of the North Korea in the past and also the increasing terrorist activities everywhere in the world will be stimulating the business environment. The political conflict in the Pacific Region like Fiji, Solomon Islands all had an impact on the major economies of the world and of these regions and then affect the growth of the banks and the investment business prospects in these areas. On the basis of the research it has been noted that Crypto-currencies have had a strong political climate that is aiding them in gaining popularity. One of the most empirical impacts of crypto-currency is decentralization of money issuance and also the crypto-currencies are not under the control of governing authorities. The crypto-currency is decentralized because the government does not back them and hence the users are transacting directly without interference of the state. And these all are the reasons that depicts the impacts of crypto-currencies on the ANZ Group.
The world economic variants are one of the factors that are obviously having tremendous impact on the bank’s revenue generation abilities. The ANZ economic environment had been positive and the same thing has been expected for the future as well. The Australian economy is centred and also had been in a growth phase and is continuing and that has been considered as an impressive accomplishment and these developments and advancements will continue (Buckingham, 2011). Although the growth rates for New Zealand is not that great. Nevertheless the overall environment is positive and showed a lot of business opportunities in the next few years.
Technology also played a factor in the overall working efficiency and consumer satisfaction. Technological trends and fluctuations are very much liable in influencing the business operations of the business entity and for coping up with the ever changing and developing environment the entity is required to keep itself up-to-date. For the bank to remain in the competitive market the bank had to anticipate technological changes and form a strong strategy (Carroll, Primo and Richter, 2014). ANZ uses specialists to improve the technological skills and to give in new and better technologies for the risks and opportunities for the risks in the budding technologies like the bank had introduced complete digital certificate system that serves a safe online environment for the customers. This had helped ANZ to trust and security initiatives for a global position for a global leader.
Impact of Crypto-currency on ANZ Group
All the financial institutions are supposed to comply with basic standards of it. The same conditions apply to ANZ and had operations for a large number of nations affected by the regulations and the law in every jurisdiction (Cortez, Tu, Anh, Ng and Vegafria, 2014). Thus it had to lay down standards which complied with the global legal framework. For example, the bank requires operating with the requirement of the Banking Act 1959 and had to keep an Australian Financial Services Licence. The bank took part in many advisory bodies of the government to indulge with the governing authorities on a very timely basis as well as the corporate governance strategies in compliance with the standards of the government guidelines. Due to decentralization of crypto-currency there is no control of the governing authorities and hence no interference can be done by the state. And this is the main reason due to which these currencies have minimum legal limitations. The CEO of ANZ group Shayne Elliott said that Hayne royal commission marks a “watershed moment” for the banking sector but warning to the shareholders is also given notifying that slower loan growth. “The royal commission impact is real (Shapiro and Eyers (2018). ” Mr Elliott said as the lender reported a $3.45 billion half-year cash profit, which was up 4 per cent and matching consensus expectations.
The social factors had various risks for the financial associations in their lending practices and same is the case for the ANZ. That is why the bank had established a social problem policy to scrutinize and identify the probable risks in the credit approval phases (Daspit, Chrisman, JSharma, Pearson and Long, 2017). The bank has client processing tools to help out the approval process and identify risk borrowers like their social standing. And also, the bank had associated the Equator guidelines which had assisted in developing the social and the environment rules and regulations which had applied for the lending and the investment in developing countries. All these helped the bank reduce the effect of the social variants and identify the business openings for the social environment.
The diamond business model has been developed by for the business organizations to aid them in understanding their competitive position in the international markets. This Porter diamond model is also known as Porter Diamond Theory of National Advantage and this is because all the factors that are significant in the in international business competition resemble the points of a diamond. The below presented is the
The new entrants bring in innovation in doing things and have put pressure on Australia And New Zealand Banking Group Limited by a low pricing strategy, reduction in costs and giving new value to the customers (Dhariyal, Negi and Kothari, 2017). Australia and New Zealand Banking group has to handle all these risks and develop effective barriers to protect against the competitive edge.
- By emerging and launching new products and services the business entity not only attracts new customers to fold in but also the existing customers get a reason to buy Australia and New Zealand group’s products.
- The economies of scale can lower to lower the fixed cost per unit.
- Expenses incurred on the research and development (Djenontin, Foli and Zulu, 2018). The new competitors are not probable to enter a very active sector where the market leaders keep describing the ethics. It has significantly reduced the window for the extra profits for any new firms and therefore discourages new players.
Vendors dominate the position and can reduce the margins of Australia and New Zealand Banking Group Limited and can earn that in the market (Duffy, 2011). All the powerful suppliers in the banking sector are making use of the exchanging power to get a high price from the firms in the Banks of field. And the total effect of the vendors bargaining power is to lower the total profitability of the banking institutions.
- By having a good supply chain and that too with multiple vendors.
- By experimenting with design of the product for the various materials for the rates to go high of one material and then shift to another.
- Dedicated suppliers who are dependent of the business of the firm. One thing they can learn from their competitors is how the business organization advanced a third party producer and the business and it completely depends on creating the picture where these people have les bargaining power like Wal-Mart and Nike.
Buyers are challenging and they want to get best services available for paying the least rate possible (Eden and Ackermann, 2013). These requirements pressurize the business organizations with a higher negotiating power for the customers and an even advanced aptitude to look out for the increasing the discounts and the offers.
- Developing a large customer base, will minimize their haggling power and also offer a chance to the business entity in streamlining the sales and the production.
- By developing and launching new products. Customers look for discounts on the normal products so the Australia And New Zealand Bank to keep on bringing new ideas for products which will limit the haggling ability of them buyers.
- New products also decrease the defection of the already existing customers of the Australia And New Zealand Banking Group
Whenever a new product meets a similar needs of the customer in different ways, the industry profitability suffers. Like Drop-box or Google Drive with the substitute storage hardware devices (Foxall, 2014). The threat is high then it offers a value proposition for the uniquely different offering in the industry.
- Service oriented rather than being product oriented.
- By knowing the core need of the customer that what is the customer is buying.
- Increasing the cost of switching for the customers.
If the rivalry is intense in the industry it will lower down the prices and also decrease the overall profitability as well (Helmuth, 2018). Australian And New Zealand Banking Group Limited operates for the banking industry. The competition takes a toll on the long term profitability of the organisation.
- A sustainable differentiation.
- Building a scale to compete better.
- Collaborating with the competitors to improve the market size to compete a small market.
The Australian crypto-currency exchange the coin spot and gave warnings for the liquidity issues due to a lot of customers cashing rubbish.
In December 2017, Coin spot announced it was suspending the Australian dollar deposits for the problems going on with the local banks and the outrage among the investors. These temporary restrictions on the AUD deposits and will remain in effect till a very long time. Trading on a platform that will operate as normal (Kalutara, Zhang, Setunge and Wakefield, 2018). The blanket policy banned the crypto-currency purchases a lot of customers complained to have their accounts being closed. ANZ exercised its discretion to close an account for the unsatisfactory behaviour or any other reason. It does not stop its customers from buying digital currency. The entire idea was to control money laundering to catch terrorists and criminals (Lemoussu, Chaudemar and Vingerhoeds, 2018). And the tricky thing was the customer was to require the bank to treat it like a threat. Bit-coin is a favourite thing of the criminals so it has special attention with the bank compliance officers. That applies to the bit-coin and bank as well.
ANZ’s compliance with legal frameworks
Bit-coin has been viewed as an investment class and what others think of it as scam or big opportunity to start off as the currency in the internet. This year 2018 the currency war between the worlds’ largest developed economies and the business owners said that a fairer playing field is needed which is free of extreme inflation and will erode the pricing power and disadvantage the people with a few monetary levers to pull. The spurred by the volatility and the government manipulation in 2018 crypto-currency takes off. It has resulted in fewer purchases in the overseas market like those who shop on amazon with fewer ATM withdrawal fees and never require ATM’s. Crypto-currency transactions are free with fewer loans and fewer accounts for the term deposits as online crypto-currency offerings to have better returns.
Bit-coin has many flaws relating to the crime related transactions, fraud and lack of transparency. But like many leaders in the market the newer currencies are learning from the mistakes of the old ones (Lindsay, Goia and Yip, 2018). Crypto-currency is yet to gain its place in the future. The impact can be huge or tiny positive or negative if the banks could figure out how to make from it. Right now its just a risk for the investors and they need to investigate first.
The traditional market has option like the derivatives which protects the investors and the asset holders and the business owners against volatility. It can be a key for stabilizing the price of the crypto-currencies and makes them asset reliable enough for exchanging goods.
They provide for the broad variety of investment opportunities handled by experts and lowering the risks and costs at the same time. It is created by the eToro’s investment committee to provide a solution for all those looking for better way to find a sound strategy to break the investments wisely
It has provide companies with technology like block chain. In a nutshell it involves the issuing a project token which the investors and users will purchase with the crypto-currencies.
References
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Shapiro, J, and Eyers, J. (2018) [Online]. Royal commission will hit loan growth : ANZ, Available at: https://www.afr.com/business/banking-and-finance/financial-services/royal-commission-will-hit-loan-growth-anz-20180501-h0zi4z. [Assessed on 24th May].
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