Environmental Factors Of Commonwealth Bank Of Australia

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Environmental Factors Of Commonwealth Bank Of Australia

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Environmental Factors Of Commonwealth Bank Of Australia

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Question:
Describe about the Environmental Factors of Commonwealth Bank of Australia.

Answer:

1.1: Analysis of a factor from the general environment of the case study organization (Economic factor):
The case study organization select for this analysis is the Commonwealth bank of Australia (CBA), one of the top most multinational banks of Australia. It operates its business across Asia, New Zealand, USA, United Kingdom and Fiji. The most effective general environment factor affecting the business of the company is the economic factor. As an example in static and shrinking economy more products are sold and bought. Presently the commodity boom has come to an end. As a result of it Australian economy had slowed down. According to different observations it is seen that Australia has lowest amount of debt compared to OECD countries (Wilson and Pender 2016). As the economies of developing countries like India, Japan etc are getting stronger day by day the economy of developed countries like USA, UK and Australia are getting slowed down. Since the economy of the country influences business decisions, therefore it also affects the banking sector too. The same happens with the commonwealth bank of Australia.
Impact of the economic factor over the business of the industry:
The lending and deposit markets are very competitive in Australia. Therefore, due to absence of appropriate strategy for this the commonwealth bank of Australia has lost considerable market share. The specific sectors in which it lost its significant business are home loans, credit card business and retail deposit. The growth rate dropped from the previous year and statutory net profit after tax is only 2% up than the previous year (Wilson and Pender 2016). The total revenue was $9227 million. Amount of cash return on equity was 16.5%. As result of slowdown the operating cost increased by 4% and costs up to $10,429 million. Even though the bank has a slowdown in its performance but it continued to be number one in providing customer services and customer satisfaction. Wealth management business of CBA regained the top spot for advisor satisfaction (Commbank.com.au 2016). The customer deposit rate increased by 8% compared to last year.

Way of dealing with the economic factor:
In order to deal with the low economic growth of the country, the bank should increase the product range. The increased product range will help the company to attract more customers and achieve more profits from the business. As the customer deposit rates have been increased to a higher level in the recent times, the bank should also increase the interest rate of the loans for gaining more profit from the business.
One of the best possible way of expanding the business is to open in new areas of the country. The people of the remote areas of the company are not able to have the facilities of the bank due to the long distance of the bank branches. Therefore, the new branches may help the bank to have the customers of the remote areas and more profits from the business.
2. Description of One factor from Organization’s Specific Environment (Customer Factors)
There are several factors in specific environment such as customers, competitors, suppliers and pressure group. However, the selected component of the specific environment of CBA is customer component. Mainly, there are two ways in which the customer needs can be monitored. One is reactive way and another is proactive way. Reactive customer monitoring can be done by CBA, by identifying and addressing the consumer trends and issues after they arise. Monitoring is done by listening to the specific segment of customer concerns in a specific market (Wilson and Pender 2016).
Analysis of the Impact of Customers Commonwealth Bank of Australia in 2016
The components of specific environment directly impacts on the different business process of an organization. In case of commonwealth bank of Australia, customer deposits money or purchases services from the banks (Commbank.com.au, 2016). Therefore it is important for the bank to monitor the changing needs of the clients or customers as they are critical for the success of business. Customer needs and requirements influence the product or services provided by business organization.
Like for the Australian market Commonwealth bank should be concerned about the amount of customer deposit in a period of time. Commonwealth bank responds to the consumer complaints which indicate that, the bank is closely attending to its customer concerns. Business organizations that respond rapidly to customer’s complaint are viewed much more positively than the organizations that are slow to respond. This process encourages the customers to purchase service or product again from the Commonwealth bank (Commbank.com.au, 2016).
Explanation of the way of Dealing with the Customer Factors by Commonwealth Bank
In order to satisfy the customers with its services and complaint resolving process, officials of Commonwealth bank should write follow up letters, or thank you letters to its customers with specific responses or with an apology. Apart from that, management of commonwealth bank have to introduce digital touch for their customer service. For example, the bank can introduce peer to peer communication service as applied by the American bank. Moreover, Commonwealth Bank has to engage real time service for their customers. It will help them in satisfying their customer in these days fast mobile world. In addition, Commonwealth Bank can introduce nontraditional banking services such as Google, Apple, Amazon are providing digital customer services.
The letter can also contain the process of handling and resolving the problem. Moreover, it is suggested that if a series problem happened with a customer of the bank then it should send a small gift with the apology letter to make the customer feel special. Like for a customer of Commonwealth bank who is using its net banking facility and facing problems while logging in his/her account, then bank should instantly send an apology mail to the specific customer stating the reason behind the problem. Most importantly, Commonwealth bank should think about identifying the customer issues before the complaint about them to its leaders or management. In order to do this bank can conduct a survey between its customers about what improvements in the services they expect from the Commonwealth bank.

References
Commbank.com.au. 2016. Customer commitment – Commonwealth Bank. [online] Available at: https://www.commbank.com.au/about-us/who-we-are/customer-commitment.html?ei=gsa_generic_customers [Accessed 21 Aug. 2016].
Wilson, J. and Pender, K., 2016. Keep the faith?: The good, the bad and the uncertain in Australian employment contracts. Ethos: Official Publication of the Law Society of the Australian Capital Territory, (240), p.24.

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