The strategic priority of Westpac in achieving financial sustainability.
Introduction
Westpack is a banking corporation that is based on stalwart financial Australian institutions, which majorly serves the Australians clients, neighboring pacific island, and Area land too. The company has several customers adding up o approximately 14.2 million members. It has about 1200 branches with over 3200 ATMs cards. It is categorized as one of the largest banks within Australia. The loan portfolio of this company is about 710 billion dollars. Across the operating segments of this company, every part is acknowledged for its bank’s brands. It was the first bank to be established within the continent of Australia since it was founded in 1817 in Sydney. Amongst its brands include; BT Financial Group, RAMS, Westpac, amongst others. It operates on a highly diversified financial portfolio, which is divided into either a consumer-oriented segment and institutions oriented segment. The diversified product portfolio for this company is formed by the advisory services and the management of wealth. Based on its operation, it has developed a high reputation in both NewZealand and Australia. The board of directors forms the executive members of this corporation (Vincent, 2016). These members are characterized by high management skills, top experience, and expertise. They include Lindsay MaxstedWho as the chairman of the nomination committee boards, John McFarlane, who was amongst the Westpac within the membership under risks and compliance., Peter King who was in charge of the technology committee. Other members included Alison Deans, Craig Dunn, Craig Dunn, Anita Fung Amongst others.
The company is above conducting general services since it bases its operation on the extensions of the consumers’ team. The corporation continually strives in the provision of adequate quality services o its clients; hence has highly created the confidential feelings, appreciation, and values between the client and the company. Through its practical operation, almost every service conducted by Wespac has been considered to be proactive and highly organized in the best possible manner. Due to its best operations, the company majorly operates with over 85% of the referral clients hence has highly generated a high-profit margin. It enhances working freshly by making every project service to have its uniqueness (McIlroy, 2017). The company correctly handles the challenges through the application of the practical approach. The company perfectly understands that it has to meet every project challenge with a new perspective in creating awe-inspiring and cost-effective solutions. The diverse portfolio and the extensive operation of Westpac are based on quality services, which show how the ideas of every client can be put into considerations. Other values that have made this company achieve its goals include integrity, achievement, courage, teamwork, and honest and ethical behaviors.
Based on the recent report Waespac have been reported to have some concerning issues for the client organization. Child exploitation and money laundering scandals have been a big issue with this company. The company has been found to have violated the laws based on counter-terror finance. This has made most of its client to doubt its operation. The resignation of Brian Hartzer, who was the CEO, was upon such issues. Based on this concerned issue, the financial intelligence agency of Australia conducted legal actions against the corporation. The accusation conducted was based on the failure of the corporation to meet all its obligation, specifically under counter-terror finance and anti-money laundering.
The strategic priorities of Westpac corporation are based on digital transformation, the revolution of the workforce, highway growth, discipline in performance, and offering of the leading services. The company works in achieving its mission, which is based on becoming the most exceptional service company in th world by helping is clients and communities to prosper and grow. The set strategies of this corporation are to effectively meet its mission by building enduring and profound customers’ relationships by leading within the community and delivering superior shareholder’ returns (McIlroy, 2019). Besides, the vision of the company, which is based on having global leadership within the financial sector, is a driving way towards the success of this corporation. The recent merger, which has resulted in a significant review of all the processes of the company, is based ion the sustainability 2018-12020 strategy, which focuses on the extensive analysis of th emerging issues through comprehensive consultation strategies. Amongst the priority areas within th strategy include helping people in achieving the best financial decision, helping people in case of any neds, and creating prosperous s nation.
The point of view
The aim of the corporation is based on differentiating itself from the most advanced of the world and on aiming in digital investment. This has been like a challenge to Westpac since it only allows the broad range of th end-users to notice its functions and services digitally. The action of this corporation in differentiating itself against digital markets should be done while embarking on the multiple digital marketing programs for several years. The partnership effect taken by Westpac in linking up with Feserv on the structured design process would profoundly manifest itself across the structural design process, which would uniquely and functionally interact in a tiled based manner. Through the assistance of Fiserve, Westpac corporation has fully deployed the alerting integrations and notification, the aggregation of the account from the third party financial institutions. It has also integrated on the single palatforms across multiple segment customers besides centralizing through the best web method practices and technologies.
Time context
The crisis arises almost annually within Westpac corporation .this has made Westpac t hold a crisis talk with its significant most substantial institutional investment over the allegation based on the money laundering issues. Due to the annual occurrence of this problem, the financial agency of Australia arose against Westpac to launch legal actions based on its financial management (Tanzer et al. (2016). The corporation was therefore accused of operating over 23m breaches of laws based on counter-terrorism finance and anti-money laundering breaches. Westpac involved itself in illegal transactions and access to funds, which resulted in approximately 11 billion dollars with the inclusion of exploitation of the child. Concerning this issue, the case could probably lead to over one billion fine dollars . further investigation is being carried on against the corporation, which would directly influence its senior executive members and the directors. Primary research was conducted on the 21sst of November 2019 based on possible legislation breaches which get administered by Westpac.
Statement of the problem
The frequency of crisis based on counter-terrorism finance and anti-money laundering breaches is contributing to a lack of trust from the clients, loss of resources within the company, and high capital expenditure on fine and fees.
Statement of the objectives
To attain global leadership within the financial industries
To increase technological impacts on financial markets.
To maximize return in capital.
Westpac is concentrating on increasing more branches
for its customers for easy accessibility of the bank services.
The consideration areas
THE MWESTPAC MANAGERS HAVE EFFECTIVELY USEED SWOT analysis as the strategic management tool. Hence, the management department can map out the strengths, weaknesses, opportunities sand threats within the current operating environment. Through this strategic analytical too, This corporation has been prepared to maintain its prominent position within th global markets (Hinman, 2017). Through SWOT analysis, the Westpac organization has easily identified the internal factors which might either affect the company negatively or positively. Besides, it has also identified the external strategic factor, which affects the performance of the organization. Through SWOT analysis
th Westpac managers have been able to identify the following types of strategies ;
The strength opportunity strategy, weakness opportunity strategy, weakness opportunity strategy, weakiness threat strategy, and strength threats strategies.
The strengths of Westpac is a contributing factor for the company to thrive within the market place. they are categorized under internal strategic factors and b include of
the following;
It is constituted of a highly skilled workforce that has been attained through successful learning programs and training services.
It has a strong portfolio brand, which is very useful for the expansion of the company for product development.
The corporation is based
under influential community dealers, which has made it boost on its level of investment highly.
The company operates under automated activities hence making it achieve consistency based on its products. The company is capable of scaling the demand market condition in any other way.
Westpac operates under secure network distribution, which has made it to quickly establish a reliable network that can reach the potential and the targeted clients.
High satisfaction level has been enhancing by Westpac hence making more significant sales and profit.
The strong free cash flow successful track record based on new product development has been a strength that has highly boosted the innovation ability.
Weaknesses of the company, on the other hand, constitute areas under which Westpac should improve upon. The following are the weakness of Westpack corporation;
The inventory day of Westpac is very high as com, pared to the competitors; this, therefore, makes the company spend high amounts for the channel investment.
The attrition rate within the workforce is extremely high
hence making Westpac spend much capital on developing employees and enhancing training services.
The product demand is not suitable for forecasting purposes hence contributing to tremendous missed opportunities as compared to other companies.
The structure of the organization is only compatible with the present model of the business hence limiting the adjacent expansion of product segments.
The company operates with a lack of choice, which gives its competitors a significant market foothold.
The development of technologies requires investment to adjust ent for the company to cope up with the global market and to compete with its competitors effectively.
The opportunities include:
The development of the market which would contribute to the dilution of competitors’ advantage hence making Westpac increase its competitiveness more than any other competitor highly.
The operation within a new environmental policy has created a chance to operate in the new field and expand on its services.
Based on the government agreement, the corporation can open up a new market by operating in free trade agreement and adoption of standards-based on new technology.
Westpac can easily open up a new market based on the rent of modern consumer behavior. Thre opportunity created would enable Westpac to build a stream of new revenues while diversifying into the original product.
The new online customer channel opens a new channel scale for Westpac; hence quickly understands the needs of its customers besides serving the search needs to build strong customer relationship.
Through the invention of new technology, Westpac has been able to operate opportunities based on pricing strategy within the modern market.
The new consumers’ trend and the stable free cash flow creates adjustment opportunity to the organization.
The threats of Westpac is categorized under external strategic actors and include the following:
The rising
raw materials that create a risk to the profitability level of Westpac.
The isolanation trend In the economy of Amerca would negatively influence the sales of the company.
Intense competition has threatened the company towards operating in a new environment.
The counterfeit limitations and low product quality is a significant threat to the products of Westpac
specifically in a small income market
and within market emergence.
Insufficient supply of innovative products makes the company experience high and low swings within its operation.
The laws based on liability may contribute to change in market policies hence making Westpac lag behind.
The regulations under the new market environment based on 20916
Paris agreement makes the company experience threats based on the categories of its products.
The alternative cause of action
Westpac can take the following steps in meeting the challenges and solving its problems. The company can focus on its long term goals while ditching the short term thoughts. This action would make the company to effectively and efficiently prioritize on its needs while addressing any given situational challenge. It can also clearly communicate the problems by clearly grasping the current situation and delivering it to different managers surrounding Westpac organization (Tanzer et al. (2016). This would make the organization meet all its set goals, mission, and vision. Another alternative action is based on the collaboration and settlement of the solutions. The challenges experienced within Westpac organization should be discussed by the managers in an informed and mutually calmed manner to achieve beneficial discussion (Swanton et al. (2019). Through these aspects, the company would be capable of focusing on its vision picture while keeping the executive members and the customers within the loop to prevent any form of devastation.
Westpac have scope to make improvements based on outcome and
business development. It can provide various services such as international student loans, which would boost its financial performance (McGuigan et al. (2017). Besides focusing on the general objectives, it also needs to focus on other areas such as opening different braches a the levels of the consumer in European Nations and the united states. Based on the sector of home loans, the general performance of Westpac organization is not very remarkable; hence more focus should be made concerning this.
Strategy formulation
The complete definition of the problem is the best and effective way that Westpac can adopt to settle all its challenges. To completely define the problem, Westpac would identify what the actual problem is and then isolate the problem to deal with it effectively. By thoroughly understanding the problem, the appropriate solution would be enhanced (Mattia, 2018). Th specific problem of Westpac corporations based on poor technological management, which should be clearly be defined by the firm. This kind of solution is beneficial since it would make the company effectively deal with technical problems hence boosting its general performance. It is the most effective way of implementing the best solution ever for the challenge while ignoring the possible wrong solution which might occur. Through this strategy, the company would understand the major issue, its symptoms, and its effects. It is the best formulation strategy since it involves asking questions such as where, whom, when, how, etc.
Action Plan
The strategic priority of Westpac in achieving financial sustainability.
Actions
1a. Strengthening procedures and policies.
Effectively form the establishment of the structured project to track monthly performance and to develop the annual budget every month
Prepare sufficient multi-year projection budgets with the inclusion of all projected expenditure and the revenue sources
Adopt the best policies and procedures in managing the financial and real assets
1 b.
reducing financial exposure for the land banks
Making general considerations based on how the exposure of the land banks can be reduced by focusing on the assessment sites, sales, and transfer of liens(Swanton et al. 2019).
Prepare a checklist of the associated risks with the ownership property, such as the status of the environment.
1c. increasing the required revenues in supporting the annual operations
Issuing every request for proposal development while taking consideration fee.
Consider levying charges to the member’s fees for public participation.
Charging the required fee to other developing sectors (Mattia, 2018).
Developing significant partnership entities to jointly pursue the acquisition of funding while targeting the neighborhoods for rehabilitation and demolition of th properties.
Conclusions
The above research majorly focuses on the strategic analysis of Wespac corporation. Various functioning areas have been thoroughly analyzed. The operation of the Westpac company is based on complex and dynamic competitive environments, which requires the corporation to implement the best possible strategy for its effective functioning. Based on traditional measures concerning the procedures and the rate of performance of Westpac corporation, Watspac experiences financial issues, which makes it not to be able to meet the targeted performance within the operating processes. The balanced scorecard approach shows the required adjustment for the successful operation of the company through the analysis of return based on both none financial and traditional financial measures. The management and performance process of Westpac is considered to have evolved through different operations for its effective management. This has been enhanced through different units within the corporation i.e., Business Consumer Banking, the
Institutional bank of Westpac, th services of New Zealand retail, amongst others. In general, the overall strategic evaluation analyzed above would help Wstpac in driving some new strategies to achieve its vision quickly and to fulfill all its objectives effectively. The report suggests Wstac focus on the best solution strategy, which would help in limiting losses within the company. Besides, it will be straightforward for Westpac to achieve its vision based on global leadership and management rapidly.
Refrences
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McIlroy, J. (2017). Protesters target Westpac over Adani funding. Green Left Weekly, (1127), 4.
McIlroy, J. (2019). Westpac scandal underlines the coalition’s hypocrisy on banks, unions. Green Left Weekly, (1247), 7.
Mattia, L. (2018). The Prevalence of Unconscious Bias. In Gender on Wall Street (pp. 65-80). Palgrave Macmillan, Cham.
Hinman, P. (2017). Westpac won’t fund Adani: A victory for people power. Green Left Weekly, (1135), 5.
Tanzer, G., Commissioner, A. S. I. C. & Tanzer, D. M. (2016). BANKING IN AUSTRALIA: UNREGULATED & UNPROTECTED-PART 4.
McGuigan, N., Sin, S., & Kern, T. (2017). Sourcing sustainable finance in a globally competitive market: An instructional case. Issues in Accounting Education, 32(1), 43-58.
Swanton, T. B., Gainsbury, S. M., & Blaszczynski, A. (2019). The role of financial institutions in gambling. International Gambling Studies, 19(3), 377-398.