National Australia Bank Limited Business Innovation Model Harvard Case Solution & Analysis

National Australia Bank Limited Business Innovation Model Case Study Solution

Economic factors

The economy in Australia has been remain resilient to the global economic and financial downturn and it has recovered at faster rate in comparison to other leading economies in the world. The improved rate of unemployment and the strong growth in the population has been supporting a growing economy on continuous basis. Despite of the fact that the overall economy of Australia remains sound, there are various risk and threats emerging in the market which includes low real wages growth, potential disruption in the trade globally.

Social factors

It is to determine that the population in Australia is ageing and it is further expected to be increase of the total Australian population in the forthcoming years. Due to this fact, the National Australia Bank Limited would most likely increase its level of funding to increase the return on investment (ROI).

In addition to this, the Gen Y refers to those people whose age falls between 18 and 24, they are less likely to be engaged in their communities in actively manner as compared to old age group. Only 10 percent of the people from old age group take active part in the activities related to community. Furthermore, the key differentiator of the National Australia Bank Limited depends on the long term relationship it has been striving to build with the communities where it operates. Since, the company invest in talent to grow, attract, mobilize as well as retain a diverse and a world class workforce, the lack of community involvement would most likely dilute the value proposition of National Australia Bank Limited.

Technological factors

The Regional Backbone Black spot Program is one of the initiative from Australian government which aims to deliver the high quality access of internet to regional Australia, enabling to deliver the super fast broadband to regional areas, hence allowing the customer base of National Australia Bank Limited to access the wide range of the online services.

Legal factors

The Australian Prudential Regulation Authority (APRA) had published a draft practice on a management of information technology security risk, with the internet security specifically in relation to online banking comes under the increasing scrutiny, the National Australia Bank Limited might gain a competitive position in the market by being the early adopter of the imposed regulation.

Environmental factors

The climate change and the global warming has been severely threatening the livestock sustaining capacity and the level of the agricultural production in Australia. As the National Australia Bank Limited has been committed to support the rural and regional Australia, the area is under the threat from the climate change effects, it is significantly important for the company to create the sustainable products in order to motivate or encourage its customer resided in rural areas so that they would adopt green measures. This in turn would allow the rural communities to increase or / and maintain their productivity level while protecting the capital and customer of the National Australia Bank Limited.

SWOT Analysis

Below are the strengths, weaknesses, opportunities and threats of the company;

Strengths

It is to note that the National Australia Bank Limited has received highest customer satisfaction amongst the major banks. It is one of the renowned bank which ranked on second number amongst the major banks (net promoter score -16, four points decrease as compared to 2017). A good financial position and the brand name is one of the notable strength of the company. It always innovate to improve the banker and customer experience, thereby strengthened its reputation in the highly competitive market arena. Another strengths of the company includes large diversification in banks operations, manpower with relevant banking skills for managing the operations and the internet banking. Moreover, the long term and genuine commitment of the company to sustainability provides the competitive advantage over the competitors. Another strength is that it is one of the largest bank of Australia by assets with good interest income and revenues.

Weaknesses

One of the weakness of the company is the non-responsive and complex organizational structure. Another weakness is that the decline in the revenues of the company affect the long term development and growth.

Opportunities

It would be no exaggerate to state that the company would leverage in terms of profits, market share and market recognition in case of expanding its business operations in the international markets. It should exploit the opportunity if accessing the foreign market. The company can diversify its portfolio for its customer base and it can target the asset management sector as well. Additionally, it can robust the development in different sectors which promises the growth opportunities and the economic health of Australia as a whole.

Threats

The threats that should be mitigated or addressed in timely manner includes the fierce competition from four major market rivals. Another threat includes financial crises such as recession and the changing government regulations might posit challenges to company in exploiting the market opportunities. Alongside to direct competition, the indirect competition from other financial institution is another threat to the company (Norton, 2008).

Business model innovation

Put simply, there are various key areas that are suggested to be improved by the company and should be incorporated in the business model of the company (Netessine, 2014).  The key considerations are as follows;

1. Leverage opportunities with suppliers for greater prosperity and more inclusive growth in both short run and long run.
2. Build financial capability and enable more inclusive banking and employee diversity.
3. Delivering online toolkit of resources of business in order to complement current financial resources, for SMEs to help them scale up and / or innovate.
4. Strengthen financial capabilities
5. Extending a line of credit to fund small business lending torefugee.
6. Increase lending to social enterprises, businesses owned by Indigenous Australians and women.

Conclusion

To sum up, it is to conclude that the National Australia Bank Limited provides the business banking & personal banking services.The National Australia Bank Limited is stronger with its effective and straight forward business model that is to deliver the long term value to the shareholders.The business model of the company is depends on several strategic objectives such as focusing on customer all across Australia, maintaining strength of balance sheet, lowering complexity as well as cost and improving market reputation. It is recommended that the company should Leverage opportunities with suppliers for greater prosperity and more inclusive growth, build financial capability and enable more inclusive banking and employee diversity, extending a line of credit to fund small business lending torefugee.

Exhibit A

Exhibit B

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