BoQ Global Expansion assignment help discusses about methods of global expansion for the Bank of Queensland, the method described can be used for work as solution for any enterprise.
In this section of the report we will be looking into the situation analysis of Bank of Queensland Limited (BoQ). For the situation analysis a SWOT analysis will be done. Prior to that an analysis will be carried out for the company from all three perspectives including industry based, resource based and institution based. We will also be looking into the type of strategies which the company may pursue including corporate strategies, business strategies and functional strategies.
The company under discussion is in the business of providing financial services as well as insurance services to the consumers of the country. The bank, in conjunction with the various subsidiaries, provides a variety of wealth management, commercial banking as well as retail banking services to individuals in addition to commercial clients. The bank also has various products as well as services with reference to personal banking, online banking in addition to business banking. BoQ, which has its headquarter in New South Wales, Australia, is present in Australia as well as New Zealand. For offering the banking services, the company makes use of a unique franchise concept of the Owner Managed Branch (OMB). This can be defined as a partnership between experienced bank managers and the bank. The bank has the intention of optimizing the operations of the business with the use of a range of channels for distributions apart from offering extended range of services as well as products in addition to utilizing technology with the intention of improving the internal processes of the bank.
As far as the banking industry of the country is concerned, it has remained stable during the last few years of global economic meltdown when various other international markets for banking have wavered significantly. However as far as this industry is concerned the environment for the lower interest rates has been able to put some pressure on the growth rate of the companies. In spite of the fact that it is estimated that the revenue for the industry will be declining at a compound annual rate of 2.2% over the next 5 years, the banks and industry as a whole is well capitalised. Even though there is marginal drop in the profit levels due to the reduction in the margin and decrease in the revenue, the overall profitability for the industry in addition to the overall profitability of the individual banks stayed strong. On the other hand the global banks from the other nations have been facing terrible losses in their country of operations. In view of the fact that the Australian banks including the Bank of Queensland was guarded from spiralling global funding costs by the wholesale funding guarantee of the Federal Government, it can be said that from the industry outlook the company is quite well settled.
Bank of Queensland is one of two locally based banks in Queensland. The Bank that was set up in the year of 1874 as The Brisbane Permanent Benefit Building and Investment Society got converted into a trading bank in the year 1942. The company is quite resourceful due to the fact that it is the 5th largest listed company in Queensland which has a current market capitalisation of around Australian $ 1 bn. BoQ has more than 1,700 ATMs. Of these 1,700 ATMs 1,000 are directly under the brand of BoQ. Apart from this the bank also has the 2nd largest bank deployment of ATMs in the country. The network of the ATMs currently consists of 450 in Victoria as well as 331 ATMs in NSW. Apart from the benefits of the branding, the transaction in the ATM also provides the bank with a valuable addition for the fee income base of it.
The bank is a smaller player in the home lending market of Australia. The domestic market share which the bank has is in the region of 2.5%. However the bank intends to increase this share to 5% in the next 3 to 5 years. As far as the market for new home lending in Queensland is concerned, the Bank holds as much as 14% of it, which is an increment from the 6% which was the share 3 years back. With the intention of complementing the branch network of the bank, it has been able to open 44 new OMBs throughout Queensland by August 2004. The company also has started opening a number of OMBs outside of Queensland as well in the regions of NSW, VIC, ACT and NT. This is helping offset BoQ decision in May 2004 to withdraw from the mortgage broker market, which at the time contributed 18% of the Bank’s new lending volumes (peaking at 22% during the year). With BoQ’s aggressive expansion strategy, it is expected that the volumes from the interstate and continuing Queensland expansion will replace the volumes previously driven by the mortgage brokers. Hence it can be said that from the point of view of the resources also the bank is currently in safe water.
The high quality human resources of the company is driven by the organizational culture and senior management ably. The higher management of the company provides these people with the strategies to drive the business. The company has ensured that the employees are the major assets for the company. With the intention of achieving this, the company has prepared the culture of the institution in such a way so that it can capitalize on the knowledge and idea diversity from the employees. The company has been able to infuse diversity in the innovation team as well which in turn can create a number of innovative ideas.
One of the biggest strengths of the company is the ATM range of the bank. BoQ has more than 1,700 ATMs. Of these 1,700 ATMs 1,000 are directly under the brand of BoQ. Apart from this the bank also has the 2nd largest bank deployment of ATMs in the country. The network of the ATMs currently consists of 450 in Victoria as well as 331 ATMs in NSW. Apart from the benefits of the branding, the transaction in the ATM also provides the bank with a valuable addition for the fee income base of it.
The company has a significant brand reputation as well as market reach on a national basis and in the other markets in which it has its operations. The company has received a number of awards which have increased the brand reputation in a very strong and positive way. According to various researches, BoQ is one of the most valuable brand in Australia and New Zealand. This positive reputation has been able to influences the consumers decision making for the bank’s products and services.
The company has a diversified the business in various different types of banking which helps the bank in carrying out the business in a very efficient and effective manner.
The bank also has a very strong base of customers which is in the region of 650,000+ customers.
The bank is also making outstanding usage of the information technology in the banking processes which has provided it with a competitive advantage.
The most important weakness of the bank is lack of international presence of the bank, which is acting as a barrier for profit maximisation for the bank.
The opportunity can be expansion to various Asian countries including India and China which are growing at a very fast pace in terms of the banking industry.
Increasing competition from the international banks can act as threat for the company.
Following is a list of direct rival banks for the company:
- National Australia Bank Limited
- Commonwealth Bank of Australia
- Australia and New Zealand Banking Group Limited
- Westpac Banking Corporation
- Bank of Western Australia Ltd
- George Bank Limited
There are a few recommendation based on the analysis of its strength and weakness, and if these could be worked up, the company can prove to be the best option for its customers (Afuah, 1995).
- It should look for increasing its demand through its innovative ways of technology integration in banking.
- It should also look for concentrating on providing Best customer service in Australia
In future the company should be surpassing the expectations of increasing demand which customers have. Deep collaborative relationships should be allowing it to surprise customer with innovations that make both its customers and its own business successful.
“Bank of Queensland Annual Report 2011”. Bank of Queensland. 31 August 2013. Retrieved 23 May 2014.
Johnston, E. 2011. “Bank of Queensland profit stung by bad debts”. Fairfax Media