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Bank of Queensland

From its birth in 1874, the bank had come a long way.  It began to trade its stocks in Australian Exchange, competed as a major regional bank and became one among the few banks which had the highest growth rates (Bank of Queensland, 2009).  In recent years, the bank was expanding through purchase of mostly non-competing companies.

This strategy made their business compete in other banking services such as insurance, equipment leases, wealth management consulting and credit card operations.  Acquisitions also transformed the bank’s retail and commercial banking through increased ATM presence across the country and extended service of home loans to commercial customers.

Australian Banking Industry

A recent news report quoted that the industry is “as strong as a brick outhouse” (Maiden, 2009).  Local banks were relatively smaller in size compared to their international counterparts which made the former had a better chance of escaping the global financial crisis.  Home lending and narrow risk exposure were safer indeed.  With friendlier regulation support such as low-interest setting and restriction on four pillar merging policy, the country’s banking industry and financial sector as a whole was not as vulnerable as the United States or elsewhere.

There are four major banks that comprised at least 70% of the total assets of the industry but regional banks such as Bank of Queensland had really became the focal point of industry growth.  However, even with this relative stability, the Big Four’s profits were still plunging while bad loan provisions were still soaring (Greenwood, 2008).

Operations and Logistics of the Bank of Queensland

Owner-managed branches triggered the national expansion of the bank.  It allows each branch to customized their decisions and policies based on their local market preferences (Bank of Queensland, 2009).  Seeing customers with different needs and values is important in inter-regional and national success of its operations.  Aside from this, the bank is also ensuring accessibility to their services by operating for longer hours and presence of ATMs nationwide.  Customers are also treated alike based on their necessities with no bias.

As a result, customer experience is enhanced resulting to bank loyalty and word-of-mouth marketing.  Key policies, however, remains under the umbrella of the corporate headquarters in the aspects of branding, credit regulation and critical lending procedures.  This face-to-face customer service will not only alleviate the common perception of people on banks as profit-oriented entities but also will increase the competitive advantage of the bank against the Big Four.

Weaknesses and Competitors

Owner-managed branches and face-to-face service are types of customer relationship management that fairly difficult when viewed in the lens of the company’s aggressive vertical acquisition strategy.  Procedures should be simplified, straightforward and standardized to enhance smooth integration of new businesses.

With varying demands, customers may complicate the interactions of ownership, financing, management, employee and supplier in the integration (Hitt, Hoskisson & Ireland, 2003).  In addition, acquisition is expensive and risky that its success in making sure that developing synergies and value the fastest is vital in the undertaking.  Periodic changes to plan and original procedures because of being customer-conscious is the reverse of the goal.

Growing geographically, the bank is exposing to fierce competition from the Big Four and regional banks like St George while operational growth made them target of international banks (Greenwood, 2008).  Queensland and nearby regions are its main market but beyond may not only make their customer-oriented strategy weak and costly but also their brand will be eaten-up whole by Big Four.

Global expertise and experience are needed to compete in knowledge-based asset management consulting.  It is a doubt that the bank has an advantage to serve key clients for this purpose as its market base is focused on regional customers and not large companies.  Also, the bank’s home lending and insurance business cannot compete with bigger companies that have higher asset base.  If it insisted, instability and risks would hamper the growth of these businesses.

 Opportunities

The bank can take advantage of growing vertically not only to prevent excessive risks on investing on one business but also profiting from the market that the Big Four is loosing (Hitt, Hoskisson & Ireland, 2003).  They can capitalize on this by using their remarkable customer service strategy which relies on quality not quantity.

Having limited resources to push their brand by persistent marketing and ads, building lasting relationship with customers and increasing presence nationwide is obviously a right direction for the bank.  Its consulting capabilities should maximize their customer’s experience rather than serving as one of profit areas among its businesses.  Its unique marketing and growth structure is its formidable tactic to surpass competitive entrants particularly in Queensland and nearby markets.

Stepping foot on the national level is not a bad idea as long as they are doing it slowly and smoothly.  Prevent acquisitions that are too large, complex and entails quick adoption to environment to be successful.  Stiff competition would make this move futile and overall strategy will be at greater risks.  Growing region-by-region is a better option as it is in collaboration with their customer strategy.

The bank can also capitalize to friendlier regulation.  Big Four cannot grow no longer which creates an opportunity for small players to compete on individual business areas.  Finally, spreading its business in a wide variety of areas such as insurance, credit cards and leasing is one way to prevent corporate losses due to recession on one business such as home loan.

Bibliography

Bank of Queensland (2009). Bank of Queensland Official Website [Internet], Available from: < http://www.boq.com.au/>

Greenwood, J. (2008). Australian banking sector crumbles [Internet] <http://business.smh.com.au/business/australias-banking-sector-is-as-strong-as-a-brick-outhouse-20090506-avdj.html?page=1>

Hitt, M., Hoskisson, R. & Ireland D. (2003). Strategic Management: Competitiveness and Globalization. 5th Ed. Thomson Learning, Singapore: South Western.

Maiden, M. (2009). Australia’s banking sector is as strong as a brick outhouse

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[Internet], Available from: <http://business.smh.com.au/business/australias-banking-sector-is-as-strong-as-a-brick-outhouse-20090506-avdj.html?page=1>

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