Company: Westpac & commonwealth bank Requirements: 1. Perform a strategy analysi

Question

Company: Westpac & commonwealth bank

Requirements: 1. Perform a strategy analysis, including Porter’s ‘five forces’ framework for industry-level analysis, competitive strategy analysis of the firm-level analysis (incorporating the source of the sustainable competitive advantage), and Corporate strategy analysis for the two selected multi-business organisations (adding the benefits and costs to the companies separate segments) (35 marks) 2. Perform an accounting analysis that addresses the six (6) steps in performing accounting analysis of the five components of the financial statements for the two selected companies (35marks) 3. Evaluate the quality of the financial statements of the two companies. Are you are happy with their quality? If yes, why and if no, why not? (10 marks) 4. Choose one company (of the two selected companies) you decide to invest your $25,000 and identify how many shares this will purchase. Construct your conclusions to support your selection of that company. (20 marks)

Explanation / Answer

Westpac Banking Corporation Porter Five Forces Analysis:

New entrants in banking industry bring innovation and new and frugal ways of doing business and financial things, lowering their pricing and reducing costs. Hence, Westpac need to build economies of scale. Also need to build capacities and spend money on research and development to secure its competitive edge

2. Bargaining Power of Suppliers:

Suppliers in dominant position can decrease the profit margins. Hence, efficient supply chain needs to be built with multiple suppliers. New product designs using different material needs to encouraged

3. Bargaining Power of Buyers:

Higher bargaining power of their growing customers may increase their ability to seek increasing discounts and offers. Hence, rapidly innovating new and customized products, parallel building a large base of customers will reduce the bargaining power of the buyers

4. Threats of Substitute Products or Services:

Westpac will need to become more service oriented rather than just product oriented, by understanding the core need of the customer

5. Rivalry among the Existing Competitors:

Rivalry among the existing players can lower selling prices and decrease the overall profitability. Westpac can collaborate with competitors to increase the market size or either build a sustainable differentiation

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