Marketing Plan for Westpac Corporation - Case Study Example

CHARLES STURT UNIVERSITY FACULTY OF BUSINESS GLOBAL MARKETING MKT 550 - ASSIGNMENT 03 WESTPAC EXPANSION - WALES Name: Thanh Loc Do Student ID: 11536497 Table of Contents Table of Contents 2 2 2.0 SITUATION ANALYSIS 4 3. SWOT ANALYSIS 9 Appendix 13 Executive Summary Australian banks retained a high level of stability during a global financial crisis that led to the collapse of numerous banks in the UK and US. Data from 2015 continues to show that Australian banks are the most profitable in the developed world. The stiff competition among the leading Australian banks means that international markets offer remarkable growth opportunities. Wales and Australia share comparable political, legal, and social environments. This marketing plan provides an analysis of Wales, Westpac’s asses and skills, and recommendation for the organisation to expand into the market through a Join Venture and acquisition option.The target market is the retail and business banking segment, with the focus being on small and medium sized enterprises. This market will be comprised of 1.3 million workers and approximately 210,000 businesses. Westpac’s main competitors will be HSBC, Barclays, and the Royal Bank of Scotland as they have existing operations in Wales. The objectives of the marketing plan are: - Establish on Jan 2016 - with 5 branches in the 1st year- in the most busiest areas: Cardiff, Swansea, Carmarthenshire, The Vale of Glamorgan, Flintshire. (South East, South West, and North) - Open 3 branches a year on year 2 and 3 on the another areas (includes the Mid Wales - Powys) - Top 3 of the best financial service for SMEs in Wales after 3 years operation Predict outcomes: 1.0 INTRODUCTION It is an acceptable fact that the global financial crisis had a devastating impact on the global banking sector. While Australian banks suffered from the crisis, they retained a high level of stability when compared to UK and US banks. This stability can be attributed to factors such as a culture of prudent lending, high levels of capitalisation, sound corporate governance, and effective regulation of the financial system (Hawtrey, 2009). These policies allowed Australian banks to get through the financial crisis without having to receive support from the government. According to Palmer (2015), the top four Australian banks – Westpac, ANZ, Commonwealth Bank, and NAB – were ranked as the most profitable banks in the developed world in 2015. The profitability and soundness of these banks give them a strategic competitive advantage that can allow for expansion into other global markets. Indeed, Westpac serves more than 1.3 million consumers and small businesses in New Zealand through an extensive network of ATMs, branches, and online banking. The purpose of this report is to analyse the business environment in Wales, the banking market in Wales, existing competitors, Westpac’s organisational assets and skills, also a SWOT analysis of Westpac. It then provide alternatives strategies, recommendations for Wespac in expanding to the retail banking industry in Wales. 2.0 SITUATION ANALYSIS 2.1 Business environment 2.1.1 Political and Legal Analysis Multinational corporations typically enjoy strong bargaining positions when negotiating to enter new markets. However, they lose this bargaining power and get exposed to political risks once they make their investment (Jiménez, Luis-Rico, & Benito-Osorio, 2014). An expansion into Wales will be associated with minimal political and legal risks given that the two countries use the same political system. Australia as a whole and the UK have a long-standing relationship with the two countries sharing a sovereign leader. Additionally, the Australia and Wales share the English common law system. Therefore, Westpac should expect to work under a similar political-legal environment, with the only differences being the degree of devolution. The desire for Welsh Independence is a political factor that might affect businesses seeking to do business in the region. However, the support for independence has fallen to very low levels after the failure of the Scottish referendum (BBC, 2014). The other relevant factor is the tense relationship between the UK as a whole and the European Union, which is evidenced by the upcoming referendum on the UK’s membership of the EU. At present, Wales can be considered as part of the European Political Union that allows the free movement of capital, goods, and services. This is an attractive factor since a multinational firm that sets up operations in Wales will gain access to the broader European market. 2.1.2 Economic Analysis According to the Welsh Government (2015), its economy has generally kept up with the pace of recovery in the UK with Wales performing better than the UK in areas such as income. Work is a critical driver of economic growth for the Welsh region. The region has an employment rate of 69.3%, meaning that 1.3 million people between the ages of 16-64 are employed. In terms of trends, there have been insignificant changes in the employment rate over the short and long terms (Welsh Government 2015). When it comes to poverty levels, 23% of individuals have an income that falls below 60% of the median income in the UK. It is worth mentioning that Wales does not have the freedom to create its policies when it comes to fiscal and monetary policies. The Welsh GDP is generally lower than that of Scotland and England, and it would have a deficit if not for finances from the UK government (Daily Post 2014). A complete devolution of fiscal and monetary policies would give the Welsh government the flexibility to tailor policies to the local environment (Daily Post 2014). Finally, a move to the UK would expose a multinational firm to foreign exchange risks, a risk that would be considerable for a bank seeking to transact on a large scale. One of the key features of the Welsh economy is its reliance on small and medium-sized enterprises (SMEs). According to The Welsh Conservatives (2013), SMEs account for over 99% of active businesses in the country. However, they faced considerable challenges when it comes to accessing finance. There were 209,200 SMEs in Wales, with 199,300 being micro businesses that employ 615,000 people or 60.5% of the entire private sector workforce (Welsh Conservatives 2013). This shows that growth in the Welsh economy is reliant on the success or failure of SMEs. 2.1.3 Social Analysis Differences in national cultures have implications on firms conducting business across state borders. As in the case of the political environment, Wales and Australia share similar cultures in terms of language and communication systems, values and belief systems, and material culture and artefacts. When it comes to the population, the 2011 census revealed that the country had a population of 3.06 million people, indicating a 5.3% increase over a decade. The country has an aging population, with projections showing that the number of people over 65 years will rise from 19.1% of the population in 2012 to 26.4% of the population in 2037. The number of those under the age of 16 will remain constant while the working population will reduce from 62.8% to 56.4% of the population (Welsh Government, 2013). This will create enormous challenges as there will be a high dependency ratio in Wales. 2.1.4 Technological Analysis Technology is a factor that is transforming the international business environment at a dramatic pace. In the case of the banking industry, technology allows banks to serve millions of customers without having to invest in physical branches. Wale’s membership in the United Kingdom gives it access to some of the most advanced technologies in the world. For instance, Wales has the top availability of superfast broadband of any of the devolved nations with 80% of businesses having access to the broadband (Welsh Government 2015b). The innovative entrepreneurial culture in Wales has meant that businesses have embraced technology to save on costs and to improve their efficiency. World class education facilities are also ensuring that the Welsh workforce will continue to leverage emerging technologies in business settings. 2.1.5 Environmental Analysis The EU and UK Governments have set greenhouse gas emission targets that mandate the Welsh government and businesses to move towards clean energy. Wales is located in a natural environment that gives it easy access to renewable sources of energy like wind and tide. In 2011, gas was still the primary source of energy for electricity generation. Importantly, the contribution of renewable energy to the energy mix has risen steadily to 7.9% in the period between 2004 and 2011 (National Assembly for Wales Commission, 2013). The location coupled with support from the government will cement Wales’ position as one the leaders in sustainability. Should Westpac enter the Welsh market, it will need to make drastic changes to its marketing and financial practices in order to attain the same level of sustainability. 2.2 Market Analysis Westpac will target the retail and small and medium-sized business segments of the banking industry. As stated, Wales has 1.3 million individuals who are between the ages of 16-64 and employed. This will form Westpac’s target retail market. The evaluation of the business environment showed that the nation’s success is driven by around 210,000 SMEs that employ over 600,000 people. The financial crisis impacted banks in the UK more than Australian banks, meaning that these SMEs have difficulty accessing finance. These businesses will be the primary target for Westpac Bank. When it comes to the future outlook, the reduction in the size of the working population will have minimal impacts on the retail operations of Westpac. This is because the retirees will still need financial services. When it comes to the SME target market, the Welsh entrepreneurial spirit will guarantee high numbers of businesses that require loans for growth. When it comes to distribution channels, 80% of Welsh businesses have access to superfast broadband, with individuals having similar access levels. This will allow Westpac to utilise online banking as the primary means of serving its retail and business customers. The profitability of Westpac and the cost savings from reliance on online banking will allow for competitive pricing strategies. This will permit the bank to gain a foothold in the market while the local banks continue to recover. 2.3 Competitor Analysis As stated, there are four Australian Banks that are in a strong financial position. Westpac Bank faces tough competition from ANZ, Commonwealth Bank, and NAB when it comes to finding ways to expand their business. The size of the Welsh Market might be small for some of these competitors, but it offers Westpac the opportunity to grow its retail and small business portfolio by targeting 1.3 million individuals and over 200,000 small and medium-sized businesses. Apart from the Australian competitors, Westpac will also have to compete with existing banks in Wales and the UK as a whole. HSBC, UK’s largest bank, has extensive operations in Wales. Its competitive advantage is its knowledge of the Welsh banking sector, but the bank has had to restructure and concentrate on Asian markets (Barry, 2015). The Royal Bank of Scotland also has operations in Wales, but its position was weakened by the global financial crisis and the subsequent bailout by the UK Government limited its scope of operations (Barry 2015). Barclays Bank is the other major competitor that has acquired much experience in diverse markets. As in the case of HSBC and the Royal Bank of Scotland, Barclays is closing many of its branches in the UK (Silk 2015). Additionally, the firm’s reputation has suffered considerably from its participation in fraudulent activities. It is evident that the competitors lack a sustainable competitive advantage, meaning that a foreign bank in a stronger financial position would be able to gain market share with relative ease. 2.4 Organisation Assets and Skills Westpac is Australia’s oldest bank and is part of the four biggest banks in the country. The firm operates using a divisional structure whereby five key divisions function independently. The division that is of concern in this report is the Westpac Retail & Business Banking group that serves businesses and individuals in Australia. The firm has successfully expanded into the New Zealand market, indicating that it has experience in international marketing. The firm has also managed a representative office in England since 1853, demonstrating that it has sufficient knowledge of the UK business environment (Westpac, 2015). This should allow for the offering of banking services to UK nationals who do not have interests in Australia or New Zealand. The availability of superfast broadband connections in Wales will allow Westpac to leverage its technological skills and knowledge to serve Welsh businesses and individuals. The company’s illustrious history is also a key attribute in a world where financial organisations are losing their reputations. Finally, the most vital skill is Westpac’s ability to generate returns in economic conditions that are unfavourable to UK and US firms (Hawtrey, 2009). This skill gives Westpac a sustainable competitive advantage that can lead to growth in the Welsh market that is being ignored by local banks. 3. SWOT ANALYSIS Strengths Westpac continues to generate profits in an economy that is still recovering Westpac subscribes to sound lending practices that reduce risk and losses. The bank has considerable experience in business banking The firm’s long history and the shared culture will facilitate rapid growth Weaknesses Westpac faces competition from local and international banks Opportunities Thousands of individuals and businesses in Wales lack access to finance EU membership gives Westpac access to a wider market Threats The political environment poses significant risks that are associated with Welsh independence and EU membership Regulatory changes by the EU can have far-reaching impacts on the bank Exposure to foreign exchange risks An evaluation of the SWOT analysis shows that the strengths and opportunities outnumber the potential threats and weaknesses. This confirms that Wales has a favourable business environment and that there is a ready market for retail and business banking. The SWOT analysis also indicates that the main competitors do not hold a sustainable competitive advantage that would hinder the growth of a new entrant. It is recommended that Westpac undertake an evaluation of entry strategies since this situation analysis has concluded that Wales is a favourable destination for Australian businesses. 4. EVALUATION OF ALTERNATIVE STRATEGIES 4.1 Alternative Market Entry Strategies With the rising level of competition, Westpac needs to consider cooperate with another bank or decide to operate a fully owned institution at Wales as it alternative strategies for entering into the market. To explore external markets adequately, there is need to create a positive brand among the potential clients. However, such factors might not be achieved considering the scope of operation and knowledge of the banking market in Wales. Westpac Corporation might consider cooperating with renowned banks to create a co-brand or image that would assist in attracting more clients. The strategy could offer numerous challenges to Westpac especially if the chosen partner does not share the ideologies. On the other hand, choosing to operate as a single entity might offer several benefits associated with efficient, effective, and reliable decision-making process. Managing a fully owned bank in a new market could pose several challenges like determining the actual needs of the clients, understanding the economic condition, and market trends. It is important to note that inter-firm management entails both cooperation and competition (International Monetary Fund, 2012). As a result, Westpac should consider cooperating with a financial institution with a wider operational scope with the aim of exploring the needs and changing priorities of its market targets. 4.2 Alternative Target Market, Positioning and Marketing Mix Strategies The economic condition of Wales is shrinking with more people opting to acquire loans from banks with low interests. Therefore, Westpac should target retails and small businesses seeking to establish a reliable financial base. With more people investing in retail shops and small businesses, they are seeking financial institution to offer advices and other financial related services like loans to boost their businesses. Such activities require a bank that is ready to negotiate with the clients irrespective of their financial bases. Besides, more clients are seeking affordable and convenient banks as partners; Westpac needs to consider such market segments. There are several banks operating in Wales, which makes it important for the bank to define its market position (Edwards, Jennings, Australian Strategic Policy Institute, & Centre for International Governance Innovation, 2014). Westpac positions itself in the market based on the quality services it offers. These services are available to clients at considerable costs. Besides, the bank offers banking services, financial management, low rate credit cards, and insurance services to meet the needs of the clients. As a result, the market targets are able to acquire most of the services they need. These factors offer the bank the best position strategies of competing against the giant banks. In relation to the marketing mix, the bank mainly offers varied services relating to banking activities and financial management. The prices of these services depends on the nature of service sought by the clients and the amount of money involved in the transaction. To compete effectively with other banks, there is need to ensure that the costs are considerably affordable to most of the clients depending on the market segment involved. Since the bank requires exploring most the components of the market segments, there is need to have more branches to cater for the rising demands for the financial services among the retails and small businesses. Effective distribution of the branches in various places in Wales would ensure more clients access these services (Keating, Quazi, Kriz, & Coltman, 2008). With the rising level of competition, promotion is another component of marketing mix that would help cushion market penetration. Offers might also attract more clients. Target market offers the best marketing strategy as it helps in exploring the needs of the clients. 4.3 Alternative Generic Strategies The aim of every business opportunity is to offer services that meet the needs of the customers. According to the Porter’s Generic Strategy model, most businesses aim at acquiring competitive advantage by applying marketing strategies that would reduce the number of entries into the market while offering the services at considerable expenses (Diamond & Liddle, 2012). In relation to cost, Westpac needs to determine the lowest used to offering the services and apply it across the bank to attract more clients. It is important to note that there are several banks within Wales and each is competing to be the leader. Therefore, services differentiation plays a crucial role in the distinction of services offered by the bank and other competitors. Besides, differentiation involves designing criteria of offering the banking services that is different from others to make it easier for clients to identify the bank and its associated activities. Such strategies would help in improving organizational position within the banking industry. Meeting the needs of all the clients might not be easier; however, upon identification of the target market, all the marketing strategies need to focus on the identified targets and positively fulfil their needs. In such cases, cooperation with another bank would offer the institution the opportunity of identifying the needs of the clients and establishing the right tactics of delivering the services to the target groups (Australia & Chapman, 2004). Integrating both differentiation and focus would help improve the current competitive advantage of the bank. With increasing level of competition, Westpac needs to differentiate itself from others through provision of quality services that meets the specific needs of the customers and focus mostly on the target market. 4.4 Preferred Strategy Market entry To ensure effective and efficient performance, the bank should take the join venture with one bank which has good resources, especially the distribution channel. After a year, Wespac could consider to acquire that bank and even another banks to strengthen its branding, and be able to explore new markets in areas that other banks consider less profitable and unproductive in terms of the number of clients seeking financial services (second target market). Target market The target market is retail, small and medium size business who have difficulty in accessing finance after the UK financial crisis. Those SMEs mostly locate in urban areas (South West, South East and North) Positioning strategy In relation to the other competitors, Westpac boasts of provision of quality services that meets specific needs of the clients. Moreover, since the bank seeks to explore the needs from the clients operating retail shops and small business with low returns and financial base, the cost of offering the services should be considerable affordable (Millmow, 2010). Thus, Wespac will be a friendly and fast (in process), offers a wide range of products at a affordable fee and fixed rates. Marketing mix The marketing mix will combine 7P’s: offers wide range of products at a affordable fee which depend on the financial status of the clients in which most the retailers and small business entities with insufficient financial background (Churchill & Frankiewicz, 2006), cover most of important areas, provides personal selling, professional staffs and friendly processes, with clear financial reports and punch lines. 5. OBJECTIVES The mission statement of the Westpac Banking Corporation is to be one of the world’s great service companies that assist clients, communities, and people to succeed and grow (Wespac Banking Corporation, n.d). To achieve such vision, the objectives of the bank include: - Establish on Jan 2016 - with 5 branches in the 1st year- in the most busiest areas: Cardiff, Swansea, Carmarthenshire, The Vale of Glamorgan, Flintshire. (South East, South West, and North) - Open 3 branches a year on year 2 and 3 on the another areas (includes the Mid Wales - Powys) - Top 3 of the best financial service for SMEs in Wales after 3 years operation See appendix 1 for Active Business Enterprises by area and year 6. RECOMMENDED STRATEGY Market entry strategy As Sturm & Williams (2004) stated that most banks consider exploiting urban markets with giant business organizations due to stable economic conditions in such areas, it is recommend that Wespac enter Wales as a join venture with another bank. The join venture reduces the capital and other resource commitment that is required, involve a spreading of risks (Fletcher & Crawford, 2013, p.274), provide Wespac a stable initial step to the new market. After a year, Wespac could consider to acquire that bank and even another banks to strengthen its branding, and be able to explore new markets in areas that other banks consider less profitable and unproductive in terms of the number of clients seeking financial services (second target market). Target market and Position strategy The target market is retail, small and medium size business who have difficulty in accessing finance after the UK financial crisis. Those SMEs mostly locate in urban areas (South West, South East and North). The positioning strategy places Wespac as a friendly and fast (in process of services), offers a wide range of products at a affordable fee and fixed rates. Marketing mix strategy Westpac bank offers variety of services to the clients ranging from banking to financial management. To create a sustainable competitive advantage, the bank should consider the components of the marketing mix. The price of offering the services depends on the prevailing economic conditions and willingness of these business entities to invest in the bank. Moreover, the bank needs to ensure that these services are readily available in all places within the chosen market segment (Australia & Thomson, 2008). With the shrinking level of the economy of Wales, most of those operating smaller businesses do not see the need to invest banks. Therefore, promotion activities would assist in altering their beliefs and enhance the scope of operation of the bank. In relations to people, the bank should consider employing young, energy, and committed staff who would help to enhance organizational performance. Besides, the processes involved in the provision of services should be standardized to meet the needs of the smaller businesses. The institution should also consider using an effective communication strategy to reach more clients with the information. However, it is important to note that communication method might be costly depending on the channel used. 7. Economic Evaluation Sales forecast assumptions Westpac Corporation will be opened annually and the sales are expected to increase by 1% each year of operation. All the calculations are done in dollars ($). In order to ensure the financial stability on Westpac Corporation, the corporation has a reserve ratio of 20% Market share, Westpac Corporation is worth $1,000,000 investment as the initial capital and all the assumptions are calculated. Pre operation cost. NO. DESCRIPTION AMOUNT ($) 1 Transport 10,000 2 Market research 15,000 3 Registration 4,200 4 License and permit 5,000 5 Fittings 16,500 6 Photocopying 500 TOTAL COST 51,200 NO. DESCRIPTIONS AMOUNT ($) 1 Stock of raw materials 271,500 2 Stock of finished goods 293,000 3 Debtors 110,000 4 Cash 125,000 TOTAL WORKING CAPITAL 800,000 ITEM AMOUNT ($) Sales Depreciation Gross profit 3,950,000 1,464,000 2,486,000 Expenses Wages Rent Water Telephone Electricity Advertising Stationery Postage Transport Insurance Credit risk (Impaired) Other liabilities 1,354,200 60,000 6,000 7,200 5,000 20,000 1,000 950 120,000 5,000 120,000 10,000 Net profit before tax Tax 16 776,650 124,264 NET PROFIT AFTER TAX 652,386 Profit and loss account for the yesr ending 30 December 2016 ITEM AMOUNT Sales Interest on loans/taxes Gross profit 4,740,000 1,756,800 2,983,200 Expenses Wages Rent Water Telephone Electricity Advertising Stationery Postage Transport Insurance Interests on loans Repairs 1,354,200 60,000 7,200 8,640 6,000 24,000 1,200 1,140 144,000 5,000 120,000 12,000 Net profit before tax Tax 1,239,820 198,371 NET PROFIT AFTER TAX 1,041,499 Profit and loss account for the year ending 30 December 2017 ITEM AMOUNT Sales Investment securities Gross profit 5,688,000 2,108,160 3,578,840 Expenses Wages Rent Water Telephone Electricity Advertising Stationery Postage Transport Insurance Interests on loans Repairs 1,354,200 60,000 8,640 10,368 7,200 28,800 1,440 1,368 172,800 5,000 120,000 14,400 Net profit before tax Tax 1,794,624 287,140 NET PROFIT AFTER TAX 1,507,484 Projected cash flow YEAR ONE MONTHS JAN FEB MAR APR MAY JUN JULY AUG SEP OCT NOV DEC Beginning balance --- 77,780 96,790 123,99 126,521 130,435 126,521 198,750 250,000 359,527 465,230 543,126 Add cash sales 400,000 420,000 450,000 465,000 480,000 520,000 600,000 750,000 790,000 850,213 900,000 1,000,000 debtors 50,000 12,000 20,000 26,000 30,000 45,000 57,000 60,000 50,000 30,000 40,000 25,000 CASH RECEIPTS 450,000 509,780 566,790 634,399 636,521 695,435 802,000 1,008,250 1,090,000 1,239,740 1,405,230 1,568,125 CASH PAYMENTS Purchases 150,000 180,000 220,000 240,000 260,685 289,968 340,907 449,888 438,257 433,744 490,313 528,115 Creditors 3,900 4,000 4,070 4,100 4,000 3,840 4,200 4,190 4,050 4,160 4,700 4,790 Wages 112,850 112,850 112,850 112,850 112,850 112,850 112,850 112,850 112,850 112,850 112,850 112,850 Rent 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 Water 400 450 470 410 520 490 535 500 498 535 571 608 Telephone 500 800 570 600 605 615 595 605 600 620 640 670 Electricity 350 380 400 430 420 450 395 425 390 400 450 510 Transport 12,000 8,000 9,000 11,000 10,000 12,300 10,250 9,750 10,300 8,700 8,300 10,400 Stationery 120 80 95 70 88 72 108 72 85 70 53 87 Postage 100 85 90 90 75 80 90 70 50 70 90 60 Capitalisation 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 Repairs ------- ------ 2,500 ------ ------ 3,500 ------ ------ 2,250 ------ ------ 1,750 Advertising 5,000 ------ ------- 6,700 ------ ------ ------ 4,000 2,250 ------ 4,300 ------ Taxes 72,000 81,565 90,686 96,528 101,841 111,270 128,320 161,400 174,400 198,358 224,837 250,900 Depreciation ------ ------- ------ ------ ------ ------ ------ ------ ------- ------ ------- ------ TOTAL CASH PAYMENTS 372,220 412,990 443,491 487,778 506,086 550,435 603,250 758,750 730,473 774,510 862,104 95,740 NET CASH FLOW 77,780 96,790 123,299 126,521 130,435 145,000 198,750 250,000 359,527 465,230 543,126 652,386 ACCUMU-LATED CASH FLOW 77,780 174,570 297,869 424,390 554,825 699,825 898,575 1,148,575 1,507,805 1,973,035 2,516,161 3,168,547 NO DESCRIPTION YEAR 1 YEAR 2 YEAR 3 1 Water 6,000 7,200 8,640 2 Telephone 7,200 8,640 10,368 3 Electricity 5,000 6,000 7,200 4 Advertisement 20,000 24,000 28,800 5 Stationery 1,000 1,200 1,440 6 Postage 950 1,140 1,368 7 Transport 120,000 144,000 172,800 8 Maintenance 10,000 12,000 14,400 9 Tax 129,264 198,371 287,140 TOTAL COST 294,414 402,551 532,156 Total variable costs Total Contribution Margin Contribution margin = sales – total variable costs Year 1 3,950,000 -294,414 = $ 3,655,586 Year 2 = Contribution margin = 4,740,000 - 402,551 =$ 4,337,449 Year 3 = Contribution margin = 5,688,000 - 532,156 = $5,155,844 From the calculations, business projection is to continually make profit by Ensuring good operation strategies. Planning Assumptions Following the Westpac Corporation financial projection for the three years, is possible for the Westpac Corporation to continue generating revenues as the business to look for the cheapest means of penetrating in the market and find for better ways of eliminating its competitors in the market. The assumption is determined by returns on investment after the tax deductions. For the three-year projections, the percentage returns on investment will be as per the calculations. Return on Investments after tax Return on investment = Net profit after tax x 100 Total investments Year 1 = 652,386 x 100 1,000,000 = 65.2% Year 2 = 1,041,000 x 100 1,400,000 = 74.38% Year 3 = 2,586,000 x 100 3,028,000 = 85.4% Sensitivity Analysis While entering into new markets, it is important to note the business might incur prevalent losses or profits depending on the organizational underlying assumptions on the market structures. In addition, profitability and better performance of the banks has no connection with durations or scope of operation but the marketing practices put in place. Westpac considers acquiring Co-operative bank in its quest to meet the needs of its target then later after acquiring a better position, it would expand its share to Barclays bank. These activities would help increase its operational area since it would be offering ATM services and adequate branches. Market might be sensitive sometimes. For example, a well-established bank like Co-operative bank lost approximately 38,000 customers in the first half of 2014 due to involvement of its former chairperson in drug scandals. The incident led to a loss amounting to 1.5 billion pounds, which made it difficult to purchase hundreds of branches from the Lloyds Banking Group. However, HSBC has been one of the best banks in the UK with much exploitation currently on the Asian countries. With the Eurozone debt continuing to start infecting the region, its revenue generation is likely to fall as well. IMPLEMENTATION AND CONTROL Action Plan for Implementation of Recommendations In order to avoid an action plan that is failure oriented, it is important Westpac avoid those objectives, which are ambiguous and unrealistic. It is crucial that the plan prioritizes activities to achieve the outlined objectives. Prioritization involves dealing with urgent and important first in an efficient and effective manner. Most importantly is to avoid procrastination, that is, Westpac should begin formulation of an action plan immediately upon realization of the desired change. Furthermore, to avoid disappoint in the end, action planning requires commitment, perseverance, and progress review. A good action plan considers challenges it is likely to encounter; thus, it is important to develop a contingency plan if the plan is not yielding the targeted outcome. In addition, a good action plan understands organizational environment, integrates the views of the public while making decision, and clearly indicates evaluation and monitoring strategies. It is also important to develop methods for monitoring and evaluating the planned activities. It is from such background that the bank should consider having the project management team to assist in coordination of all activities involving the implementation of the project. Monitoring of action plan The market is becoming more sensitive that monitoring and evaluation of any marketing plan is crucial to ensure that the business is meeting its outlined objectives. In addition, to prevent duplication of responsibilities and confusions during the execution face, the management of Westpac needs have in place clear structure of the management team and their responsibilities. In the development of monitoring mechanisms and schedule, Westpac should integrate CREAM technique for monitoring activities. CREAM stands for Clear, Relevant, Economic, Adequate, and ‘monitorable’. Clarity relates to formulating monitoring methods, which are precise, and unambiguous. Monitoring mechanisms should be relevant in regards to the outlined action plan objectives. Furthermore, it is important take into consideration the economic factors like reasonable cost of acquiring data and monitoring activities. For efficiency and sustainability, during monitoring period, there should be enough information to provide basis for performance assessment. STRATEGIC PLAN Purpose To assist Westpac bank be one of the world’s great service companies that assist clients, communities, and people to succeed and grow KEY OBJECTIVES To establish on Jan 2016 - with 5 branches in the 1st year- in the busiest areas: Cardiff, Swansea, Carmarthenshire, The Vale of Glamorgan, and Flintshire. (South East, South West, and North) To open 3 branches a year on year 2 and 3 on the another areas (includes the Mid Wales - Powys) To top 3 of the best financial service for SMEs in Wales after 3 years operation MARKET DEVELOPMENT PROCESS IMPROVEMENT PEOPLE DEVELOPMENT SERVICES DEVELOPMENT INTIATIVES Expansion of regular market research Increase customer visits by the bank’s marketing team Reviewing of the customer service methods Implement lean processes Development and implementation of the supply chain strategy Implementation of personal planning processes Improving communication with the target group Increasing teamwork Identify unexploited market components by the competitors Expansion of services offered to reach more target groups Contingency Plans Poor implementation of the marketing strategy might result in negative results. Therefore, to prevent these results, it is significant that Westpac immediately employ corrective measures to remedy the prevailing situation. While taking corrective measure, the corporation needs to identify the specific stage and potential exposure pathways of the implementation process where the deviation occurred. Most problems associated with poor outcome of the project are underestimation of the budget cost, poor quality results and project scheduling, and out-of-scope monitoring. If there is poor time estimation, the project is likely to take longer time than the initially projected duration. The corporation should adjust the allocated time to ensure every activity goes as planned. While re-organizing the activities, it is important to include the public to create a pool of alternatives for quality and accepted decisions. Upon realization of deviation from the outlined activities, the bank should quickly adjust the scope of operations. It is important to practice accountability for the success of the process; therefore, Westpac should revise the project budget and update it while conducting a financial audit. REFERENCES ‘Record low’ back Welsh independence – BBC/ICM poll. (2014). The BBC. Retrieved 10 September 2015 http://www.bbc.com/news/uk-wales-29331475 2012 – based National Population Projections for Wales. (2013). Welsh Government. Retrieved 10 September http://gov.wales/docs/statistics/2013/131106-national-population-projections-2012-based-en.pdf Barry, S. (2015). HSBC is still in top 10 of world’s biggest banks, but only just. Wales Online. Retrieved 11 September 2015 http://www.walesonline.co.uk/business/business-news/hsbc-still-top-10-worlds-9544879 Company Overview.(2015). Westpac Group. Retrieved 12 September 2015 http://www.westpac.com.au/about-westpac/westpac-group/company-overview/about-us/ Hawtrey, K. (2009). The global credit crisis: why have Australian banks been so remarkably resilient?. Agenda: a Journal of Policy Analysis and Reform, 95-114. Invest Wales: A Vision for Welsh Investment. (2015). Welsh Conservatives. Retrieved 10 September 2015 http://www.welshconservatives.com/files/invest_wales_final.pdf Jiménez, A., Luis-Rico, I., & Benito-Osorio, D. (2014). The influence of political risk on the scope of internationalization of regulated companies: Insights from a Spanish sample. Journal of World Business, 49(3), 301-311. Palmer, D. (2015). Big four still most profitable: BIS. The Australian. Retrieved 10 September 2015 http://www.theaustralian.com.au/business/latest/big-four-still-most-profitable-bis/story-e6frg90f-1227419506560 Renewable Energy in Wales: In Figures. (2013). National Assembly for Wales. Retrieved 11 September 2015 http://www.assembly.wales/Research%20Documents/Renewable%20Energy%20in%20Wales%20in%20figures%20-%20Research%20paper-12082013-248986/13-059-English.pdf Silk, H. (2015). Concern for communities following dramatic bank closures. Wales Online. Retrieved 12 September 2015 http://www.walesonline.co.uk/news/wales-news/concern-communities-following-dramatic-increase-9881807 Superfast broadband availability grows in Wales. (2015b). Welsh Government. Retrieved 11 September 2015 http://gov.wales/newsroom/science-and-technology/2015/150806-superfast-braodband/?lang=en Welsh Economy: In Numbers. (2015). The Welsh Government. Retrieved 10 September 2015 http://gov.wales/statistics-and-research/economic-indicators/?tab=ei_home&lang=en Would independent Wales be a Celtic Tiger or economic basket case?(2014). The Daily Post. Retrieved 10 September 2015 http://www.dailypost.co.uk/business/business-news/would-independent-wales-celtic-tiger-6879353 Australia, & Chapman, G. (2004). Money matters in the bush: Inquiry into the level of banking and financial services in rural, regional and remote areas of Australia. Canberra: Joint Committee on Corporations and Financial Services. Australia, & Thomson, C. (2008). Competition in the banking and non-banking sectors. Canberra: Standing Committee on Economics. Churchill, C. F., & Frankiewicz, C. (2006). Making microfinance work: Managing for improved performance. Geneva: International Labour Office. Diamond, J., & Liddle, J. (2012). Emerging and potential trends in public management: An age of austerity. Bingley, U.K: Emerald. Edwards, L., Jennings, P., Australian Strategic Policy Institute, & Centre for International Governance Innovation. (2014). Facing west, facing north: Canada and Australia in East Asia: special report. International Monetary Fund, & International Monetary Fund. (2012). Australia: Financial safety net and crisis management framework: technical note. Washington, DC: International Monetary Fund. Keating, B., Quazi, A., Kriz, A., & Coltman, T. (2008). In pursuit of a sustainable supply chain: insights from Westpac Banking Corporation. Supply Chain Management-an International Journal, 12(4), 109-115. Millmow, A. (2010). The power of economic ideas: The origins of macroeconomic management in Australia. Acton, A.C.T: ANU E Press. Sturm, J., & Williams, B. (2004). Foreign bank entry, deregulation, and bank efficiency: Lessons from the Australian experience. Journal of Banking & Finance, 22(7), 99-105. Westpac Banking Corporation. (n.d.). Our strategy and vision | Westpac. Retrieved from http://www.westpac.com.au/about-westpac/westpac-group/company-overview/our- strategy-vision/ The Wesh Government. (2014 Nov 26). Active Business Enterprises by area and year. Stats Wales. Retried from: https://statswales.wales.gov.uk/Catalogue/Business-Economy-and-Labour-Market/Businesses/Business-Demography/activebusinessenterprises-by-area-year Fletcher, R., & Crawford, H. (2013). International marketing: An Asia-Pacific Perspective (6th ed.). Frenchs Forest Australia: Pearson Education The Wesh Government. (2014 Nov 26). Active Business Enterprises by area and year. Stats Wales. Retried from: https://statswales.wales.gov.uk/Catalogue/Business-Economy-and-Labour-Market/Businesses/Business-Demography/activebusinessenterprises-by-area-year Appendix 1 - Active Business Enterprises by area and year Source: The Wesh Government. (2014 Nov 26). Active Business Enterprises by area and year. Read More