Free Essay on Bendigo and Adelaide Bank External Environmental Factors

The bank was established in 1858 on the Bandigo goldfields to assist in improving the condition for thousands of migrants while looking for fortune through the Bendigo Mutual Permanent Land and Building Society. The bank has got over $65.7 billion in asset management and $4.8 billion on market capitalization. This paper looks at the external environmental factors that affect the operation of Bendigo and Adelaide Bank Limited

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Political factors

Political factor is a key determinant of the long-term profitability of Bendigo and Adelaide Bank Limited in certain markets or country. Currently, the bank operates in more than a dozen countries hence it is exposed to different political system risk and political environment. For the bank to achieve its objective in the dynamic banking industry in different countries, it needs to diversify its political environment systematic risk (Samad 2017). It can identify the risk by analyzing the following factors before investing in a certain market: Political stability, level of corruption, interference, and bureaucracy in the banking industry by the ruling government and the legal framework set for contract enforcement.

Economic factors

To understand the aggregate investment and aggregate demand in any economy the macro environment factors like interest rate, saving rate, foreign exchange rate, inflation rate and economic cycle need to be determined. Also, the microenvironment factors like competition norms have got the direct effect on the organization competitive advantage (Samad 2017). The bank can utilize the economic factors like inflation, growth rate and industry economic indicators like consumer spending and industry growth rate in a country to assist in forecasting for the growth trajectory of the sector as well as the organization. The economic factors that the bank need to consider including economic system type that is operational in the country, the intervention of the government in a free market and stability and exchange rate of the currency in the host country.

Social impact

In an environment, the organization culture is affected by the society way of doing things and culture. The marketer at the bank needs to understand the shared attitude and the beliefs so that they have the accepted way to design the marketing message for its consumers in the bank. Bendigo and Adelaide Bank Limited should analyze the following PESTEL analysis concerning social factors: skill and demographic level of the population, the hierarchy, class, and power structure of the society, education level and standard within the banking industry, culture and the entrepreneurial spirit in the society (Stubbs & Cocklin 2007).

Technological factors

Most of the industries across the board are affected by the disruption in technology. Over the last few years, many industries have been transforming at a fast rate that the players are not able to cope with changes. For a firm to survive, it does not need to carry out technical analysis within the industry but also looks at the technological disruption speed in the industry. When the speed is low, it gives more time while fact speed on technological disruption will give minimal time for the firm to cope (Justino & Tengeh 2016). The bank will need to understand the following effects on its technological analysis. Recent development on technology that the competitors are investing, the impact on its cost structure within the banking industry, the impact of technology on the product offered the diffusion rate of technology and value chain structure impact on the banking sector.

Conclusion

Bendigo and Adelaide Bank Limited have to consider all the external environmental factors in its operation so that it can achieve it business efficiently in all the locations. The elements described above are essential in ensuring that the bank fulfills its objective in ensuring customer satisfaction through customer service and provide products that match the needs and wants of the customers.

References

Bendigo and Adelaide Bank. n.d. Bendigo and Adelaide Bank - About Us. Retrieved from http://www.bendigoadelaide.com.au/public/about_us/index.asp

Justino, M. V., & Tengah, R. K. 2016. Role of external environmental factors in the failure of small enterprises in Angola. Environmental Economics, 7(2), 86-96. doi:10.21511/ee.07(2).2016.9

Samad, A. 2017. Are Bank Profits Determined by Bank-Specific Factors or Bank External Factors? Evidence from Malaysian Banks. Journal of International Business and Economics. doi:10.15640/jibe.v5n1a1

Stubbs, W., & Cocklin, C. 2007. Cooperative, community-spirited and commercial: social sustainability at Bendigo Bank. Corporate Social Responsibility and Environmental Management, 14(5), 251-262. doi:10.1002/csr.130