Strategies For National Australia Bank

Implemented strategies by NAB

Discuss about the Strategies for National Australia Bank.

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In the present competitive businesses environment, development of effective strategy is crucial for the organizations to gain competitive advantage in the market. However, effective development of strategies depends on several factors including mission, vision and social responsibility of the organizations. Furthermore, organizations also have to focus on the internal and external environmental factors to implement strategies that can provide maximum benefits for the organizations. In this report, the focus will be on the National Australia Bank (NAB). The organization is founded in the year of 1982. Presently, NAB is regarded as one of the top four financial institutions in Australia. In fact, it is placed in the 21st position evaluated by market capitalization. On the other hand, NAB is ranked at the 41th place in terms of total asset in a financial institution ( 2016). Thus, it highlighted the fact that NAB has able to implement effective strategies in order to gain competitive advantage in the market. The organization has able to maintain a constant growth rate with utilizing innovative and unique strategies. However, few strategies of the organization have also faced lot of criticism. Therefore, the report will consciously try to include all the positive and negative aspects of the implemented strategies by NAB.

Mission statement of National Australia Bank highlights that the organization is focused towards providing selected financial and core banking services efficiently. Therefore, NAB has always focuses on providing the best professional services to all its customers in order to gain competitive advantage in the market. Furthermore, NAB has also tried to make a conscious effort in order to enhance the trust level of the customers so that they can able to take financial help from the organization without any hesitation. At the initial stage, NAB has tried to implement aggressive marketing strategy. NAB has acquired Northern Banks and Clydesdale bank in order to increase its penetration power in the market. In Australia, NAB provides several financial services including personal banking, business banking, MLC and NAB private wealth. NAB’s business strategies include programs that have the potential to support a more financially and socially inclusive society (Beecham and Chowdhury, 2012). Furthermore, NAB wisely manages its environmental footprints so that customers can easily manage their environmental risks for financial products and services. NAB’s business strategy also focuses on the effective utilization of stakeholder engagement process in order to mitigate any social, environmental and governance issues. Organization’s vision highlights the significance of maintaining proper relationship with all the stakeholders. Therefore, NAB’s business strategies include informal and formal engagement activities with all the stakeholders so that it can able to identify issues and also priorities them accordingly (Chowdhury 2012). In order to enhance the businesses of the organization, NAB has tried introduced internet based direct banking services. In fact, NAB has introduced a completely new branch of the organization namely UBank. The company’s business strategy includes development of clear objectives so that it can able to manage policies and procedures effectively. NAB strategy also includes development of effective communication process so that it can able to maintain effective customer relationship management process.

Prime two criticisms faced by NAB

As mentioned earlier, NAB has focused in utilizing aggressive marketing strategies at the initial stage. Therefore, NAB has utilized overseas acquisition strategy in order to increase its growth in the market. For that reason, NAB has acquires many foreign financial institutions. However, several studies have highlighted that overseas acquisition provides very few opportunities for the organization to evaluate corporate strategy for a long period of time. As per the article by Shamsuddin and Xiang (2012), the study of strategy generally focuses on the successful organizations and trying to evaluate the reasons for its success. Now, NAB’s strategy of acquiring overseas financial institutions has also created several controversies. For instance, it has been identified that Irish subsidiary of NAB had engaged in tax evasion schemes and overcharging from its customers. Therefore, investigation has mentioned that tax evasion and overcharging from the customer has breached the trust level. Furthermore, NAB had around $460 million write down value from its rights regarding capitalized mortgage services. NAB also has faced huge amount of criticism, as it has failed to maintain Australian Financial Standards. “Australian Prudential Regulatory Authority” (APRA) also has expressed its concern over many financial statements of the organization ( 2016). NAB also was alleged because of irregularities in the foreign currency training operation. Therefore, it has created negative impact on the foreign investment procedures. NAB had a loss of $270 million revenue in the month of January (Sussangkarn, 2012). Furthermore, NAB was accused by APRA for not implementing effective decisions regarding risk management procedures standards. On the other hand, Central Bank of China has utilized the plan of tightening the credit by enhancing the reserve requirements for the economy’s financial structure, performance level of NAB has decreased to a lower level. Thus, it can be identified that the prime reason for the criticism is the decreasing performance level of the National Australia Bank.

As per the article by Kaal and Painter (2011), it is necessary for the organizations to analyze all the external and internal market factors at the time of developing business decision strategy. Internal and external factors help organization to identify the potentiality of the market that can be helpful for the sustainability of the business. Furthermore, in order to fulfill the needs of the customers, it is necessary for the organization to understand the environmental condition of the market more effectively. PESTEL analysis can help organization to understand the situation of the market in a much more effective way. The PESTEL analysis is discussed as follows:

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Environmental analysis

Political factor:

Several rules and regulations have been imposed on the banking industry of Australia that is creating adverse impact on the financial management process. It can be assessed that high rate of interest is creating adverse impact on the capital investment. As mentioned by (2016) high rate of interest has created huge amount of challenges for the major financial institution like National Australia Bank, Commonwealth bank and Westpac. It has to be noted that NAB has created business partnership with other financial institutions to enhance the revenue level. However, complex political rules and regulations are creating problem for the financial institutions to increase its revenue level (International Monetary Fund 2012). Thus, political rules and regulations are creating adverse impact on the strategies implemented by the financial institutions in Australia.

Economic factor:

Increasing competition in the financial market of Australia has reduced the funding cost to large extent. As a result, banking organizations started to develop capital by enhancing its target. Worthington and Devlin (2013) highlighted Liquidity Coverage Ratio as one of the major changes in the financial market. Liquidity Coverage Ratio has reinforced all the banks in Australia to handle probable risks linked with the financial banking processes. As a result, it has increased the risk level for the banks in Australia, which influenced to develop hazardous situation for major financial institutions (Polsiri and Jiraporn 2012). Therefore, banks will have to increase the strength of pricing system, which will increase the probability of risks among the lenders.

Social factor:

NAB has always made a conscious effort maintain all the corporate social responsibilities of the company effectively. NAB has been advertising the personal banking system for making financial transaction process simpler for the customers. Furthermore, NAB is focusing on the customer needs in order to reduce possibility of any social problem.

Technological factor:

NAB focuses towards utilizing stable, simpler and agile technologies for providing effective customer support services (Latimer 2012). Furthermore, NAB also focuses towards effective utilization of technologies to attract more people to avail the services of the bank ( 2016). NAB also has utilized modern technology for providing instant banking system for the customers.

Ecology factor:

NAB has also taken several initiatives and programs to create positive impact on the maintenance of ecology. For instance, NAB has developed several programs to provide health safety and education opportunity for people in Australia (Podolski 2012). Furthermore, Nab help customers to understand the risk associated with environment in order to reduce negative impact on the environment.

PESTEL analysis

Legal factor:

As per the article by Frie (2013), every financial institution has to go through several rules and regulations in order to conduct its businesses properly. Therefore, NAB has always focuses on the maintenance of all the rules and regulations implemented by government in order to conduct risk management, financial planning and payment transaction process effectively.

As per the article by Deng and Liu (2014), SWOT analysis is extremely helpful for the organizations to analyze internal strengths and weakness effectively. Furthermore, it also helps organizations to identify possible threats and opportunities. The SWOT analysis for NAB is as follows:


  • Strong brand image helps to attract people from all across the Australia to avail effective financial services
  • Effective diversification of products and services is the prime strength of NAB to ensure success of the business
  • The organization has able to maintain consistent interest income and revenue level for a long period of time
  • NAB is regarded as one of the prime financial institution in Australia in terms of total amount of assets


  • Decreasing revenue level of NAB has created major adverse impact on the growth rate of the organization
  • Lack of global acclaim is one of the prime weaknesses of the organization


  • NAB can focus on the financial market outside the Australia, as it can improve the revenue level of the organization to another level.
  • Acquisition and joint venture technique can still help NAB to attract people to avail financial services of the organization
  • NAB can also focus more on the asset management sector to increase its business opportunity in the market


  • Increasing competition in the Australian market has emerged as a major threat for NAB
  • Financial crisis is another factor that can major adverse impact on the revenue level of NAB
  • Repetitive changes in the rules and regulations implemented by Australian government

As per the article by Latimer (2012), organizational culture and leadership style plays significant role in the organizational success. Therefore, NAB also has tried to implement effective leadership style to manage its business processes effectively. However, the organization has faced foreign currency fraud that highlighted serious cultural and leadership issue. Previously the company has able to grow in the stable Australian economic environment. However, the foreign currency fraud has induced the organization to implement changes in its leadership structure. During the economic unstable situation, NAB has reduced its workforce by up to 11% in order to minimize the cost of the organization (Daly and Gebremedhin 2015). Furthermore, NAB has also considered utilization of outsource technique to fulfill all its requirements in the operational process. NAB also had utilized reform strategy for the refurbishment of all its branches (Watson and Wickramanayake 2012). However, the management of NAB always tries to provide the best experiences to the customers at the time of availing financial services of the organization. Therefore, NAB has tried to develop organizational culture in such a way so that it can able to identify customers’ needs effectively. This has helped NAB to emerge as one of the prime financial institution in Australia.    

The above information highlighted the fact that NAB needs many improvements in their business activities. Firstly, NAB will have to focus on its procedure of resource allocation in order to improve its operational processes. Therefore, NAB also will have to provide proper training and development opportunities for all its employees. It will help organization to enhance the effectiveness of the operational process. For that reason, Nab can also consider expert help in order to improve the business structure for the betterment of the organization.

NAB also have to focus on the development of strategy in order to stop continues fall in the revenue level. NAB can utilize merger and acquisition strategy to divide the responsibilities of the organization. Furthermore, merger and acquisition also help Nab to allocate all its resources in an appropriate way. 


The above analysis has been describing the strategies that National Australia Bank has implemented in order to gain competitive advantage in the market. It highlighted that NAB’s prime focus is to provide effective customer service to attract more people to avail financial services of the organization. However, the report also has highlighted that NAB has faced lot of criticism for continues fall in the revenue level. Thus, it highlighted the fact that NAB has to focus on several factors in order to improve its position in the market.


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Chowdhury, K., 2012. Modelling the dynamics, structural breaks and the determinants of the real exchange rate of Australia. Journal of International Financial Markets, Institutions and Money, 22(2), pp.343-358.

Daly, A. and Gebremedhin, T., 2015. Can An “Indigenous Employment Program” Work? A Case Study of National Australia Bank. Economic Papers: A journal of applied economics and policy, 34(3), pp.128-138.

Deng, X. and Liu, L., 2014. The Bank Lending Channel: Evidence from Australia. AABFJ, 8(2), pp.71-87.

Frie, E., 2013. Destination Australia: migration to Australia since 1901. National Identities, 15(4), pp.428-430.

International Monetary Fund, 2012. Australia: Financial Safety Net and Crisis Management Framework�Technical Note. IMF Staff Country Reports, 12(310), p.1.

Kaal, W. and Painter, R., 2011. The Aftermath of Morrison v. National Australia Bank and Elliott Associates v. Porsche. European Company and Financial Law Review, 8(1).

Latimer, P., 2012. Australia – Financial sector reform legislation. ac, 1999(13).

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Shamsuddin, A. and Xiang, D., 2012. Does bank efficiency matter? Market value relevance of bank efficiency in Australia. Applied Economics, 44(27), pp.3563-3572.

Sussangkarn, C., 2012. Institution Building for Macroeconomic and Financial Cooperation in East Asia. The International Economy, 2011(15), pp.17-30., 2016. National Australia Bank Comes Under Heavy Criticism. [online] VOA. Available at: <> [Accessed 2 Sep. 2016].

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