Macquarie Bank

?Introduction Macquarie Bank has been recognised as one of the most prestigious banks in Australia and around the world. Macquarie was established in Australia in 1969, it began operations in Sydney in January 1970 with only three staff. Macquarie Bank first opened its doors for business on 1 March 1985 with a retail branch in Sydney. Today, Macquarie Bank operates in a range of investment banking, commercial banking and selected retail financial services markets both in Australia and overseas. It is the only substantial, majority Australian owned investment bank and is a licensed trading bank under the Australian Banking Act 1959 (Macquarie History, 2007). Macquarie Bank has been consistently associated with a stream of major financial innovations, which have underpinned its reputation as a market leader. Their main focus that has helped them in their success is their risk management department as well as their focus on select markets on which they enter. The Macquarie culture is represented by the way in which they work together. The values to which they aspire can be summarised in six principles: integrity, client commitment, strive for profitability, fulfilment for our people, teamwork, and highest standards. Macquarie Bank’s commitment to the six principles is vital for continued growth and prosperity (Macquarie, About Macquarie, 2007) Operating Environment: The Macro Environment Political and legal forces Political and legal forces hold a great impact on all industries that wish to operate legally within a country. Regulatory groups are required within the banking industry to assist in the stable operation of a nation. A major regulator would be The Australian Prudential Regulation Authority (APRA). Various other major political and legal forces which solely influence the banking industry include The Australian Bankers’ Association (ABA), The Australian Securities and Investments commission (ASIC) and The Reserve Bank of Australia (RBA). APRA was created to be an advisory figure in the regulation of the Australian financial services industry. This group â€Å"oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most members of the superannuation industry† (APRA, 2007). The ABA works with its members to provide analysis, advice and advocacy and contributes to the development of public policy on banking and other financial services† (ABA, 2007). The ABA acts as a union for banks and ensures that the banking industries views are heard, when the government decides to alter policies or legislations. Th e ABA also helps to strengthen the benefits of competition to Australian banking customers. ASIC’s task is to enforce and regulate companies and financial services laws in order to protect the customers as well as the investors and creditors. ASIC exists to regulate; â€Å"Australian companies, financial markets, financial services organisations and professionals who deal and advise in investments, superannuation, insurance, deposit taking and credit† (ASIC, 2007). â€Å"The RBA’s main responsibility is the monetary policy† (RBA, 2007). The board members make the policy decisions with the aim of gaining a low and stable inflation over the medium term. According to the RBA website, the other major goals include; maintaining financial system stability and promoting the safety and efficiency of the payments system. The RBA also acts as a banker to the Australian Government and actively participates in financial markets, manages Australia’s foreign reserves and issues Australian currency notes. Global Forces Changes in the financial status of markets overseas, drops or increases in interest rates overseas, and even new political regimes can all affect organisations around the world. Global forces which have recently held an effect on Macquarie bank would be the current drop in the US economy which has affected markets all around the world. The main impact which it has made in Australia has to do with financial institutions since they hold assets from the US market. This has directly affected Macquarie with its financial services and products. Economic forces Economic forces pertaining to Australia can greatly influence the way businesses operate. General economic forces such as inflation rates, interest rates, currency exchange rates, unemployment levels, average disposable income, and personal saving rates can all affect organisations to a certain extent (Hill et al, 2004, p74). Inflation has affected Macquarie bank which then in turn goes to interest rates. Currently economic forces within Australia include rises in certain industries including the mining industry and real estate. By these industries entering a boom period, it increases the amounts which these industries will be willing to invest which in turn increases profits for banks. Technological forces In modern society with technology being so closely tied to having a competitive advantage, a lot of industries compete to keep up to date with new developments. The invention and increased use of computers, internet, and phones have all made a major impact on organisations around the world. The main effect that technological advancements have made within Macquarie bank is that internet banking is now a common and widely used item so banks need to constantly upgrade their technology in order to prevent hackers from entering their databases and causing havoc. Operating Environment: The Micro Environment There are many forces that can impact the outcome of a firm’s growth and profitability. For Macquarie Bank, the forces that impact their success will be explored with the analytical frame work introduced by Michael Porter; his five forces model, which will look at the major contributing factors that will aid and deter the growth of Macquarie Bank in this industry. Risk of threat of new entrants The risk and threat of new entrants into the market can be seen as both high and low. High, since there has been a deregulation of the market for banking, which will allow for overseas competitors to compete in the local market. This is a large threat since these are the competitors that have a large pool of resources that can actually compete to a high level with Macquarie. However, the threat can also be seen as low since there is still a high degree of entry barriers, i. e. operational regulations and laws implemented by the government and other regulatory boards. Additionally, a major factor that will deter competitors would be such things as brand loyalty as well as the over saturation of banks in the industry. Therefore, the threat of new entrants can be seen as moderate and is highly dependant on the entrant’s resources and capabilities. Rivalry among established companies The rivalry in the banking industry can be seen as discrete, yet volatile. They advertise in the media about their interest rates, products and services, however, apart from that, their actions are rarely seen. Each bank firm always try to gain the better package and interest rate to attract more customers. However, these rates are quite similar with little variance. A major factor that gives them the competitive advantage would be the image the bank upholds and the services provided in comparison. The main point of attack that most banks concentrate on now is their customer service area, since most of the services that they provide are quite similar. Macquarie has a very well maintained, high profile image. They provide a lot of diverse services; however, they charge premium service fees for them. This has not deterred people from using their services, but has given their users a sense of assurance; they feel as though they pay top dollar for top service and quality. This sense of prestige as well as resources and capabilities has given the Macquarie bank their high image and profile as well as success. Bargaining power of suppliers The main supplier of Macquarie bank would be their shareholders. By owning a share in Macquarie depicts that these people have invested money into this organisation and since there are various options to choose from, Macquarie must be unique in some sense to attract these people. It would become costly for Macquarie to lose these shareholders as with banks, money is the good which is being transferred and to lose shareholders would only lead to a deficit in funding for the bank. Therefore, the bargaining power of suppliers would be seen as high since there is no switching cost for them to move their money into another investment area. Macquarie must come to a compromise with supplier demands or face losing a stream of equity and funding. Threat of substitutes The main threat of substitute services for Macquarie Bank would be; credit unions and building societies. Credit unions, especially the larger ones offer most of the services that Macquarie offer, however, with fewer fees. Building societies although not as main stream and service diverse as credit unions have the potential to develop the competencies to deliver them, for example, Bendigo Bank; which was originally a building society. Although these two types of institutions do not offer the wide array of services that Macquarie does, it can steal away some of Macquarie’s customers, since they deliver a minimal version of the services that Macquarie provides. Additionally, with Macquarie’s reputation and diverse array of services, the threat of substitutes would be on a miniscule level. Bargaining power of buyers The banking industry in Australia can be seen as a saturated market. This saturation allows buyers (consumers) a level of bargaining power. This means that the consumer can negotiate interest rates and packages to their advantage against the provider. However, since there are only a few financial institutions in Australia, many of whom can charge higher prices for services and packages. Yet on the other hand, the domestic banking industry is considered to be competitive, which can offset the balance with only having fewer firms in the market. Therefore, the bargaining power of buyers can be considered as moderate. Competitive Advantages Macquarie bank provides investment banking, commercial banking, retail financial services in Australia and selected financial services offshore. It operates through the following business segments: Asset and Wealth Management; Financial Markets; Investment Banking; and Lending. Macquarie is a diversified international provider of financial and investment banking services. It has the following key resources and capabilities compared to Commonwealth and Bendigo Bank: Human Resource Macquarie bank’s hosts and presenters are industry experts who have the xperience and knowledge to achieve the maximum outcome in this complex and rapid changing economic environment. With a network of over 10,000 people in 24 countries, the staff can add the most value and advantages to clients. Annette Martins is currently employed as an associate economist in the economics team at Macquarie bank. Her past experience includes working for the NSW Treasury as an economist within the Economic and Fiscal directorate. Other staffs have worked for such as Reserve bank of Australia (Macquarie, 2007). At Macquarie, there are elites in different professions such as Economy matters, Marketing, Property and Vision. All the staff members are carefully drawn from a broad range of industries and market segments. It is also allowing them to apply their expertise to the customers. Customer Resource Macquarie bank is currently operating its services in more than 40 countries around the world as OzForex is serving around 30,000 transacting customer internationally. It provides a depth of service (accurate and insightful view) with specialist capabilities to wholesale and private customer in both the domestic (Australia) and international economies (Macquarie, 2007). Simultaneously all these customers may invest their money with other Macquarie’s business groups such as Funds management or financial service groups. They both run domestically and internationally. The Financial service group services more than 670,000 clients all together with other Macquarie Departments. Department Resource Macquarie is currently operating its service in seven major business groups which are Investment Banking Group, Equity Markets Group, Treasury and Commodities Group, Banking and Securitisation Group, Real Estate Group, Funds Management Group and Financial Services Group. With all these services, Macquarie owns huge customer resources within Australia and foreshore. Each department in Macquarie is serving specific groups which may overlap with other departments because Clients may be interested in more than one service which Macquarie provides (Macquarie, 2007). Subsidiary Companies Macquarie is providing its specialist banking and financial service in select markets around the world. It also has a lot of subsidiary companies around the world. OzForex is an online foreign exchange provider which Macquarie has purchased 51% of the shares. It will allow Macquarie to offer tailored foreign exchange services to its substantial retail financial services within financial service groups (Macquarie-OzForex, 2007). Comparison against rival Banks Commonwealth bank’s principal activity is providing integrated financial services which include business and institutional banking, superannuation, life insurance, funds management and broking services and finance company activities. It operates in Australia, NZ, UK, USA, and Japan†¦etc. It has a wide presence in Australia with the largest branch and ATM network. It also received the award for excellence – Best Bank in Australia but was not mentioned in relation to investment services (Commonwealth Bank, 2007). Bendigo bank’s main financial services include business banking and commercial finance, funds management, treasury and foreign exchange services, superannuation and trustee services. It operates mainly in all Australian estates and the Australian Capital Territory. Bendigo bank is responsible for a number of banking innovations in Australia such as visa credit and debit cards (Bendigo, 2007). With all the resources and capabilities when comparing Macquarie bank to Commonwealth bank and Bendigo bank, Macquarie is on a leading position for investment banking. Deregulation is expected to lead to an increase in competition in the banking industry, and could involve a decrease in profitability. There are four factors in a bank’s competitive advantage that needs to be considered: (Chen. T. , 1999) Manpower Financial management Asset base Intangible assets Achieving success in the industry will involve 3 key factors. These are the costs, product and financial strength of the corporate entity. To be successful in the banking industry, the bank needs an insight into the changes in banking methods, cost management and long-term financial solutions. Macquarie bank’s strategy is to expand selectively in practical areas. (Macquarie Annual Report, 2007) Macquarie has entered the market of infrastructure investing since 1996. It has become one of the largest private managers of infrastructure in the world, with rapidly increasing revenue and profit. Macquarie bank’s specialist funds are currently buying toll roads, airports and rail systems world-wide. It is also a key growth driver and has been exported to international markets; its assets under management in specialist funds increased 50 per cent from $A87. 6 billion to $A131. 3 billion. Macquarie’s long-term strategy has allowed them to enter new sectors and regions flexibly as opportunities arise. This strong risk management has become a key factor of Macquarie’s success. The overall result is driven by strong growth in every region where Macquarie operates. Macquarie has achieved No. ranking in Australia for mergers and acquisitions whilst maintaining its leading market position for equity rise. It has also been ranked No. 1 broker by the ASX (Australian Stock Exchange) in market share. Macquarie bank, Australia’s largest Cash Management Trust (CMT) provider also has an agreement with Australia’s largest retail equities network, GBST (Glob al Banking & Securities Transactions). These strategic alliances provide Macquarie with an enhanced reach to its customers as well as customers from other alliances, hence forming a broader network. Company Strategy Macquarie company strategy Macquarie states that â€Å"Our strategy is to expand selectively, seeking only to enter markets where our particular skills and expertise deliver real advantage to clients† (Macquarie Annual Report, 2006); â€Å"Macquarie aspires to be a pre-eminent provider of financial services over the long haul† (Macquarie, 2007). This statement also shows that their strategy is to be a leader in their sector. (For more information on the business level strategy, please refer to appendix 1). Competing with Macquarie. Macquarie Bank Group can be seen as the market leader in investment banking, inancial services and retail banking â€Å"Macquarie Bank has been consistently associated with a stream of major financial innovations, which have underpinned its reputation as a market leader† (Macquarie History, 2007). The way that they have focused on market segments has given Macquarie an edge over their competitors; since they service the market segments which they see profit and growth in for themselves as well as their customers. What this means is that they minimise their risk of entering â€Å"stagnant† areas and maximise growth and return by servicing their target groups. Macquarie Bank Financial Results Total income from ordinary activities for the year 2007 was up 49% to $A7,181m; International income was up 70% to $A3,457m; Net fee and commission income was up 25% to $A3,540m; Trading income was up 20% to $A1,047m; Net interest income was up 23% to $A728m. Asset and equity investment realizations and other income were up 257% to $A1, 866m (Macquarie Financial Report, 2007). The expense to income ratio was slightly down at 73. 2 % (Macquarie, 2007). Refer to appendix 2 for the pie chart. *EPS = Net Earning / Outstanding shares Macquarie banks financial possession as of May 2007 is Net profit of A$1. 46bn. There has been a 60% increase as compared to the later year and six times the level increase as compared to the last five years. Earnings per share increased 48% from $A4. 00 to $A5. 92. This is 4. 5 times the level of earnings per share of five years ago (Macquarie, 2007). Earnings per share are generally considered to be the single most  important variable in determining a share's price. It is also a major component of the price-to-earnings valuation ratio. The P/E looks at the relationship between the share price and the company’s earnings. A high P/E  suggests that investors are expecting  higher earnings  growth  in the future compared to companies with a  lower P/E. However, the P/E ratio doesn't tell us the whole story by itself. It's usually  more useful to compare the P/E ratios of one  company to other companies in the same industry, to the market in general or against the company's own historical P/E. P/E Ratio = Market price per Share / EPS P/E of Macquarie for 2007 = 82. 75/ 5. 916* = 13. 987 (Macquarie Financial Report, 2007) The Pay-out Ratio shows the amount of earnings paid out in dividends to shareholders. Investors can use the payout ratio to determine what companies are doing with their earnings. The payout ratio also indicates how well earnings support the dividend payments: the lower the ratio, the more secure the dividend because smaller dividends are easier to pay out than larger dividends. (Investopedia, 2007) Macquarie Bank (Payout Ratio) 2005 2006 2007 53. 20% 54. 40% 54. 30% As the ratios above show, there has been very slight fiction in the level of dividend payouts. There has been a 0. 0% decline in the ratio which could only mean, that investors are feeling secure with the payout of the company which in turn means the company has higher retained earnings in their balance sheet and are able to keep investor confidence. Other data from the financial report suggests a decline in the expense to income ratio, for every $A1 of income $A0. 732 goes into expense. This suggests that Macquarie is h andling its expense well and is confident enough to pay off their investors. Return on Equity is a ratio that captures profitability, efficiency and capital structure within an entity. Changes in the ratio will reflect the direction of an entity’s profitability, asset efficiency and capital structure. ROE for Macquarie Bank 2006 = Net profit/ Average equity x 100 ROE = 916 /5968 ROE =15. 34% ROE for Macquarie Bank 2007 = Net profit/ Average equity x 100 ROE = 1463 /7519 ROE = 19. 46% The ROE increased from 2006-2007. In 2006 an investment of one dollar of shareholders equity returned 15. 34 cents of earnings available for distribution to shareholders. In 2007 an equivalent dollar investment generated 19. 6 cents of earning available to distribute to the shareholders. A figure which depresses the return on equity is if the cost of debt exceeds the return on assets. The debt ratio indicates how many dollars of debt exists per dollar of assets. It shows the leverage between a company is debt financed or asset financed. Equity Ratio for Macquarie 2007 = total equity / total assets x 100 = 7519/ 136, 389 x 100 = 5. 56% est. 6% This shows that 6% of Macquarie†™s debt finances their assets. They are relatively debt financed. Another way to measure the company’s financial leverage is the debt to equity ratio. It is calculated by dividing  its total liabilities  by  stockholders' equity. It indicates what proportion of equity and debt the company is using to finance its assets. = 128,870 / 7519 = 17. 14 A high debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. This can result in volatile earnings as a result of the additional interest expense. If a lot of  debt is  used to finance increased  operations (high debt to equity), then Macquarie could potentially generate more earnings  than it would have without this  outside financing. If this were to increase earnings by a greater amount than the debt cost (interest), then the shareholders benefit as  more  earnings are being spread among the same amount of shareholders. However, the cost of this debt financing may  outweigh the return that  the company  generates on the debt through investment and business activities and become too much for the company to handle. This can lead to bankruptcy, which would leave shareholders with nothing. (Investopedia, 2007) Issue 1 Macquarie Bank users a decentralised management structure. This decentralisation refers to when decisions are made at different levels within an organisation (Hill et al, 2004, p273). Decentralisation Overview: Macquarie’s management and organisation structure is considered to be non-hierarchical. This means that the chain of command within the organisation is designed to be decentralised. This management approach allows the lower and mid-level managers within the seven divisions of Macquarie to make decisions on their own. Macquarie encourages their employees to gain a sense of ownership and to develop entrepreneurial skills in order to make strategic decisions (Macquarie Management, 2007). By giving the lower and mid-level managers the power to make decisions, it will reduce the bureaucratic cost to the company. In other words, delegating lower and mid-level managers’ decision-making responsibility, will lead to a reduction in upper level managers within the organisation. Furthermore, having a decentralised management structure will reduce information overload to the central management team, which will enable them to spend more time focussing on market and industry forces (Macquarie Management, 2007). A decentralised management structure may be good in order to keep costs down and provide central managers more time to make effective decisions; it may however cause further problems within the organisation. Problem 1: Communication & Coordination issues involving the Decentralisation Approach: The decentralised management theory states that lower bureaucratic costs will avoid communication and coordination problems within an organisation. This may be true in theory, however in reality it is not always the case. For example, the seven divisions of Macquarie are run and operated independently. All of the lower and mid-level managers of the organisation make their own decisions within each division. Since every division in Macquarie are related, it is surprising to see that they do not effectively communicate with each other because there is no level manager do so. In other words, there is no managerial network that integrates with each of the divisions. This could mean that information and other resources are not equally shared, which can lead to difficulties in creating value for the ompany. Problem 2: Leadership Issues using the Decentralised Management Approach: Another decentralised issue that could affect Macquarie is for when the organisation is facing periods of uncertainty. For instance, when the Macro-environment is volatile or unpredictable it is important for an organisation to show strong leadership. In these uncertain times it is important that leadership decisions are best given from higher-level managers. One of the issues concerned with Macquarie’s management structure is that leadership decisions do not come from lower or mid-level managers. In fact, decision-making made by an organisation’s division can be made to benefit them rather than to benefit an organisation as a whole. Therefore, this decentralised management approach may not be effective to face periods of uncertain times. Recommendations Macquarie decentralised management system is working well despite some of the issues facing the company. However, Macquarie Bank can benefit from using both a centralised and a decentralised management structure. A centralised management system is the complete opposite of decentralised management structure, where decisions are made by upper-level managers of the organisation (Hill et al, 2004, p273). The approach that Macquarie should take is to find a balance between a centralised and decentralised management regime. For instance, issues such as investing money into infrastructure should be done using a centralised approach and consequently issues dealing with recruitment and training should be done through decentralisation. Archiving the balance between the two management structures will determine the success of Macquarie Bank. Additionally, Macquarie should add a managerial network that integrates with all of the divisions in order to improve communication and resource sharing to create value for the organisation. However, it is important to note that as the company expands the decentralised approach may become less effective due to rising bureaucratic costs. Justifying the Recommendations: The real question that must be put forward to Macquarie is that can they continue to grow under a decentralised management regime? This is a key issue regarding the organisation structure for Macquarie Bank. As the Macquarie organisation expands, many critics argue that sustaining a decentralised management system in the long-term will fail. This is due to the fact that expanded business growth will not be able to maintain current hierarchical levels because it is too difficult, but more importantly it will lead to inefficiencies in managing the companies’ resources (Hill et al, 2004, p274). However to solve these issues, Macquarie can choose to divide the functional responsibilities up within the company across the same level, best known as ‘Horizontal Division of Work. ’ Using a functional structure in a horizontal framework will enable people with similar tasks be grouped together in order to increase productivity. This will reduce bureaucratic costs for an expanding business and increase operational flexibility. Therefore, Macquarie should consider a decentralized managerial approach in the short-run but in the long-run they may opted for a functional structure in order to reduce costs. Issue 2 Macquarie’s focus strategy to expand selectively, seeking only to enter markets where their particular skills and expertise, deliver real advantages to clients has served them well to this day, with expediential growth, it can have some implications. The main implications that can arise from this course of action and strategy are the limitations of the potentially profitable and growing markets that Macquarie could miss out on. This can lead to limited growth and a loss of market share if Macquarie continues this course of action to a stringent degree. It is near impossible to predict the trends to such an exact degree as too when to enter a market to obtain maximum growth, however, if there is the potential for that growth to occur, then the advantage can be taken by entering that market before this growth eventuates. However, by doing so creates risk. This risk is the gamble on predicting the success of the potential growth in the area. Although Macquarie does have a whole department dedicated to risk management, it still does not account for the ability of the environment to make unforeseeable changes. These environmental factors are out of the companies control, however, the company can anticipate an environmental change and implement a course of action to take in order to counter or profit from it. Therefore, Macquarie’s strategy of focusing on a select market to enter, although has helped them grow into a gigantic organisation, it could also be their downfall due to the potential growth they could miss out on by trying to minimise their risk. Problem 1: Market selection and alienation The way that Macquarie’s strategy focuses on expanding selectively to only enter markets where their particular skill are suited will cause these limitations in their possible future growth. This strategy can be seen as a focus strategy since Macquarie looks at targeting a particular market or customer segment; as stated in their original strategy, to expand selectively†¦where their skills and expertise deliver real advantages (Hill et al, 2004, p317). What a focus strategy entails is the focus on a niche market, which can be defined by, in Macquarie’s case, the type of customer and geographical region (Hill et al, 2004, p317). Although this strategy entails cost – control due to lower output levels to reach a scale of economy, Macquarie bank has grown so much that it does not have to take this part of the theory into too much account. Additionally, since Macquarie has created some unique attributes and competencies to its products and services accompanied by their high level of service quality it has given them a competitive edge by using this focus strategy. This has allowed Macquarie to charge higher rates which has aided them in reaching the scales of economy. However, the issue of a focus strategy, in Macquarie’s case, is that by minimising their risk by entering possibly slow growing economies can minimise their growth rate. This is due to the environmental and operational environment which they have no control over which can eventuate in that market to grow exponentially. Although this can be predicted, it cannot always be acted upon with enough haste to reap the maximum benefits. This leaves room for other competitors to move in and take advantage of this risk. Thus this strategy implemented by Macquarie can hold potential growth defects for them if they hold to this strategy too closely. Recommendation: To combat this market selectivity, Macquarie needs to manage change throughout the organization. The changes which it will introduce will establish a sense of urgency. Strategic leadership can assist in making that change happen within Macquarie Bank. Strategic leadership is the process of providing the direction and inspiration necessary to create, provide direction to, or sustain an organization or an organizational unit Dubrin et al, 2003, p400). An Innovative way to expand within the same banking industry and yet keeping the same image of Macquarie’s high scale markets is driving convergence which also helps redraw industry boundaries. Instead of competing with competitors, it can compete with its own financial advisory services. Another way to compete is imitation. Macquarie can benchmark their performance to other high scale ba nks globally and use two key components; strategic follower ship and learning by watching (Dubrin et al, 2003, p410). Justification for Recommendation Offering a higher quality than its competitors, can help combat markets selectively. Customer’s service, for banks is one of the ways total quality management, can be used. The variable which makes TQM possible is extensive employee involvement. Other hot topics are corporate social responsibility, it is a well-researched field of management and it provides guidelines for leaders about how to be more accountable to a new global economy. After the advents of Enron, topics of CSR and Corporate governance have emerged as ways to prevent people working in highly funded projects to have some form of transparency within the system. Macquarie which is Australia top investment bank should undertake such a role as they are leaders in the industry. Conclusion to Macquarie Banks strategic approach In summary, we have gone through a historical overview of Macquarie Bank and have come up with the expected result from this power house institution. Macquarie bank is an institution known for its complex ways of handling its organization, critics say it is like ‘wrestling in the dark with a ghost’ (Schwab, A; 2007). After evaluation of strategies we realize that Macquarie is a bank which provides prestige for Australia and has a high reputation in the minds of many. References Australian Bankers Association, (2007), ‘The Australian Bankers’ Association’s role,’ (online) http://www. bankers. asn. au/default. aspx? FolderID=2 (Accessed 13th September 2007) Australia Competition and Consumer Commission, (2007), ‘Role and Activities,’ (online) http://www. accc. gov. au/content/index. phtml/itemId/54137/fromItemId/3744 (Accessed 13th September 2007) Australia’s Free Trade Agreement, (2007), ‘Benefits of Free Trade Agreements for Australia,’ (online) http://www. fta. gov. au/default. aspx? FolderID=239=187 (Accessed 13th September 2007) Australia Prudential Regulation Authority, (2007), ‘Streamlined data collection for life companies and friendly societies,’ (online) http://www. apra. gov. au/media-releases/07_15. cfm (Accessed 13th September 2007) Australian Securities and Investment Commission, (2007), ‘ASIC at a Glance,’ (online) http://www. asic. gov. au/asic/ASIC. NSF/byHeadline/ASIC%20at%20a%20glance (Accessed 13th September 2007) Bendigo Bank, (2007), ‘Corporate Governance,’ (online) http://www. bendigobank. com. au/public/about_us/corporate_governance/corporate_governance. asp (Accessed 13th September 2007) Chen, T, (1999), Critical Success Factors for Various Strategies in the Banking Industry, vol 17 issue 2/3. Commonwealth Bank, (2007), ‘Company Profile,’ (online) http://about. commbank. com. au/group_display/0,1922,CH2047,00. html (Accessed 13th September 2007) Dubrin, Dalglish Miller, (2003), Leadership, 2nd edition, John Wiley and Sons, Australia Hill, Jones, Galvin, Haidar, (2004), Strategic Management: An Integrated Approach 2nd edition, John Wiley and Sons, Australia Investopedia, (2007), ‘Debt-Equity Ratio,’ (online) http://www. investopedia. com/terms/d/debtequityratio. asp (Accessed 17th September 2007) Macquarie Bank, (2007), ‘About Macquarie Bank,’ (online) http://www. macquarie. com. au/au/about_macquarie/index. html (Accessed 10th September 2007) Macquarie Bank, (2007), ‘Corporate Governance,’ (online) http://www. macquarie. com. au/au/about_macquarie/corporate_governance. htm (Accessed 8th September 2007) Macquarie Bank, (2007), ‘Financial Report 2007,’ (online) http://www. macquarie. com. au/au/about_macquarie/acrobat/financialreport2007. pdf (Accessed 11th September 2007) Macquarie Bank, (2007), ‘History of Macquarie Bank,’ (online) http://www. macquarie. com. au/au/about_macquarie/company_profile/history. tm (Accessed 10th September 2007) Macquarie Bank, (2007), ‘Macquarie Bank 2007 Annual review,’ (online) http://www. macquarie. com. au/au/about_macquarie/acrobat/annualreview2007. pdf (Accessed 11th September 2007) Macquarie Bank, (2007), ‘Macquarie Bank announces 60% increase in profit and 47% increase in dividends per share,’ (online) http://www. macquarie. com. au/au/about_macquarie/media_centre/200705015a. htm (Accessed 17th September 2007) Macquarie Bank, (2007), ‘Major Seven Major Business Groups,’ (online) http://www. macquarie. com. au/au/about_macquarie/company_profile/mgmt_organisation/six_groups. tm (Accessed 11th September 2007) Macquarie Bank, (2007), ‘Management and Organisation Structure,’ (online) http://www. macquarie. com. au/au/about_macquarie/company_profile/mgmt_organisation. htm (Accessed 16th September 2007) Reserve Bank of Australia, (2007), ‘Structure and Functions of the RBA,’ (online) http://www. rba. gov. au/ActionPlan/index. html (Accessed 13th September 2007) Appendices Appendix 1 Focussed product differentiation A key element that has helped Macquarie differentiate its services from their competitors is how they have selected their market segments; however, this will be discussed in the next section. The reason they have a distinctive service differentiation from their competitors can be based on their values that they hold within the company. These values are; high ethical and professional standards, commitment to clients and growth, motivating and retaining quality staff, creating aligned staff and shareholder rewards and stringent reporting to create a high level of accountability (Macquarie, 2007) Focussed market segmentation Macquarie’s focussed market segmentation plan is to target a preferred demographical segment. They target the areas where they can best maximize their business as well as service their customers to the expectations that customers would hold from this prestigious company. They have a large commitment to the people they service as well as constant improvement to deliver higher standards of services and products to those people. As mentioned earlier, they expand selectively, seeking only to enter markets where Macquarie’s particular skills and expertise deliver real advantage to clients Focussed distinctive competency Another factor that has given Macquarie its strategic advantage would be