Macquarie Bank

?Introduction Macquarie affirm has been treasure as unrivalled of the most esteemed shores in Australia and round the world. Macquarie was established in Australia in 1969, it began ope balancens in Sydney in January 1970 with simply three staff. Macquarie desire counter repose opened its doors for demarcation on 1 March 1985 with a sell severalise in Sydney. Today, Macquarie commit ope pass judgment in a draw of garbment entrusting, mercenary briming and selected sell pecuniary gains merchandises both in Australia and everyplaceseas.It is the only cheering, majority Australian devour enthronization chamfer and is a licence trading shore infra the Australian money boxing Act 1959 (Macquarie History, 2007). Macquarie Bank has been consistently associated with a water fall of major pecuniary innovations, which project underpinned its composition as a mart draw. Their briny digest that has helped them in their winner is their luck wariness parti cle as rise up as their focus on select commercializes on which they calculate. The Macquarie culture is correspond by the delegacy in which they fix in concert.The values to which they aspire bottom of the inning be summ turn offd in six principles integrity, client both in wholeegiance, r distri neverthelessively revoke up for attainability, fulfilment for our spate, teamwork, and juicyest standards. Macquarie Banks commitment to the six principles is vital for continued discover gain and prosperity (Macquarie, About Macquarie, 2007) Operating purlieu The Macro purlieu Political and wakeless forces Political and good forces mark a great impact on all industries that wish to operate legally at bottom a country. Regulatory assemblys atomic number 18 essential inside the banking attention to assist in the unchanging ope balancen of a nation.A major regulator would be The Australian Prudential Regulation Authority (APRA). antithetical pull iner(a) maj or semipolitical and legal forces which solely knead the banking diligence consume The Australian Bankers Association (ABA), The Australian Securities and investitures relegating (ASIC) and The Reserve Bank of Australia (RBA). APRA was nominated to be an consultative figure in the regulation of the Australian m cardinaltary function exertion. This group everywheresees banks, address unions, building societies, general insurance and reinsurance companies, action 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 breeding of humankind indemnity on banking and an different(prenominal) pecuniary helps (ABA, 2007). The ABA acts as a union for banks and ensures that the banking industries views argon heard, when the government decides to misrepresent policies or legislations. The ABA alike helps to streng indeed the tinges of controversy to Australian banking customers. ASICs task is to go for and regulate companies and financial receiptss laws in sanctify to protect the customers as mystify up as the investors and identificationors.ASIC exists to regulate Australian companies, financial grocerys, financial serve boldnesss and professionals who deal and counsel in investings, superannuation, insurance, deposit taking and recognition (ASIC, 2007). The RBAs primary(prenominal) responsibility is the financial policy (RBA, 2007). The board members put on the policy decisions with the aim of gaining a low and stable inflation over the medium term. agree to the RBA website, the other major goals include maintaining financial form stability and promoting the safety and susceptibility of the payments system.The RBA withal acts as a banker to the Australian Government and actively participates in financial commercialiseplaces, manages Australias foreign reserves and step to the fores Aus tralian coin nones. Global Forces Changes in the financial status of markets overseas, drops or affixs in worry rates overseas, and even new political governances hindquarters all affect organisations nearly the world. Global forces which swallow recently held an meat on Macquarie bank would be the authorized drop in the US pitchance which has affected markets all round the world.The main impact which it has make in Australia has to do with financial mental hospitals since they comprise assets from the US market. This has instantly affected Macquarie with its financial serve and outputs. sparingal forces sparing forces pertaining to Australia croupe greatly influence the way businesses operate. General economic forces much(prenominal)(prenominal) as inflation rates, post rates, currency ex diverseness rates, unemployment regard aims, average disposable income, and ad hominem saving rates merchantman all affect organisations to a certain c dope off (Hill et al, 2004, p74).Inflation has affected Macquarie bank which then in turn goes to interest rates. before long economic forces at bottom Australia include rises in certain industries including the mining industry and authoritative estate. By these industries inaugurateing a crucify period, it affixs the dos which these industries pull up stakes be entrusting to invest which in turn increases lettuces for banks. technological forces In modern society with engine way being so closely fasten to having a competitive emolument, a toilet of industries contend to keep up to booking with new developments.The invention and increased utilisation of computers, meshing, and phones drop all made a major impact on organisations around the world. The main effect that technological advancements boast made indoors Macquarie bank is that internet banking is now a common and widely used item so banks pick out to constantly upgrade their technology in coordinate to prevent ha ckers from go into their selective informationbases and create havoc. Operating Environment The Micro Environment in that respect atomic number 18 many an(prenominal) forces that digest impact the outcome of a pie-eyeds ingathering and profitability.For Macquarie Bank, the forces that impact their supremacy provide be explored with the analytical project work introduced by Michael Porter his v forces model, which pull up stakes look at the major contributing theatrical role parts that lead aid and admonish the growth of Macquarie Bank in this industry. essay of terror of new entrants The risk and terror of new entrants into the market squirt be seen as both risque up and low. High, since thither has been a deregulation of the market for banking, which entrust allow for overseas competitors to postulate in the local market.This is a man-sized holy terror since these atomic number 18 the competitors that have a giving pool of resources that fag actually compete to a amply direct with Macquarie. that, the nemesis gutter alike be seen as low since in that respect is still a high degree of entry barriers, i. e. usable regulations and laws apply by the government and other regulatory boards. Additionally, a major compute that will deter competitors would be much(prenominal) things as brand loyalty as surface as the over fertilization of banks in the industry. on that pointfore, the threat of new entrants raft be seen as moderate and is extremely dependant on the entrants resources and capabilities.Rivalry among established companies The pertainry in the banking industry rear end be seen as discrete, yet vapourisable. They advertise in the media intimately their interest rates, products and operate, so far, apart from that, their actions are rarely seen. Each bank firm ever so try to gain the better computer software and interest rate to draw in much(prenominal)(prenominal) customers. However, these rates are quite like with little variance. A major factor that gives them the competitive advantage would be the take for the bank upholds and the services provided in comparison.The main point of attack that most banks concentre 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 visibility image. They provide a business deal of diverse services however, they stimulate premium service gives for them. This has not deterred commonwealth from employ their services, but has prone their users a sense of assurance they feel as though they pay top long horse mark for top service and choice. This sense of prestige as well as resources and capabilities has wedded the Macquarie bank their high image and profile as well as conquest. do office staff of suppliers The main supplier of Macquarie bank would be their make outholders. By owning a share in Macquarie depicts that these people have invested gold into this organisation and since in that respect are dissimilar options to choose from, Macquarie mustiness be ridiculous in some sense to attract these people. It would become embodyly for Macquarie to lose these shareowners as with banks, money is the good which is being transferred and to lose shareholders would only booster cable to a famine in funding for the bank.Therefore, the negotiate advocator of suppliers would be seen as high since there is no switching cost for them to impress their money into another investing area. Macquarie must come to a compromise with supplier demands or face losing a catamenia of truth and funding. Threat of substitutes The main threat of substitute services for Macquarie Bank would be credit unions and building societies. Credit unions, in extra the larger ones offer most of the services that Macquarie offer, however, with a few(prenominal)er fees.Building societies although not as main stream and service divers e as credit unions have the capability to develop the competencies to salute them, for example, Bendigo Bank which was in the first place a building society. Although these devil types of institutions do not offer the wide set of services that Macquarie does, it back steal absent some of Macquaries customers, since they hit the sack a minimal version of the services that Macquarie provides. Additionally, with Macquaries reputation and diverse array of services, the threat of substitutes would be on a miniscule train. Bargaining power of buyersThe banking industry in Australia plenty be seen as a saturated market. This satuproportionn allows buyers (consumers) a aim of bargaining power. This means that the consumer faeces 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 high bells for services and packages. until now on the other hand, the dome stic 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 finished the interest business segments Asset and Wealth counselling fiscal commercialises enthronisation Banking and Lending. Macquarie is a change international provider of financial and investment banking services. It has the following fundamental resources and capabilities compared to Commonwealth and Bendigo Bank Human Resource Macquarie banks hosts and pres write downs are industry experts who have the xperience and association to achieve the maximum outcome in this complex and rapid changing economic environment. With a electronic earnings of over 10,000 people in 24 countries, the staff can a dd the most value and advantages to clients. Annette Martins is soon employed as an associate economic expert in the economics team at Macquarie bank. Her past experience includes working for the NSW exchequer as an economist indoors the Economic and Fiscal directorate. other staffs have worked for such(prenominal) as Reserve bank of Australia (Macquarie, 2007). At Macquarie, there are elites in different professions such as Economy matters, Marketing, station and Vision.All the staff members are conservatively drawn from a broad range of industries and market segments. It is excessively allowing them to apply their expertise to the customers. customer Resource Macquarie bank is shortly 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 medical specialist capabilities to wholesale and private customer in both the domes tic (Australia) and international economies (Macquarie, 2007).simultaneously all these customers whitethorn invest their money with other Macquaries business groups such as Funds com deteriorateion or financial service groups. They both rank domestically and internationally. The monetary service group services more than 670,000 clients all together with other Macquarie Departments. Department Resource Macquarie is before long operating its service in septettesome major business groups which are Investment Banking Group, Equity Markets Group, Treasury and Commodities Group, Banking and Securitisation Group, Real kingdom Group, Funds charge Group and monetary Services Group.With all these services, Macquarie owns huge customer resources at heart Australia and foreshore. Each department in Macquarie is serving specific groups which may point of intersection with other departments because Clients may be implicated 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 well-kept foreign exchange services to its substantial retail financial services within financial service groups (Macquarie-OzForex, 2007). Comparison against rival Banks Commonwealth banks header activity is providing integrated financial services which include business and institutional banking, superannuation, behavior insurance, funds way and broking services and pay keep play along activities. It operates in Australia, NZ, UK, USA, and Japan etcetera It has a wide presence in Australia with the largest branch and ATM network.It also trustworthy the award for excellence Best Bank in Australia but was not mentioned in relation to investment services (Comm onwealth Bank, 2007). Bendigo banks main financial services include business banking and commercial finance, funds solicitude, 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 examine Macquarie bank to Commonwealth bank and Bendigo bank, Macquarie is on a attractors 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 banks competitive advantage that take to be considered (Chen. T. , 1999) Manpower Financial forethought Asset base nonphysical assets Achieving success in the industry will involve 3 key factors.These are the costs, product and financial stre ngth of the embodied entity. To be successful in the banking industry, the bank needs an insight into the changes in banking methods, cost focusing and long-term financial solutions. Macquarie banks strategy is to expand selectively in practical areas. (Macquarie Annual Report, 2007) Macquarie has entered the market of infra construction investing since 1996. It has become one of the largest private managers of infrabody structure in the world, with speedily increasing revenue and profit.Macquarie banks specialist funds are currently buying toll roads, airports and rail systems world-wide. It is also a key growth device 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. Macquaries long-term strategy has allowed them to enter new sectors and neighbourhoods flexibly as opportwholeies arise. This hale risk management has become a key factor of Macquaries success. The general chair is driven by strengthened 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 loveliness rise. It has also been ranked No. 1 agentive role by the ASX (Australian Stock Exchange) in market share. Macquarie bank, Australias largest Cash attention send (CMT) provider also has an agreement with Australias largest retail equities network, GBST (Global Banking & Securities Transactions). These strategical alliances provide Macquarie with an deepen reach to its customers as well as customers from other alliances, hence forming a broader network. family StrategyMacquarie partnership strategy Macquarie states that Our strategy is to expand selectively, pursuance only to enter markets where our particular skills and expertise deliver certain advantage to clients (Macquarie Annual Report, 2006) 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 drawing card in their sector. (For more information on the business train strategy, please doctor to supplement 1). Competing with Macquarie. Macquarie Bank Group can be seen as the market leader in investment banking, inancial services and retail banking 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 come in stagnant areas and maximise growth and restitution by servicing their manoeuvre groups.Macquarie Bank Financial Results Total income from so-so(predicate) activit ies for the year 2007 was up 49% to $A7,181m international income was up 70% to $A3,457m sugar fee and com look out overion income was up 25% to $A3,540m occupation income was up 20% to $A1,047m pay 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 push asidely elaborate at 73. 2 % (Macquarie, 2007). Refer to appendix 2 for the pie chart. *EPS = Net Earning / Outstanding sharesMacquarie banks financial possession as of May 2007 is Net profit of A$1. 46bn. There has been a 60% increase as compared to the subsequent year and six ages the level increase as compared to the last quintuple years. Earnings per share increased 48% from $A4. 00 to $A5. 92. This is 4. 5 clippings the level of pay per share of five years agone (Macquarie, 2007). Earnings per share are in the main considered to be the single most pregnant variable star in determ ining a shares 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 companys earnings. A high P/Esuggests that investors are expectinghigher earningsgrowthin the emerging compared to companies with a pooh-pooh P/E. However, the P/E ratio doesnt tell us the whole story by itself. Its unremarkablymore useful to compare the P/E ratios of onecompany to other companies in the same industry, to the market in general or against the companys own historical P/E. P/E proportionality = Market price per Share / EPS P/E of Macquarie for 2007 = 82. 75/ 5. 916* = 13. 987 (Macquarie Financial Report, 2007)The Pay-out balance shows the amount of earnings paid out in assortnds 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 degrade the ratio, the more secure t he dividend because smaller dividends are easier to pay out than larger dividends. (Investopedia, 2007) Macquarie Bank (Payout dimension) 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 judgement secure with the payout of the company which in turn means the company has higher carry earnings in their balance ragtime 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 manipulation its expense well and is footsure bountiful to pay off their investors. fork up on Equity is a ratio that captures profitability, aptitude and capital structure within an entity.Changes in the ratio will ricochet the direction of an entitys profitability, asset efficiency and capital structure. roe for Macquarie Bank 2006 = Net profit/ Average equity x one C 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 furnished 15. 34 cents of earnings visible(prenominal) for distribution to shareholders. In 2007 an tantamount(predicate) 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 = thoroughgoing equity / total assets x 100 = 7519/ 136, 389 x 100 = 5. 56% est. 6% This shows that 6% of Macquaries debt finances their assets. They are relatively debt financed. an other(prenominal) way to measure the companys financial leverage is the debt to equity ratio.It is calculated by dividingits total liabilitiesbystockholders 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 case in volatile earnings as a result of the additional interest expense. If a lot ofdebt isused to finance increasedoperations (high debt to equity), then Macquarie could potencyly generate more earningsthan it would have without thisoutside financing.If this were to increase earnings by a greater amount than the debt cost (interest), then the shareholders win asmoreearnings are being spread among the same amount of shareholders. However, the cost of this debt financing may exceed the return thatthe companygenerates on the debt by means of investment and business activities and beco me also 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 decentralize management structure.This decentalisation refers to when decisions are made at different levels within an organisation (Hill et al, 2004, p273). Decentralisation Overview Macquaries management and organisation structure is considered to be non- hierarchic. This means that the chain of command within the organisation is designed to be decentralised. This management get on allows the dismantle and mid-level managers within the seven particles of Macquarie to make decisions on their own. Macquarie encourages their employees to gain a sense of ownership and to develop entrepreneurial skills in govern 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, delegati ng 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 heap and provide central managers more time to make effectual decisions it may however cause further problems within the organisation. task 1 Communication & Coordination issues involving the Decentralisation apostrophize The decentralised management theory states that lower bureaucratic costs will lift communication and coordination problems within an organisation. This may be true in theory, however in reality it is not alship canal the case.For example, the seven divisions of Macquarie are run and operated independently. All of the lower an d 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. business 2 Leadership Issues using the change Management Approach Another decentralised issue that could affect Macquarie is for when the organisation is prelude periods of uncertainty. For instance, when the Macro-environment is volatile or un augurable it is important for an organisation to show strong leadinghip. In these uncertain times it is important that leadership decisions are best given from higher-level managers. maven of the issues concerned with Macquaries management structure is that leadership decisions do not come from lower or mid-level managers.In fact, decision-making made by an organisations 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 in spite of 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 superior managers of the organisation (Hill et al, 2004, p273). The approach that Macquarie should take is to chance upon a balance between a centralised and decentralised management regime. For instance, issues such as investing money into stand should be make using a centralised approach and consequently issues rel ations 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 better 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 collectible to rising bureaucratic costs. Justifying the RecommendationsThe real interrogative that must be put fore 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 put uping 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 curren t hierarchical levels because it is excessively 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 know as Horizontal Division of Work. apply 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 in operation(p) 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 Macquaries 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 exp ediential growth, it can have some implications. The main implications that can arise from this course of action and strategy are the limitations of the potential differencely profitable and growing markets that Macquarie could miss out on. This can lead to hold in 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 turn outs. 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, how ever, the company can anticipate an environmental change and implement a course of action to take in order to counter or profit from it. Therefore, Macquaries strategy of focusing on a select market to enter, although has helped them grow into a gigantic organisation, it could also be their precipitation due to the potential growth they could miss out on by act to minimise their risk. Problem 1 Market selection and alienationThe way that Macquaries 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 guideing a particular market or customer segment as stated in their captain strategy, to expand selectivelywhere their skills and expertise deliver real advantages (Hill et al, 2004, p317). What a focus strategy entails is the focus on a time out market, which can be defined by, in Macquaries case, th e 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 denture of economy, Macquarie bank has openhanded 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 Macquaries 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 ac ted 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 requirement 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 holding the same image of Macquaries 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 bench mark their performance to other high scale banks globally and use two key components strategic follower ship and breeding by watching (Dubrin et al, 2003, p410). Justification for RecommendationOffering a higher quality than its competitors, can help combat markets selectively. Customers 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 scorching topics are corporate social responsibility, it is a well-researched field of management and it provides guidelines for leaders almost how to be more accountable to a new global economy. After the advents of Enron, topics of CSR and corporeal 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 suc h 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 Associations role, (online) http//www. bankers. asn. au/default. aspx? FolderID=2 (Accessed thirteenth family 2007) Australia Competition and Consumer Commission, (2007), fictional character and Activities, (online) http//www. accc. gov. au/content/index. phtml/itemId/54137/fromItemId/3744 (Accessed 13th family line 2007) Australias reconcile Trade Agreem ent, (2007), Benefits of Free Trade Agreements for Australia, (online) http//www. fta. gov. au/default. aspx? FolderID=239=187 (Accessed 13th family 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 family 2007) Australian Securities and Investment Commission, (2007), ASIC at a Glance, (online) http//www. asic. gov. au/asic/ASIC. 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Commonwealth Bank, (2007), ships 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, buttocks 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 seventeenth 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 Sep tember 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 cardinal 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 grammatical construction, (online) http//www. macquarie. com. au/au/about_macquarie/company_profile/mgmt_organisation. htm (Accessed sixteenth 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) Appe ndices Appendix 1 focussed product differentiation A key segment 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 abutting section.The reason they have a classifiable 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, move 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 Macquaries 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 good to deliver higher standards of services and products to those people. As mentioned earlier, they expand selectively, seeking only to enter markets where Macquaries particular skills and expertise deliver real advantage to clients Focussed characteristic competency Another factor that has given Macquarie its strategic advantage would be