Recommendation It is recommended that ANZ Bank’s management should reconsider customer value proposition, reputation and security risk as a consequence of ANZ Bank recent outsourcing strategy. This report discusses three main issues that ANZ Bank’s management may have to consider if it is to enhance strength and core competency. Customer value proposition Firstly, as ANZ Bank has stressed that ‘becomes a super regional bank’ is a core strategy objective (ANZ 2012), ANZ will have to consider the potential effect for customer value proposition as a result of recent outsourcing strategy.

It has been pointed that the problem of losing managerial control that may arise from outsourcing (RBA tells bank to go slowly 2012). Weerakkody and Irani (2009) suggest that the loss of managerial control may negatively affect the quality of service which will lessen customer value proposition. Based on Porters’ five forces, ANZ Bank is involved in a situation of a high bargaining power of customers (loyalty) and the threat of substitution (Porter 1980). Reduced customer value proposition will enhance power of customers and threat of substitution (Porter 1980).

Opponents may suggest that outsourcing will contribute to emphasising competitive advantage (Mcivor 2011). The competitive advantage of ANZ Bank is trade and supply chain (ANZ Trade & Supply chain – A Competitive Advantage 2009). Focusing on competitive advantage will enhance customer value proposition (Piggott 2012). It will assist ANZ Bank achieve its business objective. However, ANZ Bank outsourced 50 jobs include a head of human resources, credit officers and business analysts (Wade and Hawthorne 2012). Fail to package requirements and manage contract efficiently will often result in poor performance and raising cost (Scott 2008).

If poor quality services are provided and ANZ Bank fail to control this, customer value proposition will be negatively affected. Therefore, the risk of reduced customer value proposition is a significant issue that ANZ Bank should consider. Reputation The second significant issues facing ANZ Bank will be the reduced reputation in light of ANZ Bank sends jobs overseas (Wade and Hawthorne 2012). According to utilitarianism, ANZ Bank’s manager should make decisions not only based on responsibilities to the company and shareholders but also employees and society (Hartman and DesJardins 2006).

Staff reduction in domestic industry will negatively impact unemployment rate. The less society responsibility will influence reputation. Applying SWOT analysis to this case, weaken the internal strength of the worthy brand will put ANZ Bank in a less competitive position (Agarwal, Grassl and Pahl 2012). Critics of this issue may suggest that outsourcing is a method for cost saving. Based on deontology, ANZ Bank’s manager has to make decisions on the basis of responsibilities to the company and shareholders (Hartman and DesJardins 2006).

Outsourcing is an effective way to execute responsibilities. ANZ Bank (2012) announced that customer focus is a strategy to drive competitive advantage. Indeed, outperformance of customer service will enhance reputation ANZ Bank much more significantly than outsourcing. However, Waters (2012) pointed out that offshoring may cause workforce problem which will threaten the reputation of ANZ Bank. If ANZ Bank fail to outperform competitors with customer service, the reduced brand image may lead ANZ Bank lose market share.

Hence ANZ Bank will have to consider the potential problem of reputation. Security risk The third issue that ANZ bank should aware of is security risk which can strongly affect success of outsourcing (RBA tells bank to go slowly 2012). Nassimbeni, Sartor and Dus (2012) suggests that as the foreign organisation may have less protect in a cultural and legal environment, the security risk become more relevant. The security risk increases as sensible data are available for providers, intermediaries and sub-contractors (Nassimbeni, Sartor and Dus 2012).

The outsourcing industry which builds relationship with ANZ Bank can make profit through selling customer information to ANZ Bank’s competitors. Based on value chain, leak of customer information will reduce value of service (Needle 2010). Customers may switch to competitors. It can be argued that there is a contract which would protect data and customer information. The contract is legal protection tool to constrain operators (Nassimbeni, Sartor and Dus 2012). However, even if there is a contract, it does not guarantee everything will operate smoothly.

The level of legal and judicial environment will affect the effectiveness of contract (Nassimbeni, Sartor and Dus 2012). For example, Vodafone has been suffered customer privacy leaks. It leads Vodafone faces penalties of up to $250,000 (Sydney Morning Herald 2011). Therefore, it is very important for ANZ Bank to consider security issue. Conclusion Therefore it can be concluded that ANZ Bank should reconsider customer value proposition, reputation and security risk in response to the recent outsourcing strategy. Reference List Agarwal, R. , Grassl, W. and Pahl, G. 012, ‘Meta-SWOT: introducing a new strategic planning tool’, Journal of business strategy, vol. 33, no. 2, pp. 12-21, viewed 10 May 2012, Business Source Premier. ANZ, 2012, Our company: profile, Australia and New Zealand Banking Group Limited, Melbourne, viewed 6 May 2012, < http://www. anz. com/about-us/our-company/profile/>. ANZ Trade & Supply chain – A Competitive Advantage, 2009, Australia and New Zealand Banking Group Limited, Melbourne, viewed 6 May 2012,<http://www. anz. com/resources/7/0/70bd2e804fdef847af02ef0c11c71176/ANZ+Trade+and+Supply+ChainOur+Awards+and+Polls. df? CACHEID=beb387004fde32f58226d72c5b851de3>. Nassimbeni, G. Sartor, M. and Dus, D. 2012, ‘Security risk in service offshoring and outsourcing’, Industry management and data system, vol. 112, no. 3, pp. 405-440, viewed 10 May 2012, Business Source Premier. Needle, D. 2010, Business in context: an introduction to business and its environment, 5thed. , Cengage Learning, Andover. Hartman, L. and DesJardins, J. 2006, Business ethics: decision making for personal integrity and social responsibility, McGraw Hill, Sydney. Mclvor, R. 2011, ‘Outsourcing done right’, Industrial Engineer, vol. 3, no. 1, pp. 30-35. Piggot, L. 2012, Introduction to business (BUSS1001), The University of Sydney, Sydney, 18 March, viewed 6 May 2012, < http://blackboard. econ. usyd. edu. au/ @@/81A8AC3019FFF9D178B10ACC0DBF3F0A/courses/1/BUSS1001_SEM1_2012/content/_559616_1/embedded/BUSS1001_Sem%201%2C%202012_Week%203%20Lecture. pdf> Porter, M. E. 1980, Competitive strategy: Techniques for analyzing industries and competitors, Free Press, New York. ‘RBA tells bank to go slowly’, 2012, Sydney Morning Herald, 29 March, viewed 6 May 2012, <