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Discuss about the Strategic Analysis of Kiwi Bank ?

Answer :


Kiwi bank is a government owned bank in New Zealand which offers services through post offices. The bank started its operations in the year 2002 to improve the banking system of New Zealand (Kiwi Bank, 2017c). Kiwi bank offers real value for money for the customers. The bank has established its shops in post offices in order to provide its service across the country. The bank has more than 800, 000 customers and the figure is consistently growing every week (Vaughan, 2012). There are more than 1000 employees in the bank with 250 PostShops (Kiwi Bank, 2017c). Thus, Kiwi bank unlike other banks offers its services on weekends as well. Kiwi bank offers the services of personal banking, business banking, international services and other banking services. Personal banking services include home loans, personal loans, savings account, credit cards, everyday accounts and investments and insurance. Business banking services include lending, savings accounts, investments, cheque accounts, credit cards, merchant services and insurance. International services include online and offline transfer of money, foreign exchange as well as foreign currency accounts. Further, the bank also offers internet banking, mobile banking, message alerts, bank statements (online) and a large network of ATMs.

The bank is making an attempt to change the traditional banking style and offer better value to the customers. Kiwi bank has won the international 2007 Financial Innovation Award. The mission of the bank is “to win the hearts of Kiwis by offering better services, better products, lower fees and better interest rates” (Kiwi Bank, 2017b).

Kiwi bank has also proved its financial stability by producing a profit of $124 million during global financial crisis (Mackenzie, 2014)). The banks also paid dividends to all of its owners.

Evaluating Strategic Business Plan

SWOT Analysis


·         Large network of sales and distribution across the country

·         Strong brand recognition

·         String financial stability

·         Exponential growth



·         Huge investment in the research and development department


·         Evolving new market segments

·         Consistently increasing income of the customers

·         Emerging global market

·         Great opportunity to increase growth and profitability



·         Government rules and regulations

·         External business risks such as bad debts from the defaulters

·         Maintaining cash flow

·         Changes in taxation system

·         Increasing cost of labor and technology

·         Rising rate of interest

·         Technological issues


Kiwi bank has huge distribution and sales network across the country which it has developed within a short span of time. The bank has established its strong brand identity across the country through its quality services and strong distribution network (New Zealand Post, 2017). The bank has strong financial stability and the bank has proven its capability by creating profits during the global financial crisis (Scoop, 2017). This proves that the bank has strong financial structure. The bank has been growing its revenue exponentially and has a high growth rate as compared to its competitors (Radio NZ, 2017).



In order to penetrate the market segment, the bank has invested huge amount of money in research and development department due to which it is not able to generate high profits, though the bank would be enjoying the profits in the future.


Kiwi bank has numerous opportunities such as exploring new market segment. The income of the consumer is consistently increasing in the New Zealand which is a great opportunity for the bank. The bank could target the new market segments in order to increase its existing customer network. Another opportunity for the bank is the emerging global markets for market expansion. Thus, there is a huge opportunity for the bank to increase its growth and profitability.


The bank faces challenges due to strict government regulations of the country. Kiwi bank has to abide by all the laws and regulation of the country in order to maintain a smooth flow of its operational activity. There are external business risks involved in the banking industry such as bad debts which could again reduce the overall growth and profitability of the company. Cash flow is another challenge faced by bank. In order to maintain banking operations (personal banking and business banking), the bank has to maintain its cash flow so as to meet the needs of the customers. The government makes amendments in the taxation policies which disturbs the activities of the bank. Kiwi bank is facing the challenge of increasing costs of labor, technology changes, marketing and other operational activities which again affects the profitability of the bank. Rate of interest is on a consistent rise which affects the lending rate of the bank and also has an impact on the customers’ pocket. Further, there are technological problems within the company which again hampers the business of bank.

Critical Success Factors

Kiwi bank strongly focuses on its customers through its outstanding banking services. Bank’s transaction account services offer great benefits for the customers. The bank charges no fee for account management and charges a meager amount for transaction. Kiwi bank’s savings accounts and investments services give the customer an opportunity to earn interest on their tax money. Credit card facility of bank charges very low interest rate giving the time of 55 interest free days to the consumers. Its banking operations allow a consumer to perform their banking operations wherever they want. The visa debit card facility allows them to pay online and overseas for their purchases (Kiwi Bank, 2017a). The business overdraft facility of the bank charges the interest only on the amount which is used by the customer. The business insurance service of the bank offers the customers protection.


Advance Research and Development

Kiwi bank has made huge investment on its research and development cell in order to identify the needs and requirements of the customers. The bank has very well incorporated the customer requirement within its system in order offer the best services to the customers. The bank has over 250 Post shops across the country which gives it an edge over its competitors (Fulton, 2016). The bank has been consistently thriving to unlock the value in its target market to increase its profitability. In order to do so, the bank has been identifying ways to enhance its relationship with the customers. The bank has devised a strategy of product diversification which aims to offer greater range of products and services to the customers along with value added services.

The bank has taken initiative of business markets, identity validation and government services, bancassurance and wealth. Business market aims to expand the current proposition of bank by offering foreign exchange trading and SME lending services to the customers. Identity validation and government services aim to offer ID validation and processing of applications by business.

Further, the bank has also invested to build its cost effective processes to improve its operation risk management model.

Target Market

Kiwi bank’s primary target market is personal banking market through which the bank has developed over 800,000 customers within a short span of time (Vaughan, 2012). The bank is making consistent efforts in order to penetrate its existing market by enhancing its relationship with the existing customers.

Evaluating Implementation of Strategic Business Plan

Strategic business plan helps to create goals and objectives for an organization through communication, cultural awareness and regular control and monitor of the activities (Freeman, 2010).

Kiwi bank has targeted the personal banking market segment and business banking market segment. Now the bank could spread its wings into the rural business segment order to increase its profitability. Rural business finance, farm development package and Farm start-up package are the financial products through which Kiwi bank could enter new market segment and increase its profitability.

Rural Business Finance

This product would offer fixed, floating and bill finance options in order to fulfill the unique needs of rural business segment. The customers would benefit through the flexible repayment structure of the program (Rabo Bank, 2017). The tailored interest rate periods would offer value addition to the customers. This program would also offer loan top ups and progressive draw-downs facility to the customers. Further, the customer would also have an option to choose from the conventional interest rates of bank. The service would also offer the customers a flexible line of credit along with low monthly management fee and monthly credit interest (ANZ, 2017)).


Farm Development Package

The service would aim to bring a complete solution for farmers by giving them access to short term funding through which they can develop their farm in a peaceful manner by complying to the government laws. The farmers would no more have to rely on high interest rate option. The farm development package would ensure that the farmers can invest in their farm activities to ensure environmental sustainability (Rural Finance, 2017).

Farm Start-up Package

Farmers have been facing challenges to start their business activities. Farm start-up package brings an opportunity for them to develop a realistic business plan. The service would offer them special lending facilities along with banking benefits through which they would be able to attain their farming goals and objectives (SBS Bank, 2016). The service would offer them term loan and overdraft facility up to $50, 000 so that they can set up their pre-operational activity required for the business. The customers would also get an opportunity to attend business planning workshops to support their business activities.

In order to implement the plan following methods would be adopted:

Strong communication channel

Communicating the product awareness across the internal and external customers is an essential component of strategic planning (Hill & Jones,2009). The external customers are farmers who are planning to indulge themselves into business activities of farming. The internal customers are the employees and managers of Kiwi bank who needs to understand about the product. Following methods would be adopted for the external customers:

Advertisements: The information about the product would be communicated through commercial ads, newspaper ads, bill boards and social media network. The aim of this activity is to create product awareness among the external customers.

Sponsoring an event: In order to reach the potential customers, a small event could be sponsored by Kiwi bank within the rural areas to create awareness among the target audience.

The internal customers or employees also need to be communicated about the new products and service of bank so that they can persuade the customers to buy the new service. This could be done through training, meetings and discussion with the managers and employees.

Effective Monitoring & Control System

Now once the plan has been implemented, it also needs to be monitored and controlled on regular basis. Effective monitoring and control system would make sure that each and every step is being carried through appropriate methods.

Tracking sales: The sales of the new products could be tracked after six months in order to monitor the results of the plan (Baines & Fill, 2014). If the sales are increasing then that suggests that the plan was successful.

Tracking the competitor: If the competitors have also adopted the same strategy then that suggests that the strategy has been successful to attain the SMART goal.

Evaluating the Outcome

Increased base of customers due to product attractiveness

The sales of Kiwi bank saw a rise its revenue because the product was a great hit among the customers. The farmers who were planning to set up their business received great help from the service through which many of them have established their farming businesses successfully. The bank has created huge base of loyal and permanent customers through its attractive services.

Loss of brand identity

Kiwi bank has lost its current brand name because in order to meet the requirement of farmers, the bank could not manage its internal operations effectively. Further, the customers also got confused about the brand perception of the bank.

Organizational Structure

Level of Hierarchy

There are three levels of hierarchy including top level managers, middle managers and front level managers. Kiwi bank has administrator level, executive level and lower most level hierarchy. Administrator level includes bank branch manager, financial planning director, auto remarketing manager, Sr. BDM and Commercial Lending Manager. Executive level includes associate branch manager, commercial loan manager, consumer loan manager, commercial credit analyst, branch coordinator. Lower most level includes taxation executive, head clerk, loan executive.

Kiwi bank has a huge network of sales and distribution with over more than 800, 000 customers. The bank has more than 250 Post shops across the country. It has more than 1000 staff members with its ATM services located across the country. The bank operates through post offices which gives it an edge over its competitors.




In order to enter the international market, the bank needs to create a team of senior management who would handle the market of Australia. The bank needs to have a team of Chief Executive Officer, Chief Operational Officer for specific group, Chief Financial Officer, Chief Risk Officer.

A Chief Executive Officer for the Australian operations would be appointed to take care of all the financial, marketing, HR and operational activity of the bank. Another Chief Executive Office would be appointed for the New Zealand region to manage the regional affairs. COO, CFO and CRO would be the part of the top management team to handle the affairs and activities of Australia. Further, a team of CEO, Securities and Banking, Private Bank Head, Chairman, Market Research Analytics, Vice Chairman and Talent Acquisition Head would also be developed specifically for the Australian market. 

The above organizational structure would help the bank to enter the international market. The above management team would be responsible for developing the entire operational team of administrative profile and lower most profile.



ANZ. (2017). Rural Finance. Retrieved from:

Baines, P., & Fill, C. (2014). MARKETING 3E P. UK: OUP Oxford.

Freeman, R.E. (2010). Strategic Management: A Stakeholder Approach. Cambridge: Cambridge University Press.

Fulton, T. (2016) Kiwibank plans returns to Christchurch central city with standalone branch. Business day. Retrieved from:

Hill, C., & Jones, G. (2009). Strategic Management Theory: An Integrated Approach. Australia: Cengage Learning.

Kiwi Bank. (2017a). Accounts and Services. Retrieved from:

Kiwi Bank. (2017b). More about us. Retrieved from:

Kiwi Bank. (2017c). Our Story. Retrieved from:

Mackenzie, D. (2014). Kiwibank deliver NZ post a profit. Otago Daily Times. Retrieved from:

New Zealand Post. (2017). Grow the Bank. Retrieved from:

Rabo Bank. (2017). Loans. Retrieved from:

Radio NZ. (2017). NZ Post profit down 19 percent after Kiwibank share sold off. Radio NZ. Retrieved from:

Rural Finance. (2017). It’s about adding value to you. Retrieved from:

SBS Bank. (2016). Rural Loans. Retrieved from:

Scoop. (2017). KGH & Kiwibank results for the six months ending 31 Dec 2016. Scoop Independent News. Retrieved from:

Vaughan, G. (2012). How the C-operative Bank wants to be as big as Kiwibank by attracting customers with a caring attitude. Interest. Retrieved from:


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