Business Model Comparison Of Commonwealth Bank And Barclays PLC Bank: Ebusiness Assessment Answer

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Question :

eBusiness Assignment Autumn 2020

Learning Outcomes assessed:
1 and 3

Assignment Guidance

The learning outcomes assessed in this assignment are as follows:

Module Learning Outcome
LO 1
Identify and justify clear objectives, formulate company and marketing strategies and evaluate the advantages and disadvantages of e-business for such strategies.
LO 3
Demonstrate a practical understanding of the costs, revenues and profitability of e-business
  • It is the student’s responsibility to familiarise themselves with the Academic Dishonesty and Plagiarism policy contained in the Programme Handbook.
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  • This assignment is worth 40% of the overall final mark for the module.
  • Students should write no more than 1600 words (+/- 10%) for this assignment.
  • Students are encouraged to read widely in preparing for the assignment, making reference to articles in academic journals and other relevant sources.
  • All references should be cited in text and included in a reference section at the end of the report using the Harvard Referencing Scheme.
  • The Statement and Confirmation of Own Work must be completed and submitted with the assignment.
  • This assignment must be submitted by the due date and time as given on the front of this assignment.
  • Please refer to the Assessment Criteria contained in the Programme Handbook which shows how the level of marking relates to your standard of work.


Revolut advises that it has taken a brand new approach to individual and commercial financial management. Especially in comparison to many traditional banks and Foreign Currency Exchange (FX) organisations in that it offers services which enables customers to use it as though it is an ordinary bank. It also offers other banking and investment services such as transferring money into a different currency. In this assignment you are being asked to consider Revolut and to compare it with another, more traditional financial organisation of your choice, such as a bank or an FX company that you are familiar with.

The above is not intended to limit you in any way, and you may use a real organisation as a model.

The aim is to use a financial organisation with the potential to benefit from significant eBusiness activity.

Assignment tasks

There are FOUR (4) tasks set out below. Please complete all FOUR (4) tasks for your chosen organisation (see scenario/topic guidance above).

Task 1(25 marks)

Describe the two organisations and compare and contrast their business models. In your response you should consider:

How their products and services are marketed.

  • How customers are acquired.
  • What the value proposition is and how it is achieved.
  • How revenues are earned.
  • How customer service is provided e.g. how faults, complaints or problems are addressed.

Task 2(25 marks)

Considering Revolut, identify what you believe may be the most significant value for the organisation and their customers and explain why you believe this.

Considering how Revolut undertakes their activities, identify an e-business technology which your chosen financial organisation could benefit from adopting and explain how that can add value to their business.

Examples are needed to illustrate and support your ideas. Show how value is created compared to the more traditional ways which individuals and organisations can manage their finances. Evaluate how sustainable that added value is.

Task 3(25 marks)

For the e-business technology identified in task 2, use an academic framework to evaluate how the adoption of your recommended technology could impact on each element of the business model. Undertake a cost – benefit analysis to demonstrate the extent to which such a change could offer real value for money (cost of technology with regards to the realised benefits).

Task 4(25 marks)

For either Revolut or your chosen financial organisation, critically evaluate the advantages and disadvantages of an eProcurement strategy.

Select TWO (2) eProcurement technologies which would be beneficial and critically discuss the use and application of these techniques justifying why they could be appropriate for your chosen organisation. Choose TWO (2) further methods of eProcurement which you believe would NOT be beneficial and explain why.

Methods you can choose from include:

  • e-Tendering
  • e-Auctions
  • Vendor management
  • e-Purchase orders
  • e-Payments
  • Online auctions
  • Online direct purchasing
  • Online information search
Show More

Answer :

Task 1

Two financial organisations and comparison of the contrast of their business models

The Commonwealth Bank and Barclays PLC bank is considered for the current study. Commonwealth Bank of Australia gives financial and banking services to small business, retail, institutions and corporate. Barclays Bank PLC is an investment and international unit of Barclays corporate. 

Business FeaturesCommonwealth BankBarclays PLC
Marketing strategies of these companies products and services.Commonwealth Bank’s major marketing strategies lies in the ads, segments while the matches of The Cricket Show.  Presence of social media is also a major promotional strategy (Pearson, 2019).Having a good hold over the economies of the UK and US helped the company to create a portfolio, which is diversified. This aided it to be technologically forward and engage with fortune 500 companies. Distribution and brand equity strategy makes it different from other banking structures. 
Customer AcquisitionCommonwealth bank used the technique of FX client acquisition. They exercised the method of behavioural economics for the latest in-app medium with which customers save in regards to certain goals. Studies showed that one among four Australians who do not enjoy life as they are unhappy with the management of their finances (Cornish, 2016). Thus, the bank added a Goal Tracking feature in its app, that enables customers to set a  goal concerning personal saving.

The bank aims to be a diversified bank that has a transatlantic consumer. It wants to be a wholesale bank with a worldwide reach. This is how customers and clients need will be fulfilled( Thomas, 2019).
What are the value proposition  and achievement technique of the same

The major value proposition of the bank is to put the customers before the needs of the bank (Hussain et al. 2017). Their television advertisements also have a big impact on the value proposition of the bank.Capital management of Barclay’s will try to increase shareholders by controlling the level of mixing of its capital resources as the bank is fully dependent on maintaining its resources adequately (Adesara, 2016). 
Revenues earnedBank stated an annual net profit after deducting tax is $8.49 billion dollars for till June 2019The total turnover of Barclays UK is 13.7 billion British pounds. Barclays US approximately had a turnover of 7.7 billion British pounds.
Customer service like addressing faults, problems and complaints. 

The bank values customers and hence their customer redressal techniques are very fast. Customer can address their data and complain or seek redressal anytime.The organisation being disjointed makes their customer service poor (Detrixhe, 2020). Procedures of Online banking and their letters don't match.

The Commonwealth bank shall be preferred over Barclays  PLC as the bank is less complicated and are forward in their online banking techniques. This will save the time of the consumers whilst giving security.

Task 2

The most significant value of the organisation and customers of Revolut and reasons for the same

Revolut is the most developed digital bank in the UK and the most valuable financial technology startup. The company is popular because they could discover important value in just a few dollars. Another significant value is that they released the customers' data via search. The latest features introduced predictive search and filtering the result on a real-time basis according to the customers' type. Revolut have always dedicated their technology interface to make the user experience easy. The crypto products being an individual offer is of the same pattern as the Revolut characteristics. The movement within the application is made easier and effortless due to this, which is very different in the case of traditional banks (Dominova, 2016). The customers get highly affected with their policy of high ownership that they take of their actions. Revolut has a very fast work mode for today's customers as they work in a hard and fast culture. Revolut implemented this culture after learning from their drawbacks.

E-business technology, which can be chosen for the concerned firm

The technology selected for the concerned bank is the method of AI-powered personalisation. This technique will help the bank provide a smoother customer experience to its consumers. For digital companies which use e-commerce has emphasised on AI technology (Pearson, 2019). AI holds a lot of potential in regards to the dynamics of e-commerce, which has adaptable targeting. Revolut will be benefitted, as they will be able to put the right pitch in front of the correct customers in the correct time, on the correct platform. 

Comparison of Revolut with traditional banks

Advantages of Revolut over traditional banks are that the set up of customer accounts is easier and quicker. Paperwork is reduced and the process becomes less lengthy and complicated. Onboarding of customers is quicker. Just by downloading a banking app, a customer can get various information at a go and they do not have to stand in long queues for simple banking questions (Mbama and Ezepue, 2018). The set up of the business of an online model is much cheaper than setting up of contemporary banks. The major advantage is the real-time banking features of Revolut, which gives the bank a leap over the traditional banks. In today's generation, net banking is a very important aspect, as people do not have time to invest. In the case of certain banks, net banking is borderless that helps access ATMs numerously all over the world

Task 3  

Impact on each element of the business model

The bank is likely to apply the AI-powered personalisation technology in the banking operation. This automated banking operation will ensure success of the bank and it will surely bring a lot of change in the development of the business model of the organization. The impact can be estimated as follows- 

Key Partners: The dependency on majority of the banking partners will be reduced as the AI service agency will control all operations. 

Inputs: The database and operational details of the consumers will be in this part. 

Outputs: The transactions and accounts control services that this AI powered tool is providing (Keane, Cormican and Sheahan, 2018)

Value Proposition: One touch service for the consumers as they do not have to perform any physical work or visit to the bank.

Skills: Technicians are required in this regard to ensure the AI operations AI Operations

Trainers: The AI trainers are essential for the employees to keep them updated with the system requirements (Joyce and Paquin, 2016)

Users and Buyers: The consumers of the target market who are comfortable with the virtual account operation. 

Resource Consideration: The essential software and the system controller of the AI 

Trainers: They are essential as the AI control needs better access and thus training extent matters a lot (Keane, Cormican and Sheahan, 2018).

Channels: The digital channels for the organizations based on social and digital presence 

Costs: AI development cost and setup maintenance cost (Joyce and Paquin, 2016)

Revenue Streams: Consumers channels, account charges and the transaction fees 

Stakeholders: Shareholder of the organization and the consumers 

A cost – benefit analysis

It is vital to determine the cost and profit analysis with the AI enabled services of the organization. 

Start-up costsCost ($)
Purchase buildings$1,50,000 
Plant and production equipment (AI Set Up Cost)$3,000,000 
Office equipment$20,000 
Instruments and Maintenance service$10,000 
Initial marketing costs before first sales come in$30,000 
Salaries and wages during start-up phase$10,500 
Total start-up cost$5,000,000 

P&L ItemYear 1Year 2Year 3
Sales$2,000,000 $3,000,000 $4,000,000 
Cost of AI enabled service installation and maintenance  (%)
Gross profit / net sales$4,000,000 $8,000,000 $15,000,000 
Advertising$30,000 $30,000 $30,000 
Development charges$20,000 $20,000 $20,000 
Insurances$15,000 $15,000 $15,000 
Interest charges on debt$10,000 $10,000 $10,000 
IT costs (internet, web site, etc.)$50,000 $50,000 $50,000 
Professional fees (accounting, legal, etc.)$20,000 $20,000 $20,000 
Rent$15,100 $15,000 $15,000 
Salaries and wages$10,000 $10,000 $10,000 
Utilities (water, power, gas)$2,000 $2,000 $2,000 
Total expenses$2,614,900 $3,715,000 $4,815,000 
Profit before tax


Thus, a three year tendency has been developed but it may like to get change with time. 

Task 4:

With the innovation of technologies, e-procurement is the latest method of channelling buyers and sellers. There are various advantages of e-procurement such as organisational performance is enhanced, control over the organisation is improved, a proper record is created for reporting and reconciliation (Rajkumar et al. 2019). The main pros of the method are that it is cost-saving and easily reconcilable with the earlier software. However, there are various disadvantages of the same, like managing at a microscopic level, it is not appropriate for direct materials, onboarding problem for established providers,

The two chosen topic, which shall not be considered for e-procurement, are e-tendering and e-payment

E-tendering: Various portals are used by buyers and local sellers to conduct e tendering. There are various portals where buyers can participate by creating a username and password. With the help of the portal, the buyers can find various suitable opportunities and submit their expression of interest. A questionnaire has to be filled after which the procedure is complete and the buyer can submit the e-tender (Al-Yahya et al. 2018). Thereafter all the bids and documents concerning the tender is downloaded. Any queries in regards to the process can be clarified using the process of clarification. In the portal, the progress of the tender can be tracked. Notification in regards to any change can be received. All the records are accessible using the portal. Further documents can be then uploaded in the portal. The main problem of the process is the vast number of question somebody has to answer to register. Questions are many a time vague and not linked. Word limited questions defeat the purpose of the form, which asks to give a full story of the buyer. There is no flow in the questions and mainly they are confusing. The portal becomes slow when the number of bidders increases. It is a time-consuming process and can be challenging for technologically slow customers. 

E-Payment: E-Payment is the latest technique to make payments online. There are many disadvantages of the same are served fees which the getaway parties apply. Offline sales are not accessible to these payments (Lai, 2016). The method of paying online is vulnerable and open to criminal activities such as online stealing and other cybercrimes. It is highly dependent on internet connection and if that fails in-between a payment then the person, making the payment goes through a lot of harassment (Riskinanto, Kelana and Hilmawan, 2017). Customer information can easily be stolen if the lines are not protected.