Assignment on International and Global Business
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Added on 2020-05-28
Assignment on International and Global Business
Added on 2020-05-28
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Running head: INTERNATIONAL AND GLOBAL BUSINESSStrategy formulation for international expansionName of the studentName of the universityAuthor Note:
2INTERNATIONAL AND GLOBAL BUSINESSTable of ContentsIntroduction......................................................................................................................................3Overview..........................................................................................................................................4Structural Difference of the Different Markets...............................................................................4Estimation of the Potential Size and Profitability of the Markets...................................................6France..........................................................................................................................................6South Korea.................................................................................................................................6Brazil............................................................................................................................................6Potential Problems...........................................................................................................................7Future Developments.......................................................................................................................7Brazil............................................................................................................................................7France..........................................................................................................................................8South Korea.................................................................................................................................8Consideration of Foreign Exchange and Trade Implication............................................................9Cultural Aspects Impacting Entry...................................................................................................9Conclusion.....................................................................................................................................11References......................................................................................................................................12
3INTERNATIONAL AND GLOBAL BUSINESSIntroductionThe Commonwealth Bank of Australia is a multinational Australian bank having itsheadquarters in Sydney. Its business is spread over a wide range of markets across the world.These include New Zealand, Fiji and some other selected Asian markets, the United States andUnited Kingdom (www.commbank.com.au). The bank was established in the year 1911 and wasturned into a public company in the year 1991. The bank provides a number of different servicesthat includes financial services, retail business, fund management, institutional bankingactivities, insurance services and many more as such. It is the largest company listed in theAustralian Securities Exchange and has a wide range of banking products under its belt. Thementioned Australian bank has been gradually increasing its presence outside the shores ofAustralia and is pursuing fresh opportunities in distant lands. The management of the bank hasplans to enter new markets in Asia and other markets of different continents to explore newopportunities. The international expansion of the business will make it one of the top rankedbanks in the globe and increase its profit margin (www.commbank.com.au). While resources andcapabilities are certainly important, recent work on the following have implied that the strategiesare modified according to the characteristics of the particular context in which the organizationoperate. The host country where the business decides to make an entry and the native institutionsof that particular country plays an important role in the formulation of the key strategies to besuccessful in the long run. A proper analysis of the theory developed specifically out of the changes to globalmarkets has shown very little development of the standard theories of market segmentation,proper pricing and appropriate pricing methods and distribution channels which was the maintheme of the local marketing theory (Ferreira et al. 2014). The markets nowadays are wellassessed before a firm actually starts operating. Because of the scientific and well calculatedassessment made by the organization, the company will not face any major difficulty after theyenter into the market.
4INTERNATIONAL AND GLOBAL BUSINESSOverviewStructural Difference of the Different MarketsThe main aims of the Commonwealth bank of Australia are to establish its influence inthe different strategic locations of the World. This includes the Asian market and some selectedmarkets of Europe and South America. Apart from targeting the developed economies of Franceand South Korea, it has plans to establish operations in the developing economy of Brazil. Theplan of the organization is to develop some specific and well designed financial plans accordingto the demands of the market (Geringer et al. 2016). The organization has to make sure that theyhave the adequate strategies in place for each of the selected countries namely France in Europe,South Korea in Asia and Brazil in South America. Starting with the cultural capital of Europe, France is one of the largest and mostpowerful economies of the modern world. It occupies the 8th position in terms of economicprowess of the globe. It also attains its position because of its position within the EuropeanUnion strong economic zone. In general the commercial environment of the mentioned countryis favorable for the companies that have plans to establish their business in the country. Thoughthere are some striking cultural and social differences which will create some issues for themanagement of the Commonwealth bank, it will not pose a serious problem in the developmentof the organization in the market (Papadopoulos and Heslop 2014). The people in France havethe interest to try out new products and explore other opportunities that come their way.However the presence of a strong national feeling makes them more inclined towards the localcompanies. According to, Geringer et al. (2016) the competition in the banking sector can befierce because of the presence of a large number of developed and proven banks in the markets.Like the other European countries the traditional distribution channels are being dominatedgradually by digital and sharing economy. This makes competition even fierce for theorganization. The management of the bank must make sure that they introduce the business inFrance which will provide all digital solutions to the consumers of the bank (Peteraf Gamble andThompson 2014). Just because of the digitalization of the modern French banking system, thenon-financial agents are regularly being offered incentives to function more transparently andefficiently to help the bank to provide the services to the consumers.
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