International Business Assignment: International Expansion
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Added on 2020-05-28
International Business Assignment: International Expansion
Added on 2020-05-28
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Running head: INTERNATIONAL EXPANSIONInternational ExpansionName of StudentName of the UniversityAuthor’s Note
1INTERNATIONAL EXPANSIONExecutive SummaryThe study reflects on the business expansion of ANZ bank, which has acquired the commendableposition in the financial sector. After developing the successful business practices in Australiaand New Zealand, ANZ bank is now focused on expanding the business in France, Brazil andKorea. The study would thus develop adequate knowledge about the business market place andthe theoretical background for understanding the business feasibility to expand in differentcontinents. This banking company has been much committed to develop the corporate socialresponsibility by taking account of the environmental, social, and economic opportunities andrisks. It is the 5th largest listed companies among the other banking entities in Australia. It hasbeen observed that the consumer market in France is quite extensive and demands are prioritizedin a significant way. It can be recommended that ANZ bank should adopt the partnering marketentry strategy to establish the business joint venture with the retail banks. On the other hand,observing the insecure political scenario, it can be recommended that ANZ bank can secure theforeign business position by adopting the licensing market entry strategy.
2INTERNATIONAL EXPANSIONContentsIntroduction......................................................................................................................................3Company Background.....................................................................................................................3Market Entry....................................................................................................................................4Market Analysis...............................................................................................................................4Porter’s five forces.......................................................................................................................4PEST............................................................................................................................................8Foreign Exchange and Trade Implication in France, Brazil and Korea........................................14Potential Risk in France, Brazil and Korea...................................................................................15Recommendation and Conclusion.................................................................................................16References......................................................................................................................................18
3INTERNATIONAL EXPANSIONIntroductionThe advancement in the business field signifies the innovations and the implementationof the useful strategies. These strategies are directly related to the target market in which thecompany is operating in. Several characteristics of market plays active role in modifying htestrategies incorporated by the business organisation (Arnold 2013). The study reflects on thebusiness expansion of ANZ bank, which has acquired the commendable position in the financialsector. After developing the successful business practices in Australia and New Zealand, ANZbank is now focused on expanding the business in France, Brazil and Korea. The study wouldthus develop adequate knowledge about the business market place and the theoreticalbackground for understanding the business feasibility to expand in mentioned countries. Themarket analysis will be done using the PEST analysis and Porter’s generic model. Theinformation acquired through the market analysis will then be compared with the market entrystrategy to identify the challenges the company is likely to face in the target market. Company BackgroundANZ Bank has captured the third position after Commonwealth Bank and WestpacBanking Corporation in terms of market capitalization. The Australian and New ZealandBanking Group Limited or ANZ Bank has the potentiality of deriving largest profits in thecommercial and retail banking sector. This banking company has been much committed todevelop the corporate social responsibility by taking account of the environmental, social, andeconomic opportunities and risks. It is the 5th largest listed companies among the other bankingentities in Australia (Anz.com.au 2017). Apart from Australia and New Zealand, the companyhas been operating in other markets around the globe. Almost 46,000 staffs are associated forproviding the retail, institutional, and commercial supports to the potential customers. They even
4INTERNATIONAL EXPANSIONprovide the remarkable corporate offerings in the core market, adequate capital flow across theregion, and regional trade for the future prospects. The purpose of the company is to shape theworld within which the communities thrive. The company now seek to expand their market inFrance, Brazil and Korea utilising partnership strategy for entering the market. Therefore, thestudy would develop the insightful ideas about the environmental influence and the regulatoryfactors that can help the organization to develop the strengthened entity in outside countries aswell. Market EntryThe company is looking forward to enter the specific markets with adequate strategies forpartnering with the local firms operating in the target markets. Hence, the preferred strategicalliance ANZ can utilise for entering the countries in three different continents is the jointventure where they will be partnering with the local financial organisations. This has thepotential to significantly reduce the threat in the new market. This will help the organisation inresolving the social and political issues they might face while operating in the target market.Moreover, this will accelerate the process of gaining the market knowledge. Market Analysis Porter’s five forcesThe following section will identify the market structure and profitability lies within eachof the target markets. The Porter’s Five forces analysis will help in acquiring adequateinformation on the market structure and profitability by identifying the nature and number of thecompetitors in each of the target markets. Porter’s FiveFranceBrazilKorea
5INTERNATIONAL EXPANSIONForce AnalysisBuyer PowerThe high degree ofcompetition in Franceenables the customerto choose overorganisation forgreater profit.Moreover, substitutesin the market alsodivert the focus of thecustomer to investelsewhere thatincreasesthebargaining power ofthe buyers in themarket (E. Dobbs2014). Similar to the other twocountries, Brazilianbuyers holds high levelof bargaining power.However, the lowincome of the greatersection of thepopulation supplementsin increasing thebargaining power of thebuyers. Bargaining power ofthe buyers inconsidered being highin the Korean marketdue to the greatercompetition and highthreat of substitute.Moreover, Supplier PowerEntering a foreignmarket makes thecompanies purchasetheir raw materialsfrom number ofsuppliers. Dominantposition of theBargaining power of thesuppliersisconsiderably mediumdue to the moderateavailability of the rawmaterials available. Supplier power incase of Korea isconsiderably low dueto the high availabilityof raw materialsrequired in thebanking sectors.
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