International & Global Businesses Report : Westpac Banking Corporation
Added on 2020-05-28
19 Pages4308 Words34 Views
Running Head: International & Global BusinessesWESTPAC GROUPInternational & Global BusinessesGroup International Expansion Report
International & Global BusinessesP a g e | 1Table of ContentBrief Background................................................................................................................................2Global Expansion................................................................................................................................3Points to take into consideration by Westpac on how to go global..........................................4Banking Sector in Brazil.....................................................................................................................6Current Features of the Banking system in Brazil......................................................................7PEST analysis.................................................................................................................................8Banking Sector in Finance...............................................................................................................10PEST analysis of France.............................................................................................................11Banking Sector of Korea..................................................................................................................12Salient feature of the South Korean Banking Sector...............................................................13PEST Analysis of South Korea...................................................................................................13Recommendation..............................................................................................................................14Conclusion.........................................................................................................................................15References........................................................................................................................................16
International & Global BusinessesP a g e | 2Brief BackgroundWestpac Banking Corporation, Commonwealth Bank of Australia, National Australia Bank and Australia and New Zealand Banking group are the four largest and the biggest retail banks in Australia having the AA rating and serving the population since decades. The banking system in Australia is undergoing progressive deregulation and privatization, with a large number of foreign banks getting the permission to enter into the financial market the competition is getting intense amongthe existing and the new players. It is the Reserve Bank of Australia which sets monetary policy and regulates the payment system (Vincent, 2016)Westpac Banking Corporation is the oldest bank of Australia which has been servingthe people since last 200 years. The bank is one of the most trusted banks amongst the population owing to its wide range of financial service offering, and its vision to become one of the world’s great service companies, helping the customers, communities and people to prosper and grow. Westpac is Australia’s second largest company employing over 40,000 people across the world and serving more than 13 million customers worldwide(Cranston,2017) Westpac has its headquarters located at Sydney and is flourishing under the leadership of Brian Hartzer (MD & CEO). Westpac earned revenue of 21.64 Billion AUD in the year 2015 and its financial result of FY 16-17 are promising as well (Pomering, 2017)Over the period Westpac realized that globalization in banking is extremely importantfor the business as well as for the benefits of people in different nations. With this aim in mind Westpac is looking to explore banking opportunities in the markets of France, Korea & Brazil. The purpose of the report is to assess the banking
International & Global BusinessesP a g e | 3opportunities in these countries, understand the macro environment of the countries, the banking habits of the population, cultural difference in these countries and finally make a recommendation based on all the above factors for Westpac to make an entry.Global ExpansionIt can be understood as planned expansion of company’s business activities into different countries around the world, it is often confused with making investment in foreign countries but in actuality it is more than that; the concept lies in maintaining an actual business presence in other countries, serve the nation and its population and raise the envelope of product and services offered in those countries. Entry of banks in foreign countries depends on the bilateral treaties existing between the countries, but majorly there are 2 forms of entry on a foreign market (Williamson, 2014).Greenfield investment-This involves setting up an institution from the scratch, the investment is not limited only to human resources but also applied to capital infusion in the bank(Jensen, Cobbs & Groza,2014)Acquisition of a control position from a local institution, this control can range to any percentage.Entering the market via Greenfield investment helps bank to take advantage of international reputation, these are beneficial for less stable economies or underdeveloped economies as people are looking for secure placements. By acquiring a control position in local institution helps the bank to get access to the existing banking clients and also gets a better access to the market knowledge. Westpac being a foreign bank and having a reputation of being extremely successfulis better positioned to offer products and services requiring a global platform, a considerable amount of capital with a strong technological content, as well as the experience and the skills needed to provide sophisticated products to the consumers(Rugman & Verbeke, 2017)
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