ANZ Bank's International Expansion: Market Analysis and Strategies

This report examines the international expansion strategy of ANZ Bank, focusing on its potential entry into the markets of France, Brazil, and Korea. The report begins with an executive summary and company background, highlighting ANZ's commitment to corporate social responsibility. It delves into market entry strategies, specifically joint ventures and licensing, and conducts a thorough market analysis using Porter's Five Forces and PESTLE analysis to assess the competitive landscape, buyer and supplier power, and the political, economic, social, and technological factors impacting each target market. The analysis considers factors such as political stability, economic growth, and the threat of substitutes. The report also addresses foreign exchange and trade implications, potential risks, and concludes with recommendations for ANZ Bank's expansion, suggesting the most viable market entry strategies and addressing potential challenges. The report aims to provide insightful ideas about the environmental influence and regulatory factors that can help the organization to develop the strengthened entity in outside countries as well.

Running head: INTERNATIONAL EXPANSION
International Expansion
Name of Student
Name of the University
Author’s Note

1INTERNATIONAL EXPANSION
Executive Summary
The study reflects on the business expansion of ANZ bank, which has acquired the commendable
position in the financial sector. After developing the successful business practices in Australia
and New Zealand, ANZ bank is now focused on expanding the business in France, Brazil and
Korea. The study would thus develop adequate knowledge about the business market place and
the theoretical background for understanding the business feasibility to expand in different
continents. This banking company has been much committed to develop the corporate social
responsibility by taking account of the environmental, social, and economic opportunities and
risks. It is the 5th largest listed companies among the other banking entities in Australia. It has
been observed that the consumer market in France is quite extensive and demands are prioritized
in a significant way. It can be recommended that ANZ bank should adopt the partnering market
entry 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 the
foreign business position by adopting the licensing market entry strategy.

2INTERNATIONAL EXPANSION
Contents
Introduction......................................................................................................................................3
Company Background.....................................................................................................................3
Market Entry....................................................................................................................................4
Market Analysis...............................................................................................................................4
Porter’s five forces.......................................................................................................................4
PEST............................................................................................................................................8
Foreign Exchange and Trade Implication in France, Brazil and Korea........................................14
Potential Risk in France, Brazil and Korea...................................................................................15
Recommendation and Conclusion.................................................................................................16
References......................................................................................................................................18

3INTERNATIONAL EXPANSION
Introduction
The advancement in the business field signifies the innovations and the implementation
of the useful strategies. These strategies are directly related to the target market in which the
company is operating in. Several characteristics of market plays active role in modifying hte
strategies incorporated by the business organisation (Arnold 2013). The study reflects on the
business expansion of ANZ bank, which has acquired the commendable position in the financial
sector. After developing the successful business practices in Australia and New Zealand, ANZ
bank is now focused on expanding the business in France, Brazil and Korea. The study would
thus develop adequate knowledge about the business market place and the theoretical
background for understanding the business feasibility to expand in mentioned countries. The
market analysis will be done using the PEST analysis and Porter’s generic model. The
information acquired through the market analysis will then be compared with the market entry
strategy to identify the challenges the company is likely to face in the target market.
Company Background
ANZ Bank has captured the third position after Commonwealth Bank and Westpac
Banking Corporation in terms of market capitalization. The Australian and New Zealand
Banking Group Limited or ANZ Bank has the potentiality of deriving largest profits in the
commercial and retail banking sector. This banking company has been much committed to
develop the corporate social responsibility by taking account of the environmental, social, and
economic opportunities and risks. It is the 5th largest listed companies among the other banking
entities in Australia (Anz.com.au 2017). Apart from Australia and New Zealand, the company
has been operating in other markets around the globe. Almost 46,000 staffs are associated for
providing the retail, institutional, and commercial supports to the potential customers. They even

4INTERNATIONAL EXPANSION
provide the remarkable corporate offerings in the core market, adequate capital flow across the
region, and regional trade for the future prospects. The purpose of the company is to shape the
world within which the communities thrive. The company now seek to expand their market in
France, Brazil and Korea utilising partnership strategy for entering the market. Therefore, the
study would develop the insightful ideas about the environmental influence and the regulatory
factors that can help the organization to develop the strengthened entity in outside countries as
well.
Market Entry
The company is looking forward to enter the specific markets with adequate strategies for
partnering with the local firms operating in the target markets. Hence, the preferred strategic
alliance ANZ can utilise for entering the countries in three different continents is the joint
venture where they will be partnering with the local financial organisations. This has the
potential to significantly reduce the threat in the new market. This will help the organisation in
resolving 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 forces
The following section will identify the market structure and profitability lies within each
of the target markets. The Porter’s Five forces analysis will help in acquiring adequate
information on the market structure and profitability by identifying the nature and number of the
competitors in each of the target markets.
Porter’s Five France Brazil Korea

5INTERNATIONAL EXPANSION
Force Analysis
Buyer Power The high degree of
competition in France
enables the customer
to choose over
organisation for
greater profit.
Moreover, substitutes
in the market also
divert the focus of the
customer to invest
elsewhere that
increases the
bargaining power of
the buyers in the
market (E. Dobbs
2014).
Similar to the other two
countries, Brazilian
buyers holds high level
of bargaining power.
However, the low
income of the greater
section of the
population supplements
in increasing the
bargaining power of the
buyers.
Bargaining power of
the buyers in
considered being high
in the Korean market
due to the greater
competition and high
threat of substitute.
Moreover,
Supplier Power Entering a foreign
market makes the
companies purchase
their raw materials
from number of
suppliers. Dominant
Bargaining power of the
suppliers is
considerably medium
due to the moderate
availability of the raw
materials available.
Supplier power in
case of Korea is
considerably low due
to the high availability
of raw materials
required in the

6INTERNATIONAL EXPANSION
position of the
suppliers will decrease
the profitability of
ANZ. The company
should consider a
number of raw
materials that will help
them in keeping the
budget under control.
Supplier power in
France is considered
as low due to the
availability of raw
materials.
banking sectors.
Competitive
Rivalry
Leading banks like
BNP Paribas, Credit
Agricole, BPCE have
already captured the
market in France and
holds the greatest
market share. This
makes it hard for ANZ
to penetrate the market
There exist a number of
world’s leading banks
in Brazil that has
already established their
roots in the country by
gaining trust of the
customers. Some of the
leading organisations in
the banking sector of
Five of the leading
banks of Korea
namely Kookmin
Bank, Woori
Financial group,
Shinhan Financial
Group, National
Agricultural
Cooperative

7INTERNATIONAL EXPANSION
and increase their
market share.
Brazil are HSBC,
Banco Bradesco
Financiamentos, Banco
J Safra S/A and a
number of other banks.
These will pose
significant threat of for
ANZ in their expansion
in Brazilian market.
Federation and Hana
Financial group ranks
within the top 100
world’s largest bank
that has the potential
to pose threat to ANZ
in their entry in
Korea.
Threat of
Substitute
Threat of substitute is
high due to the
existence of the non-
financial organisation
like insurance
companies. People of
France tend to invest
their money in
multiple financial and
non-financial agencies
that increases the
threat.
The threat of substitute
is considerable low in
case of Brazil compared
to the other two
countries. This can be
attributed to the low
income of the
population that restrict
them to invest in non-
financial organisation.
The case of Korea is
much similar to the
one of France and
poses high level of
threat of substitute in
the market. The
French people have a
number of
opportunities to invest
their money that
increases the threat of
substitute.
Threat of New
Entry
The technological
innovation in the
Lack of technological
incorporation in the
The case of Korea is
similar to the one of

8INTERNATIONAL EXPANSION
country is
commendable that
demands ANZ to
bring innovation in
their business process
by integrating higher
level of technological
involvement to proved
greater satisfaction to
the customers.
country reduces the
threat of entry. This
reduces the requirement
of innovation. However,
economic and political
unrest in the can have
adverse effect on the
business operation in
the country.
French as it has
greater integration of
technology in their
daily lives. This
requires the
organisation to bring
technological
innovation for
competing in the
target market.
PEST
It is essential for the company to identify the current market situation for identifying the
potential problems that the company might face in the process of expansion and their future
development in the market. PEST analytical tool can provide significant insight over the target
market.
Pest Analysis France Brazil Korea
Political France is a developed
country where the political
scenario is quite stable. The
business marketers can
develop the effective
marketing strategy in order
Brazil is currently
enjoying stable political
condition. However, the
modern political history
of the country reflects a
struggle with instable
Korea has the
tremendous instability
in the political
environment due to
the frequent changes
in the government.

9INTERNATIONAL EXPANSION
to generate revenues. The
stability in the political
scenario in France has been
attracting the foreign market
entrants and many business
investors. France
Government has fixed the
limit of £1,500,000 for the
foreign enterprises (Naidoo
and Wu 2014). The taxation
process in France is also
quite beneficial for the
foreign business marketers.
The French government has
no control over the cultures
or religions due to which the
business marketers are not
restricted for developing the
business entity.
political scenario. High
level of corruption of in
the country makes the
situation unpredictable
as overnight change in
the political scenario is
evidenced in the
history. These changes
often occurred during
the elections due to the
increased heat. Country
holds 72nd position in
the international
transparency ranking.
However, the
centralized of power
distribution in Korea
is quite favorable for
establishing foreign
business entity. The
economic reformation
is possible if the
political stability can
be developed
(Export.gov 2017).
The strong foreign
relationships are also
much opportune for
the greater
profitability in the
retail banking
industry. However the
continuous influence
from the military is
quite challenging for
the business. on the
other hand, the

10INTERNATIONAL EXPANSION
political violence is
much risky for the
foreign business
marketers like ANZ
bank.
Economical The economic position of
the country is one of the
most important aspects for
the foreign marketers. The
economic situation of a
country depends on several
factors, such as inflation
rate, interest rate, GDP rate,
and per capita income. It has
been observed that in the
year of 2008, the total GDP
rate of France was 0.3% that
increased up to 8% in the
year of 2009 (Piekkari,
Welch and Welch 2014). On
the other hand, per capital
GDP shifted from $33,800,
$33,700 to $32800
The present economic
scenario of the country
is stabilised with
controlled inflation.
Threat of currency
devaluation is reduced
with considerable effort
by the Central bank.
The country is further
reflecting steady
economic growth due to
the large population and
FDI inflow. This further
facilitates in the growth
of the middle-class
population that
ultimately reducing the
gap between the rich
The government
policies in Korea are
quite supportive for
the economic
development of
Korea. The
strengthened
economic reformation
is much beneficial in
earning more profits
in Korea. The county
has been experiencing
the considerable
growth in the
economic field (Ang,
Benischke, and Doh
2015). The good
investment climate in

11INTERNATIONAL EXPANSION
respectively in the years of
2007, 2008, and 2009.
Therefore, it can be
interpreted that the
remarkable GDP growth is
quite favorable for the
foreign business (Ulhøi
2012). However, on the
other hand, the increasing
unemployment rate is also
one of the considerable
factors. Considering these
factors, it can be stated that
the growing economic
conditions in France is quite
helpful for the foreign
business marketers of ANZ
bank to earn more
profitability.
and the poor of the
country. The country
further has low labour
cost and the equal
policy for foreign and
domestic organisation
attracts greater number
of foreign investors.
Moreover, the corporate
rate is fixed at 15%
without incentives (Pao
and Fu 2013).
Korea is much
profitable for the
banking retail
company like ANZ
Bank. The powerful
export sector and the
successful economic
reforms are quite
feasible for the
business
establishment. On the
contrary, the low level
of imports and decline
level of the FDIs are
much challenging for
the foreign business.
Social and
Cultural
The huge population growth
in France is quite opportune
for the foreign business
marketers to establish the
One-fifth of the
country’s population is
under the poverty line
whereas; significantly
The higher wages in
the other neighboring
countries are quite
challenging for

12INTERNATIONAL EXPANSION
greater customer base.
France is the highly
developing country where
people are mostly staying in
the urban areas (Voegtlin,
Patzer and Scherer 2012).
French and Catalan are the
major two languages spoken
in France. The different
religions are also visible in
France. Hence, ANZ bank
has the opportunity to
develop the business
markets among the diverse
cultural people.
small portion of the
population holds the
larger portion for the
wealth of the country.
Larger section of the
population falls under
the middle class that is
steadily growing over
time and slowly
reducing the gap
between the rich and
poor (Caetano, Silva
and Vettore 2013). The
population is however,
up-to-date in fashion
and hold a modern
perspective in the field.
They are keen in
purchasing expensive
and luxurious products.
foreign investors. The
high educated
workforce is
necessary to deal with
the retail banking
process. The rapid
urbanization is also
quite helpful for ANZ
bank to develop the
educated customer
base. On the other
hand, the ageing
society and low social
welfare spending are
much challenging for
the business (Lee et
al. 2015). In addition
to this, the cultural
differences and
language barriers are
quite problematic for
the business
development of ANZ

13INTERNATIONAL EXPANSION
Bank.
Technologica
l
The scientific and
technological environment is
really commendable. The
country as captured the
leading position in
developing the space
technology. The highly
advanced technologies are
adopted to develop different
industrial business including
retail banking sectors (Wang
and Lestari 2013). The
advanced method used for
the retail banking process is
quite favorable for the
existing and entering
business marketers. The
country spends almost 2.2%
of the entire GDP for
developing the technological
tools for the industrial
growth. The remarkable
The country suffers
from poor technological
infrastructure and lag in
technological
advancement
(Shabanova et al 2015).
However, constant
effort is being made to
push technological
development in the
country.
The technological
innovation in South
Korea is much
commendable (Li, Cui
and Lu 2017). The
highly advanced
technological
equipments,
infrastructure
facilities and highly
educated workforce
are supportive enough
for the business
expansion of ANZ
bank. The presence of
the large global and
domestic players is
helpful for the
business whereas the
rising costs of R&D
department are quite
challenging for the

14INTERNATIONAL EXPANSION
R&D market is also much
opportune for the foreign
bank retailers.
foreign marketers.
Foreign Exchange and Trade Implication in France, Brazil and Korea
The development of the trades and business in France is essential for ANZ Bank in order
to expand the business entity. It has been observed that the European Union has established the
TARIC (Community Integrated Tariff) system in which the major duties are applied to imports
from non-EU countries (Export.gov. 2017). The regional and bilateral trade agreement of EU
member states including France is quite beneficial in creating the networking for the foreign
businesses. The establishment of the appropriate networking and selection of the suitable
distributors are needed to be taken into account for developing trade business in France (Kolk
2016). The favorable commercial environment of France is quite supportive for establishing the
retail banking. ANZ Bank needs to recognize the suitable trade policies that can ensure
profitability for the longer period. However, the concerns related to the regulations imposed by
European Union would be much necessary to extract the profitable amount.
The foreign exchange of the country expresses a greater export value compared to the
import according to the 2016 data. The top five countries Brazil exported its products in 2016 are
China, U.S., Argentina, Netherlands and Germany (Wits.worldbank.org. 2018). The top
countries on the other hand they imported goods are U.S., China, Germany, Argentina and
Korea.

15INTERNATIONAL EXPANSION
The Trade Policy review on the other hand communicates that the country was enabled to
resume its positive economic growth in the first quarter of 2017 after the fall in 2013 (Wto.org.
2018). Despite of the negative GDP, the country attracted increasing foreign investments
throughout the period. The country further holds multicultural trading system that facilitates
them in keeping the attraction alive.
The strengthened networking system in Korea among the distributors is much opportune
for the establishment of the retail banking business. The appropriate negotiation is necessary to
start the trade business in Korea since the country does not have any structured or systematic
contract (Duval et al. 2014). The maintenance of the flexibility and adjustment is quite necessary
for business expansion in this country. The development of the Free Trade Agreement is quite
suitable for the profitable market place that can generate more revenues for ANZ Bank. ANZ
Bank can easily opt for the personalized advisory services from Korea International Trade
Association (Kohl, Brakman and Garretsen 2016). However, it is essential for the bank to
develop the consistency in maintaining the rules and regulations while expanding the business
entity in the Korean market. This method would help the company to create the sustainable
market place for the longer period.
Potential Risk in France, Brazil and Korea
The continuous inferences and frequently changing EU policies are quite risky for the
business development of ANZ Bank. It creates the inefficiency in the multilateral processes that
lead to the affected economic structure. The deficit in trade can also turn out to be unprofitable
for the business expansion of a retail banking sector (Vegh and Vuletin 2015). On the other hand,
the foreign and security policies developed by EU are quite in support of business expansion.
The development of the fundamental human rights is increasing the scope of retail banking,

16INTERNATIONAL EXPANSION
which can turn out to be the best source of generating revenues for long run. The joint policies
imposed by EU can resolve the issues emerge among the foreign countries. The increasing the
mobility is quite helpful for sustaining the competitive position.
Though the rapid growth of Brazilian economy and politically stable situation proves to
be beneficial for the foreign investors like ANZ in entering the market, there lies a number of
threats from the competitors and the current economic scenario of the country. The greater
section of the country’s population falls under low income group that minimizes the growth of
ANZ in the market. Moreover, the existing competition and threat of substitute makes it
challenging for ANZ to enter and increase market share in the country.
According to Betts, Giriand Verma (2017), the current and short term policies developed
for attracting the foreign marketers can create both the risks and opportunities. However, it is
notable that the rapidly growing economy of Korea is quite beneficial for the foreign retail bank,
ANZ. However, the sudden fluctuation in the inflation and interest rate can become dangerous
and riskier as well. The capital flow in Asia is still developing due to which it is quite difficult to
plan for the long term period. Moreover, the instability and political violence bring changes in
the trade policies, which can be much challenging for the business to operate in a competitive
retail banking market. However, the implementation of the financial fiscal policies can amend
the loss and structure the new opportunities to extract more benefits.
Recommendation and Conclusion
The business market in France is developing by keeping pace with the economic
environment. Moreover, following the rules and regulations imposed by EU would also be
profitable for ANZ bank to develop the business entity in French market. However, it has been

17INTERNATIONAL EXPANSION
observed that the consumer market in France is quite extensive and demands are prioritized in a
significant way. The existing business marketers in France are quite knowledgeable in terms of
dealing with the various customer needs as well as the trade business needs. In such cases, it can
be recommended that ANZ bank should adopt the partnering market entry strategy to establish
the business partnerships with the local retail banks. It would be more feasible in identifying the
basic consumer needs and the regulatory norms of the country. Accordingly, it would be
preferable to develop the strengthened business entity in a competitive scenario.
ANZ in case of Brazil can utilize the joint venture for gaining competitive advantage in
the market. This will help them to increase their market share using collaboration with one of the
top players in Brazilian banking industry. Considering the challenges ANZ might face in
expanding into Brazilian market proposes the joint venture that will reduce the damage taken
from the market on the arrival of such situation.
The identified political instability in Korea is the major obstacle for the foreign business
marketers. On the contrary, the frequent growth in the economic market is quite beneficial for
earning the profitable returns of the business. Observing the insecure political scenario, it can be
recommended that ANZ bank can secure the foreign business position by adopting the licensing
market entry strategy. In such cases, the company would be secured by the government itself in
time of political crisis.

18INTERNATIONAL EXPANSION
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