ANZ Bank's Strategy for International Expansion: A Market Analysis

This report analyzes ANZ Bank's strategy for international expansion, focusing on the banking scenarios in Brazil, France, and Korea. It begins with an executive summary and an overview of ANZ Bank, discussing its history, services, and organizational structure. The report then delves into market analyses of Brazil, France, and Korea, examining their economic statuses, banking regulations, and potential opportunities for ANZ. It considers the implications of Brexit for ANZ's expansion into France and the easing of regulations in South Korea. The report also explores ANZ's past expansion strategies and controversies. Finally, the report offers recommendations for international expansion, concluding with a summary of the key points discussed. The report utilizes various credible sources and reports to support its findings, providing a comprehensive overview of ANZ Bank's international expansion strategy.

Running head: ANZ BANK’S STRATEGY FOR INTERNATIONAL EXPANSION
ANZ Bank’s Strategy for International Expansion
Name of the University
Name of the Student
Author note

ANZ BANK’S STRATEGY FOR INTERNATIONAL EXPANSION
Executive Summary
The chief purpose of the report is to present an analysis of the banking scenario in
Brazil, France and Korea and provide recommendations for ANZ Bank for international
expansion. The report further gives a brief overview of the bank and its current market
situation. In addition, the report tries to analyze separately, the economic status of the
countries mentioned. In doing so, credible sources and reports have been used. In the
report, ANZ’s past expansion strategies and future planning have been clearly
mentioned. The controversies that marred the company’s profile have been stated as
well. The report concludes with some recommendations for international expansion and
a brief summary of the points discussed in the main body.

ANZ BANK’S STRATEGY FOR INTERNATIONAL EXPANSION
Table of Contents
Introduction...................................................................................................................... 3
Overview of ANZ Bank.....................................................................................................4
Market analysis of Brazil..................................................................................................5
Market analysis of France................................................................................................6
Market analysis of Korea..................................................................................................7
Strategy formulation for ANZ............................................................................................9
Recommendations......................................................................................................... 10
Conclusion..................................................................................................................... 11
References:....................................................................................................................12

ANZ BANK’S STRATEGY FOR INTERNATIONAL EXPANSION
Introduction
International expansion involves strategy for market entry that includes vital
choices such as market focus, determining the target customers, allocation of
resources, services and product offering and so on (Chen et al., 2015).
When it comes to banks, expanding to foreign lands require knowledge about
that country’s government as well as banking regulations (Considine et al., 2016). In
addition to that, banks have to analyze the banking culture followed in the target nation.
Amungo and Buck (2017), in a study concerning the expansion of Nigerian banks
revealed the relevance of various theories relating to internationalization of
organizations. The authors mentioned three specific theories that are the resource
based view (RBV) theory, the eclectic theory and the transaction cost analysis (TCA)
theory. According to the eclectic theory, banks have to explore the Ownership
advantages that include managerial skills, specialized banking services, reputation and
so on. Then, the banks have to focus on the Location advantages that are posed by the
target nation including easy regulations, market size, and government interference and
profit opportunities. Lastly, the theory mentions the Internalization advantage that
concerns internalization of operations of the bank in foreign market. The RBV approach
supports the view that banks have the advantage of managerial abilities, the brand’s
reputation and organizational culture amongst others that help them expand in other
countries. As per the TCA theory however, focuses more on factors like the entry and
transact cost of the bank. The cultural proximity between two countries, property rights,
legal concerns are included in the TCA factors (Cho, Lee & Lee, 2015).
The given report focuses on the Australian and New Zealand Banking Group
Limited (ANZ) and its strategy to expand in Brazil, France and Korea. The report
provides an overview of the bank and then proceeds to the market analysis that would
help it formulate the required strategy for expansion. ANZ Bank currently has
headquarters in Melbourne, Australia and after its Asian expansion strategy; it aims to
penetrate into the European and South American market.

ANZ BANK’S STRATEGY FOR INTERNATIONAL EXPANSION
Overview of ANZ Bank
Established in October 1951, ANZ operates in more than thirty countries
providing services like retail, corporate and commercial banking, insurance, transaction
banking and many more (Anz.com, 2018). It is the largest bank in New Zealand and
fourth largest in Australia. The bank is also amongst the top fifty banks in the world.
Involved in many award-winning initiatives, ANZ believes in adapting to changing
environment in order to meet customer demands. The bank also drafts policies that are
aligned with the Sustainable Development Goals (SDGs) of the United Nations.
With Shayne Elliott as the CEO, ANZ has an organizational structure that
deviates from the hierarchical structure. The bank’s culture allows every employee to
have a say in matters regarding any operation or decision. In a recent announcement,
the bank decided to overhaul its structure and adopt an approach that distinguishes
itself from others. According to the CEO, the bank aims to follow a term-based approach
that would enable it to do things in a more agile way.
In matters concerning ethical code of conducts, ANZ has developed two separate
guidelines for directors and employees to be followed. In addition, it has prepared a
Conduct and Ethics Policy Framework that comprises the ethical standards that need to
be maintained in the company. These ethical policies and codes of conducts are
maintained strictly in the bank that has helped it maintain a reputable and respectable
position in the market.
With a view to expand its operations in countries beyond the Asia-Pacific region,
the bank has initiated a strategy to bring further amendments in its organizational policy.
One of its policies is to acquire foreign banks and merge those with its own. However,
the process would not be easy as the countries chosen for expansion have very strict
rules and regulations regarding banking (Pradhan et al., 2014). It is but also true, that
ANZ has an advantage of strong base in Australia, which it can utilize to establish
foreign branches.

ANZ BANK’S STRATEGY FOR INTERNATIONAL EXPANSION
The ANZ Bank holds a very good reputation within Australia and New Zealand
despite being stained with controversies in the past. As already mentioned ANZ holds
the top rank in New Zealand and is fourth biggest in Australia. It is thus evident that the
bank does have a stronghold in its native place. However, in order to acquire
businesses in Brazil, France and Korea, the bank has to clear off its name from the
controversies and look ahead. The CEO mentioned this need in a recent statement
made in the parliamentary committee of Australia where he stated that the bank is
committed to rectify previous mistakes. He further added that steps have already been
taken in this regard, those involved in forgery, and scandals have been removed.
Market analysis of Brazil
Banking system is Brazil has become quite efficient in recent times after years of
economic sloth that slowed the country’s development pace. Many banks have installed
sophisticated banking sites that not only offer banking services at a faster rate but also
provide non-stop assistance to the customers. Numerous banks operate in the country
with each city having at least one branch. Brazil’s five largest banks have around 10 to
15 thousand branches spread across the country and all international operations are
centralized at the headquarters located majorly in Sao Paulo and Rio de Janeiro
(Syriopoulos, Makram & Boubaker, 2015). In addition, all the banks have corresponding
branches in other nations.
Brazil’s efforts to stabilize the financial condition during the late 20th century were
commended by the global economic leaders and experts. This showed that the country
had mechanisms that can cope with any situation leading to financial distress.
Moreover, the flexible rules and regulations of the banking sector make it luring enough
for international firms to eye it. ANZ, being in a phase of image rebuilding and progress,
would have great scope in Brazil. The country has a lot to offer when it comes to
strategic alliances and partnerships.
In a study by Coleman and Feler (2015), it has been revealed that post the global
crisis of 2011-2012, Brazil has emerged as a strong economic market. The government
has also shown agility in allowing international firms establish business without

ANZ BANK’S STRATEGY FOR INTERNATIONAL EXPANSION
burdening them with unnecessary rules and regulations. However, many obstructions
have been laid by the government for international firms that have compelled many
experts to believe that these regulations are too complex. Apart from the government,
the Central Bank of Brazil too has a major role in drafting regulations. These regulations
were imposed by the government in order to check tax evasion but these have
consequently resulted in rigid regulatory policies. It is but also true that despite all these
factors, many foreign banks have struck partnership deals with the local Brazilian banks
and achieved success.
Looking at ANZ’s future policy for expansion, it is evident that the bank is
attempting to raise its technological base in order to make services smoother and
friendly for customers. Chuang and Hu (2015) have found that the bank’s Super
Regional Strategy aims towards forming positive affiliations beyond the boundaries of
Australia and New Zealand. The bank is primarily targeting markets based in America,
Europe and Asia, Brazil being one amongst these. Currently Brazil is going through the
phase of economic renovation whereas ANZ aims to rebuild its image as a fair bank.
Therefore, these two factors present a perfect scenario for the bank to open its
branches there and become operational.
Market analysis of France
Although ANZ has an existing branch at Paris, it aims to achieve maximum
benefits by expanding its operations there. France is one of the most dynamic countries
in Europe with endless possibilities for business expansion. The country has a banking
system that is characterized by increased regulations deriving mainly from the
European scheme for encouraging a safe banking system (Alter & Beyer, 2014). After
Brexit, the French government has pepped up its efforts to lure more and more banks
by easing regulations and cutting high rates of interest. Owing to this, other nations also
found an opportunity to expand their business in France. Brexit has also provided an
opportunity for ANZ to attract customers in not only France but also those leaving
Britain to have access to better opportunities with the bank.

ANZ BANK’S STRATEGY FOR INTERNATIONAL EXPANSION
Prior to Brexit, the banking and government regulations that existed in France
were quite rigid and complex. The phase after the 2007 financial crisis especially saw
many departments were formed that looked after the financial security of the country.
These departments proved to be a hurdle for international firms who looked to expand
their businesses. Nonetheless, ANZ managed to expand its operations in France when
it opened its first branch in the country that served customers mostly belonging to the
Asia-Pacific region (Lodhia, 2015). The branch provided wholesale retail services to the
customers. Apart from that sole branch, ANZ has no other branches in the whole of
France and that is the reason why it has aimed to expand its operations here.
ANZ provides financial services as well other than providing banking services
across the thirty-four nations. France being at the center now after Brexit, presents a
golden opportunity for ANZ to target the market (Schoenmaker & Peek, 2014).
However, certain things have to be kept in mind while planning to approach the French
market, one of which is the presence of the European Union. The regulations that
govern banking operations in France have a major control of the laws drafted by the EU.
Therefore, ANZ must understand this aspect and then take subsequent steps.
Another obstacle that ANZ might face while expanding to France is the language
barrier. Although employees are trained to work in any country with varying linguistic
backgrounds, it is not easy to get along from the beginning (De Jonghe & Öztekin,
2015). Although the French government has announced establishment of institutions to
provide language training, it remains to be seen how long it would take the country to
adapt as per international demand. Nonetheless, with technology as the leading
objective, ANZ has the opportunity and the prospect to prosper in its international
expansion aimed at France (Theguardian.com, 2018).
Market analysis of Korea
South Korea’s banking sector has been an area of concern for the past few
decades despite the fact that the country’s financial standard has shown improvement
(Bruno & Shin, 2014). Both the government and the investors have are facing problems
regarding the sector’s stability. However, the good news for ANZ is that the regulations

ANZ BANK’S STRATEGY FOR INTERNATIONAL EXPANSION
imposed by the Financial Services Commission (FSC) have been eased. Owing to the
improvement in the standard of regulation quality, customers and clients have been
endowed with opportunities to find a prospect in the country.
In a report by the Scotia Bank on South Korea’s economy, the efforts put by the
South Korean government to stabilize the country’s banking sector have been found
(Gbm.scotiabank.com, 2018). Among its peers, South Korea is probably the most stable
and open economy amidst all the geopolitical and political turmoil. It has also been
found that the government is putting in increased efforts to make the banking sector
more flexible and welcoming towards international firms. In an attempt to attract
investors, the government is providing monetary support to policy banks that are
negatively affected by the issues facing the shipbuilding and shipping industries. Apart
from that, South Korea’s credit ratings and sovereign debts have also shown resilience.
According to Standard & Poor’s (S&P), the strong public finances and encouraging
policy environment have resulted in the country’s economic stability and rating
(Xinhuanet.com, 2018).
In spite of that, expanding to South Korea must have to be strategized sensibly
looking at the situation faced by the existing foreign banks in the country. In a report
published in the Financial Times, the HSBC Banking group aired its concern regarding
banking in the Asian country (Ft.com, 2018). The disappointment has been expressed
majorly in the retail banking area where foreign banks have performed the lowest. The
cause for this poor performance has been attributed to the excessive government
interference. A look at the country’s economic performance in the last financial year of
2017, signs of improvement are there but the banking environment is still displaying
signs of instability (Eiu.com, 2018). However, with the increasing influence of the global
economy and technology and South Korea’s attitude towards it, global banks do have a
strong chance to prosper in their endeavor in the country. ANZ group with its mission to
provide unconditional services to customers irrespective of country, cast or community
has strong chances of doing well in Korea (Yoo, Kang & Kim, 2015).

ANZ BANK’S STRATEGY FOR INTERNATIONAL EXPANSION
Strategy formulation for ANZ
ANZ provides numerous services to its customers both within and beyond
Australia and New Zealand. Apart from the retail, corporate and commercial banking
services, the ANZ group also provides financial services like investment,
superannuation, providing financial solutions and insurance to millions of customers.
Another feature of ANZ is that it provides state-of-the-art technology solutions to its
customers. The firm believes in complete utilization of technology and thus it has laid
stress on technology.
After evaluating the markets of Brazil, France and Korea, it is evident that ANZ
has great scope in expanding its business in these countries. In order to formulate
strategy for the expansion, ANZ has to decide as to which area of business it wants to
focus on while expanding. A look at ANZ’s purpose and strategy for its existing
businesses, presents great opportunities for growing further. One of its business
purposes is to internationalize its domestic services by reaching out to customers in
different countries. Therefore, certain strategies have to be articulated to ensure error
free and concrete plan for international expansion.
First, ANZ has to analyze if its business is flourishing in its native region and if
not, it has to make sure that the existing market is bringing in profit. This strategy
involves minimum risk and maximum results, as the company would target its existing
customers with new pricing, products and services. The existing customers would make
it known to the company if the strategy has worked or not. This is one advantage of
applying this strategy. Second, the company can look to develop fresh market
segmentation. This strategy would require thorough market research to determine the
new target group. Third and the most important are the merger and acquisition of
existing companies or groups. ANZ is planning to enter into strategic partnerships and
acquisitions in the said countries to grow its business (Ferreira et al., 2014). Hence,
applying this strategy in the domestic market as an initial step would greatly help ANZ
prepare for the international expansion. One aspect that often eludes the strategic
planning is the understanding of cultural differences while establishing business in other

ANZ BANK’S STRATEGY FOR INTERNATIONAL EXPANSION
countries. ANZ is based in Australia and it plans to expand its business in Brazil, France
and Korea that are culturally distinct from Australia. Hence, training employees to adapt
in those culturally distinct countries must be included in the expansion strategy (Turner
& Nugent, 2015).
Recommendations
Jiang, Holburn and Beamish (2014) suggest a firm that plans to expand to
foreign markets must consider evaluating the performance of other firms in the target
markets. This would help the firms understand the environment of the target markets
and the risks associated as well. ANZ may follow these recommendations while
formulating the plan. These include:
 Proper market segmentation is essential, as it would help ANZ demarcate
its customers according to various businesses
 Market research must be done adequately and with emphasis recent
trends evident in the target countries
 Goals and objectives must be prepared beforehand keeping in mind the
budget and other necessities (Forbes.com 2018).
 A top-down budget should be developed along with a strategic project
plan with consigned dates
 Reviewing regulations imposed by government and industry of the target
country must be done after proper product gap analysis. This would
ensure obtaining of certifications and compliance if needed
 It must also be made sure that the products and services decided to be
marketed has been named and designated as per the said country’s local
language and tradition
 Focus should be more on the company’s strength rather on areas where it
has not delved into yet or areas where it lacks consistency. Further, local
distribution networks and logistics must be developed to sell the product
and services through authentic and credible channels

ANZ BANK’S STRATEGY FOR INTERNATIONAL EXPANSION
 Apart from that, ANZ must be equipped with organizational, legal, finance
and tax strategies that enables it to implement everything with given time
and with perfection
Conclusion
The future success of a firm depends on the present strategies it implements.
When it international expansion for developing the business, strategies become
increasingly important. ANZ is a reputable banking company based in Australia and
New Zealand that plans to expand the Asian, North American and European nations. It
provides financial services to customers in thirty-four countries including Australia and
New Zealand. ANZ has been in the news for several reasons mostly for its scandals
and forgery. Shayne Elliott, the new CEO has pledged to rebuild the company’s image
by removing the stained employees and getting closer to the customers. With its vision
to become a technologically advanced financing group, ANZ has employed many
strategies pertaining to the development of technology. It is thus important for the
company to test its capability whether it is ready to explore international areas of
business. The report presented a systematic analysis of the expansion strategy that
needs to be formulated by the company. In the report, it has also been highlighted that
the bank has to rebuild its image in the public before planning to expand further as its
image had been tarnished by past controversies. In addition, the report has provided a
clear understanding of the current and previous market conditions prevailing in Brazil,
France and Korea. Both the negative and positive aspects of economy in each country
have been elaborated in the report. After analyzing the attractiveness of each market, it
can be stated that ANZ has strong chances of being successful in these countries.
However, certain things have to be kept in mind before taking a step forward. The report
has provided recommendations for ANZ that it should follow to expand and grow its
business.

ANZ BANK’S STRATEGY FOR INTERNATIONAL EXPANSION
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