International Expansion Strategy for Commonwealth Bank of Australia

This report analyzes the international expansion plans of the Commonwealth Bank of Australia (CBA), focusing on the attractiveness of France, Brazil, and Korea as potential markets. The analysis considers various external factors, including market structure, size, profitability, potential issues, future developments, trade implications, foreign exchange, and cultural aspects of each country. The report estimates market sizes, identifies potential challenges like Brexit's impact on France and corruption in Brazil, and examines cultural nuances impacting business entry. The study concludes with recommendations for CBA's expansion strategy, suggesting France and Korea as more suitable options than Brazil, based on the comprehensive evaluation of each market's environment and potential for the bank's success. The report uses academic references to support its findings.

Running head: INTERNATIONAL AND GLOBAL BUSINESS
INTERNATIONAL AND GLOBAL BUSINESS
Name of the Student
Name of the University
Author Note

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Executive Summary
The report is based on the analysis is related to the expansion based plans that have
been made by a global or multinational bank. The bank which has been considered
for the analysis is the Commonwealth Bank of Australia. The countries which have
been considered by the bank for expansion are France, Korea and Brazil. The
different external aspects that are related to the country have been analysed in the
report in order to determine the suitability of the country. The analysis has been
concluded by stating that the Commonwealth Bank of Australia can consider the two
countries, namely, France and Korea for the expansion related plans. The suitability
of Brazil is considered to be quite low in the analysis.

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Table of Contents
Introduction........................................................................................................3
About the company............................................................................................3
Choice of the three countries.............................................................................3
Understanding differences between the structure of the market in three
countries.......................................................................................................................4
Estimating the size and the profitability of France.............................................4
Analysing the potential issues which can be faced by the company in France 5
Analysing the future developments in France...................................................5
Considering the trade implications and foreign exchange in France................6
Considering of the cultural aspects impacts the entry in France.......................6
Estimating the size and the profitability in Brazil...............................................6
Analysing the potential issues which can be faced by the company in Brazil. .7
Analysing the future developments in Brazil.....................................................7
Considering the trade implications and foreign exchange in Brazil..................7
Considering of the cultural aspects impacts the entry in Brazil.........................8
Estimating the size and the profitability of Korea..............................................8
Analysing the potential issues which can be faced by the company in Korea..9
Analysing the future developments in Korea.....................................................9
Considering the trade implications and foreign exchange in Korea..................9
Considering of the cultural aspects impacts the entry in Korea......................10
Conclusion and recommendations..................................................................10
References.......................................................................................................11

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Introduction
The expansion of business based activities of the organizations in different
countries are mainly related to the effective increase in revenues and profitability.
The companies further aim at increasing the levels of awareness in different parts of
the world. The expansion is not only based on the investments that are made by the
organizations in different countries. This is mainly based on proper development of
the presence of global organizations in different areas of the world (Alden & Aran,
2016). The global expansion is thereby based on the ways by which the
organizations are thereby able to attract different customers towards different
products and services that are offered by the company.
The analysis that will be made in the report is related to the expansion based
plans that have been made by a bank of Australia named Commonwealth Bank of
Australia. The expansion related plans are thereby based on three different countries
which include, France, Brazil and Korea.
About the company
The Commonwealth Bank of Australia is a multinational bank of the Australian
origin. The organization has its effective operations in many different areas of the
world which mainly include, Asia, New Zealand, the United Kingdom and the United
States. The different services which are thereby provided by the organization
include, financial services like, institutional, business and retail banking,
superannuation, broking and investment services (Commbank.com.au., 2018).
The Commonwealth Bank is thereby considered to be the biggest listed
organization in Australia. The different brands which are an important part of the
operations of Commonwealth Bank include, Colonial First State Investments,
Commonwealth Securities, Commonwealth Insurance. The organization was
established in the year 1911 under the Australian government and further privatised
in the year 1996. The headquarter of the organization is mainly located at the corner
of Pitt Street, Sydney (Commbank.com.au., 2018).
Choice of the three countries
The three countries that are being considered for the expansion based
operations of the organization in the international area are France, Brazil and Korea.

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These countries and their environment can be analysed in an effective manner in
order to decide the best area for the expansion of the company in the financial
industry.
Understanding differences between the structure of the market in three countries
France - The open financial market is an important advantage for the
expansion of the Commonwealth Bank of Australia. The lack of administrative
restrictions based on the portfolio investments have been able to attract effective
investments. The foreign based organizations are thereby able to enter the French
market in an easier manner. The marketplace of France has thereby been
modernized and the expansion of markets have provided advantages to the
organizations (Boasson & Wettestad, 2016). The international accounting based
standards thereby need to be maintained in the country by the organizations in
France.
Brazil – The financial market of Brazil is considered to be highly promising in
nature. The scenarios in the financial industries of Brazil have gone through many
effective changes in the past few years. This has further been able to stimulate
growth of the company in the financial industry. The economy and financial markets
of the country have been able to provide effective opportunities based on growth to
the different organizations. The investment based sector of the country has also
been affected in a huge manner by the changes in the financial market.
Korea – The financial markets that have been developed in Korea are highly
organized in nature. The markets are thereby divided into indirect and direct markets
in the country. The organized money markets have been able to attract many
investments from all over the world. The direct markets are thereby known play a
major role in the ways by which the companies can operate in the country. The direct
financial markets are more active as compared to the indirect markets as they do not
depend on the financial intermediaries.
Estimating the size and the profitability of France
The market of France has been modernized in an effective manner and the
size of the market has also increased in the past few years. The banking based
system of the country had started developing in a huge manner from the years 2008

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and 2009. The French banks have also started becoming healthier the total assets
had amounted to 6.3 million Euros in the year 2015. The foreign investors are able to
access different financial instruments in the country which include, the short term
facilities, the medium term facilities and the long term based facilities as well
(Bortoluzzi et al., 2018). The investment based policies which have been
implemented in the country are quite transparent in nature. The lack of effective
restrictions has also been able to provide effective facilities to organizations in
France. The free and effective environment in France is able to provide facilities to
the organizations (Cuervo-Cazurra, 2016).
Analysing the potential issues which can be faced by the company in France
The organization can face some major challenges while entering the financial
market in France in an effective way. The most important challenge which will be
faced by the company is based on the implementation of Brexit in the European
Union. The changes that have taken place in the European Union have been able to
affect the ways by which trade activities are conducted in the country (Denicolai et
al., 2016).
This is able to cause major issues for the effective operations of the
companies that plan to enter France. France was provided with the 25th position in
the entire world based on the establishment of new business. The labour based laws
in the country are also able to affect the ways by which new organizations are able to
operate in France. The changes in laws due to Brexit have proved to be a major
issue for organizations in France (Durand, Grant & Madsen, 2017).
Analysing the future developments in France
The strong investment and trade based relationships with the United States
have been a major strength of the country and its business environment. The future
development of the business based environment of the country is able to play a
major role in the expansion based activities of the companies. The improvement
which has been shown by France in the financial activities is considered to be an
opportunity for the effective operations of Commonwealth Bank in the country
(Export.gov., 2018).

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The financial sector of the country is expected to show more growth in the
future and attract more foreign based organizations as well. The different sectors
which operate in the country are thereby able to affect the growth of France in the
future. The open market of the country is however considered to be an effective
opportunity for the operations of global organizations (Gulanowski, Papadopoulos &
Plante, 2018).
Considering the trade implications and foreign exchange in France
The government of France has not played any strict restrictions on the foreign
investors in the process of converting their money in an effective manner. The funds
that are related to any types of investments are thereby converted easily from any
specific currency. The currency which is used in France is known as Euro (Hamilton
& Webster, 2015).
The organizations which start their operations in the country are thereby able
to exchange the currency in France without any hassles at all. The trade based
policies that are followed in France are mainly based on those which are developed
by the European Union. These policies are able to affect the ways by which different
organizations are able to operate in the country in a profitable way. The trade based
policies have been able to play a major role in the effective operations of the global
organizations (Hawke, 2018).
Considering of the cultural aspects impacts the entry in France
The business based culture which has been developed in France is quite
unique in nature. The development process of the European Union has been able to
affect the ways by which France has developed its business culture. The
neighbouring countries of France are also highly developed in nature. The business
organizations who wish to enter the country can face huge cultural challenges
(Jenkins & Williamson, 2015). The cultural challenges thereby need to be considered
by the organizations in order to set up effective business based operations in the
country.
Estimating the size and the profitability in Brazil
The financial markets of Brazil have started growing in a huge manner in the
past few years. The growth has further been able to attract different types of global

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organizations from all over the world. The huge levels of surplus have played a major
role in replacing the trade based shortages in the country. The stock market of the
country has also performed in an efficient manner (Eiiff.com, 2018).
The value of the currency of Brazil is half of that of the US dollars. The
economic condition and financial market of a country are related to each other in a
huge manner. The economy of Brazil has thereby started showing growth in the
recent years based on effective output of the organizational processes. The country
has also started many investments from foreign organizations in an effective manner
(Iyer et al., 2015).
Analysing the potential issues which can be faced by the company in Brazil
Brazil has been able to develop a lot after the country was made an important
part of BRIC. The country has become an emerging economy with huge amounts of
growth. The support which has been provided by the government is considered to be
an important part of the ways by which Brazil has been able to develop its position
as an emerging economy. The major issues which have thereby been faced by the
organizations in Brazil are the high levels of corruption in the country (Jin,
Ramkumar & Chou, 2018).
The credit based risks in the country have started growing in the recent times
which can affect the operations of Commonwealth Bank in the country. The tax
based systems of the country have also provided huge amounts of risk in the
effective operations of the companies. The country is also not able to provide an
effective infrastructure for the organizations which operate in different industries in
an effective manner (Jiang & Holburn, 2018).
Analysing the future developments in Brazil
The complex business based environment of the country has been able to
affect the different organizations which operate in Brazil. However, the environment
in the country is expected to improve in the future and thereby attract the foreign
investments. The different laws which have been formed in the country can be
improved in an effective manner in order to create a profitable business environment
(Sahoo, Sahoo & Sahu, 2014).

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The outsourcing based laws and labour laws have been modified in order to
affect the operations of the global organizations. The improvement of employment
based laws is also under process in order to the create an environment which is able
to support the organizations (Saxena & Shanker, 2018).
Considering the trade implications and foreign exchange in Brazil
The trade regulations and the foreign exchange based policies in Brazil are
considered to be highly complex in nature. The tax based laws in the country have
been made quite complicated in order to control the rates of tax evasion. The laws
which have been developed in the country need to be developed in an effective
manner in order to improve the business based environment (Schaltegger, Lüdeke-
Freund & Hansen, 2016).
The unique Brazilian laws are thereby able to affect the revenues and
profitability of the organizations which plan to enter the country. The trade
environment in the country is affected the organizations are able to affect the
profitability based levels of the Commonwealth Bank (Wheelen et al., 2017).
Considering of the cultural aspects impacts the entry in Brazil
The culture which is followed by the organizations in Brazil are able to affect
different parts and operations of the global companies. The organizations thereby
need to aim at developing friendly relationships with the employees who are a part of
the business operations in Brazil. The people of Brazil are able to negotiate with the
people or the employees. They do not interact with the organizations as a whole.
The hierarchical business culture that is followed in Brazil is quite different from the
structure that is followed in Australia and New Zealand (Hill, Jones & Schilling,
2014). The operating style of the bank in Brazil will thereby be quite different from
that which is followed in its home country.
Estimating the size and the profitability of Korea
The implementation of huge numbers of financial policies have been able to
affect the financial market of Korea and its operations. The size of the Korean market
has also increased in an effective manner due to developments which have been
seen in the economy. The major liberalization based steps that have been taken by

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the government has been able to affect the ways by which Korea attracts foreign
investments from all over the world (Export.gov., 2018).
The stabilization of the real estate based market was also an important
agenda of the Korean government with the help of effective policies. The new
policies and regulations have thereby been able to attract the global organizations.
This can also act as an important factor in attracting the Commonwealth Bank so
that it is able to start its operations in the industry (Fernández-Méndez, García-Canal
& Guillén, 2018).
Analysing the potential issues which can be faced by the company in Korea
The major issues which are being faced by Korea is based on the ways by
which the growth of the country has been a sandwich between the emerging
countries and the developed countries of the world. The country is hugely dependent
on USA and China for the majority of its trade based activities. The Free Trade
Agreement that has been made by the country with the US has thereby proved to be
an important factor which has been able to affect the country and the organizations
that operate in the country as well (Worldbusinessculture.com, 2018). The entry of
new organizations in the environment is thereby based on the economic stability
which can be developed by Korea in an effective manner. The Commonwealth Bank
thereby needs to keep these factors in mind before it plans to enter the country.
Analysing the future developments in Korea
Korea has been able to show huge levels development in the past few years
in spite of various issues that are faced by the country. The future development of
the country is based on the issues which are being faced in the environment. The
challenges are mainly faced by over dependence of Korea on China and the United
States. The innovation based activities which are developed in the country are able
to affect the improvement of the country and the ways by which the organizations are
affected (Worldbusinessculture.com, 2018). The culture of start-up which has been
developed in the country is also able to facilitate the different organizations in an
effective manner.

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Considering the trade implications and foreign exchange in Korea
Korea has been able to liberalize the investment based activities with the help
of foreign exchange based controls. The global organizations are able to invest
under different terms that are Foreign Capital Promotion Act. The organizations
which are not able to operate under the cannot repatriate the funds in an effective
manner. The exchange based rates of the trade activities in Korea have also started
improving in the last few years (Keia.org, 2018).
The country is also a part of the Free Trade Agreement which has been
developed with the United States. The major trade partner of the country is China.
Korea is hugely dependent on Chins for different trade based activities. The
Commonwealth can take advantage of the growing financial sector of the country
and increase its revenues as well (Keia.org, 2018).
Considering of the cultural aspects impacts the entry in Korea
The development if South Korea from an impoverished country to a large
economy has been able to increase the attractiveness of the market. The culture of
the country has been able to play a major role in the ways by which the foreign
organizations are able to operate in the country. The increase in FDI is thereby ab
important part of the development which has been shown by the company
(Worldbusinessculture.com, 2018).
The culture and attitude which has been depicted by the country and the
people is able to affect the operations of the organizations in Korea. The approach
which is thereby shown by the country towards education is an important factor
which can affect the different organizations and their levels of profitability as well
(Keia.org, 2018).
Conclusion and recommendations
The report can be concluded by stating that the external environment based
factors of different countries need to be considered by the organizations in order to
set up their operations in an effective manner. The three different countries that have
been analysed in the report can affect the organization in various ways. The culture
and the policies of the organizations are thereby able to play the most important role
in the ways by which a financial organization like Commonwealth Bank can operate

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in the country in a profitable manner. The analysis has further depicted that the
organization can operate in the industry in a profitable manner with the help of
proper support provided by the country.
Recommendations – The major recommendations which can be provided to
the company is that France and Korea will be the most effective areas for the
expansion related plans that have been made by the bank. The economic condition
of Brazil is also developing. However, the country may not be suitable for the
operations of the Commonwealth Bank of Australia currently. The bank thereby
needs to consider the two countries namely, France and Korea in order to expand its
operations in a profitable manner.