Commonwealth Bank: International Business Market Analysis Report

This report provides an analysis of the Commonwealth Bank of Australia's international and global business operations. It examines the structural differences in various markets, including those in Asia, South America, and Europe, with a focus on France, Brazil, and South Korea. The report estimates market sizes and profitability, discusses potential problems, and explores future developments, considering factors such as foreign exchange and trade implications, as well as cultural aspects. The analysis covers the bank's expansion strategies, challenges in international markets, and the importance of adapting to local market conditions. The report also highlights the need for digital solutions and long-term customer relationships. It concludes with an overview of the bank's approach to navigating the complexities of international business and its strategies for sustainable growth in diverse global markets.

Running head: INTERNATIONAL AND GLOBAL BUSINESS
International and Global Business
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction......................................................................................................................................3
Overview..........................................................................................................................................3
Structural differences of the different markets............................................................................3
Estimation of the size and profitability of markets..........................................................................6
Potential problems...........................................................................................................................7
Future developments........................................................................................................................7
Consideration of Foreign Exchange and Trade Implication............................................................9
Cultural aspects..............................................................................................................................10
Conclusion.....................................................................................................................................11
Reference List................................................................................................................................12

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Introduction
The Commonwealth Bank of Australia is a financial system that is based in Australia and
has its main office in Sydney. The business of the company is spread in a variety of markets
across the world, which is inclusive of places like the United States, some Asian markets, Fiji,
United Kingdom and New Zealand (Commbank.com.au 2018). The year of establishment for the
bank was 1911 and it became a public company in the year 1991. The company provides various
services, which includes financial, management of funds, retail businesses, insurance services
and others. It is listed as the biggest company in the Australian Stock Exchange and includes
various products and services under them. The company has made its presence felt outside
Australia as well and is looking for better opportunities in the distant lands. With the expansion
in an international manner, the company will be able to increase its margin of profit as well
(Commbank.com.au 2018).
The analysis of the theories have helped in identifying the changes that are present in the
global markets, which shows that there are little development with respect to the segmentation of
market and using the proper methods of pricing (Ferreira et al. 2014). The current market has to
be assessed accordingly so that the firm can start its operations without facing any difficulty after
they have entered the market.
Overview
Structural differences of the different markets
The primary objective of the company is to use the various strategies in an influential
manner so that they can set up their company in part of the globe. it is inclusive of the markets

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that are present in Asia, South America and some of the markets in Europe. Apart from the
markets that are developed in a proper manner in countries like South Korea and France, the
company has also considered to start its operations in the Brazilian market as well, as it is a
developing economy. The primary plan of the company is the development of financial plans
that are well developed and specific so that the demand of the market can be met efficiently
(Geringer et al. 2016). The company should use the proper strategies in the selected markets such
as South Korea in the Asian market, Brazil in South America and France in Europe.
France being the cultural capital of Europe is one of the most powerful economies in the
current world scenario. The country is in this limelight position due to the strong economy in the
European Union zone. The country has a favorable environment with respect to its commercial
activities, which will help the company in operating in a better manner. The country also has
some differences with respect to society and culture; it will create some problems for the
organization but will not be a threat for the organizational development within the market
(Papadopoulos and Heslop 2014). The French people take interest in trying out the innovative
products so that it can help them in exploring the opportunities that they may get. Geringer et al.
(2016) identified that the banking sector faces competition due to the development of better
banks in the market. In most of the European countries, the channels of distribution that are
traditional in nature mostly dominate the digital economy. This results in making the competition
intense for the new organization. The upper management of the organization needs to ensure that
they enter the market with all the digital solutions that the customers may be looking for in the
market. Due to the increased process of digitization, the banking system that is present in France
is offering more incentives to the non-financial agents so that it can help them increase the level
of transparency and efficiency to serve the customers.

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The market that is present in Brazil is yet to be developed, which shows that it can have a
better future due to the recent increase in the number of industries and the establishment of the
financial companies in the country. The country has hosted some of the biggest sports events
namely Fifa World Cup in 2014 and the Summer Olympics of 2016, which has helped in
boosting the economy in the countries that are present in South America. The country is expected
to increase its economy by $24.5 million by the year 2025. The management of the organization
has made a decision that the market present in Brazil has a major number of tourists who visits
the country on an annual basis. The structure of the South American market is more of a free
economy, which helps the operations of the business to be conducted in a better manner
(Gonzalez, Dabic and Kiessling 2015). The organization has to apply the same strategies so that
it can help them in capturing the market in an easy manner.
The Gross Domestic Product in the South Korean market is $1.8 trillion, which makes the
country eleventh largest economy of the world. The main strength of the country is with respect
to the expertise that they have in the area of engineering and technology and in the industries like
electronics, steel, petrochemical and shipbuilding along with other industries as well. The
standard of the industries is that they maintain a set of transparent guidelines, which gives rise to
a competitive business environment. The country also uses the latest technological innovations
so that it can help them in getting better returns with respect to the financial investments
(Gonzalez, Dabic and Kiessling 2015). The large scale industries that are present in the market is
one of the major reasons for the Commonwealth Bank to get established in the Korean market.
Nevertheless, in the modern times, the market is facing a landslide in the financial market, which
has posed as a serious problem in the Asian market. Moreover, the organization can take help of
the suitable strategies so that they can succeed in the market (Piekkari, Welch and Welch 2014).

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The expansion of the banks in an international manner depends on various activities and
the modes of entry. This may lead to trade agreements, start-ups, joint ventures, acquisitions and
may other procedures. The research that will be conducted by the organization regarding the
various markets will help them in finding the suitable markets.
Estimation of the size and profitability of markets
The Commonwealth Bank has planned to expand its market in the new economies that
are present, which includes the market of Brazil, South Korea and France (Xie, Batra and Peng
2015). The major products of the bank will include savings account, transactions in the share
market, mobile banking services, loans, and other activities as well.
France
The major factors that will help in the estimation of the size and profitability are:
 The country has one of the strongest economy in European Union
 Eighth largest in the world and third largest in the European economy
 Market will grow due to the factor of BREXIT
 Effective and moderate rate of GDP growth
South Korea
The major factors that will result in estimation of the profitability and size are:
 Liberal market
 To become the potential super power in the future
 Mixed economy that is a huge advantage

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Brazil
The major factors that will result in determining the size and factor of profitability are:
 The large scale industries that are present will help in reforming the financial system of
the country
 New policies has helped in reforming the financial system
Potential problems
The organization functions in a similar manner as the other banks who are also facing
problematic situations in establishing their operations in the new countries across the globe.
Some of the problems are:
1. The success strategy that the bank uses in the domestic markets will not help them in
being successful in the international markets, which will result in the formulation of new
strategies for the growth
2. Issues regarding regulations and legal can disrupt the chances of the banks to earn better
returns on the investment
3. The bank may not be able to meet the demands of the customers every time
Future developments
Brazil
The Brazilian financial market is developed and provides scope of future development of
the market as well. The country in the South American market is still facing the recession effects,
which has led them in meeting the demands of the markets in a struggling manner. The

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International Monetary Fund (IMF) estimated that the country may be at the bottom of the
developing countries that are developing at a slower rate in the upcoming years. The rate of
inflation in the country has been stagnant for a while and the Reserve Bank along with the
government of the country is unable to provide better solutions so that the mess can be removed
(Xie, Batra and Peng 2015). The Commonwealth Bank has to start its journey within the country
by implementing some of the useful practices that are available in the bank. These are:
1. Introducing internet and mobile facilities within the bank
2. Customizing the currency
3. Entering agreements so that it can take over small business ventures
4. Use of the social media within the country so that the new generation can be connected
France
The growth of the economy in this country would be 1 percent in the year of 2018-19.
This is due to the fact that the external demand is strong, which has resulted in the rise of tourism
activities and creation of better jobs for the citizens. In spite of the decrease in the taxes of
capital income and business, there has been a strong deficit growth, which will result in
decreasing the budget at 3 percent. The country has the strongest economic zone in the world,
which attracts the companies for foreign investment (Zheng 2017). The market is competitive,
which has been a positive factor for the country in attracting financial industries in the market as
well. The country already has a large number of financial sectors, startup initiatives and
development and research centres, which makes it more feasible in attracting the foreign
investment.

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The company has a marketing team, which will help them in analyzing the potential
advantages that are present in the country, which will help them in carrying out their operations
in a better way. The management has to keep them updated with the latest technologies that will
help them in operating in the market. The organization needs to establish long-term
understanding with the customers so that they can remain sustainable in the market.
South Korea
The introduction of new policies in finances by the government of the country in 2005
has helped in grabbing the attention of the local markets that are present in the country (Zheng
2017). Firstly, the promotional plan for overseas investment and secondly the imposition of
clauses that will limit the transactions of financial accountancy. The government of the country
implemented these policies, which has helped in the overall success. With respect to banking in
the country, the companies are converting their policies so that it can help them to be sustainable
in the market. The research team of the company has used the concept of branches of the bank,
which needs to be replaced with the new services such as mobile banking, banking based on
applications, e-statements, internet banking and other digital technologies (Winata, Mia and
Langmann 2016).
Consideration of Foreign Exchange and Trade Implication
The consideration of foreign exchange is one of the major factors that will help the bank
to succeed in the internal markets. This process includes the conversion of the pounds and dollars
in the form of local currency at the exact value. This results in implication of the trade policies,
cash flows, political issues along with the profits that the banks can make in the international

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markets (Suzuki and Okamuro 2016). In the case of the Commonwealth Bank, they have to
convert the currencies in to the international rates so that they can enter the market.
Cultural aspects
The business that is entering in to a new market has to understand the different barriers
that are present so that the operations within the country do not face any challenge. The increase
in the level of globalization has opened the chances for the foreign businesses to enter new
markets and expand their businesses as well. The increase in the level of competition will make
it difficult for the organization to earn profits and sustain in the present market at the same time.
The management of Commonwealth Bank has to overcome the challenges such as legal, cultural
and environmental factors so that they can succeed in the market (Strizhakova and Coulter
2015).
Most of the countries have their definite set of cultural identities, which has to be taken in
to consideration by the bank (Stahl and Tung 2015). The citizens need to provide ample time to
the customers so that they can get accustomed with the various cultures with respect to the
services that are being provided by them
The major cultural aspects that need to be considered by the organization is as follows:
 Language- It is one of the major cultural barriers for the smooth operations of the
business. The customers are more comfortable with the interaction of the bank employees
in the native language. This will help the company in associating themselves with the
customers in an easy manner and understand the services and products that are being
offered by the organization. The management of the organization needs to hire the local
people so that the language barrier can be solved.

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 Surnames- The surnames of the people play an important role in some of the countries,
which helps them in understanding the local citizens. The management of the
organization needs to make a note of this so that the operation of the business can be
done in an efficient manner.
 Techniques of greeting- It is an important concept that helps in determining the concept
of culture in the countries. The organization has to ensure that the consumers can be
satisfied by employing the local staffs so that the greetings can be exchanged in a better
way.
Conclusion
Therefore it can be stated that the various aspects have to be considered by the
organization before entering in to the international market. The research by the organization has
to be carried out in a proper manner so that it can help in identifying the problems, which can
pose a problem for the company to continue its operation in the international market. The
analysis has helped the organization in understanding the best mode of entry along with the
products and services that can be used in the new market. The organization also had a better
understanding of the competitors that are present in the market as well.

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Reference List
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Gonzalez-Loureiro, M., Dabic, M. and Kiessling, T., 2015. Supply chain management as the key
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Lawrence, A.T. and Weber, J., 2014. Business and society: Stakeholders, ethics, public policy.
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Papadopoulos, N. and Heslop, L.A., 2014. Product-country images: Impact and role in
international marketing. Routledge.
Peteraf, M., Gamble, J. and Thompson Jr, A., 2014. Essentials of strategic management: The
quest for competitive advantage. McGraw-Hill Education.
Piekkari, R., Welch, D. and Welch, L.S., 2014. Language in international business: The
multilingual reality of global business expansion. Edward Elgar Publishing.
Stahl, G.K. and Tung, R.L., 2015. Towards a more balanced treatment of culture in international
business studies: The need for positive cross-cultural scholarship. Journal of International
Business Studies, 46(4), pp.391-414.
Strizhakova, Y. and Coulter, R.A., 2015. Drivers of local relative to global brand purchases: A
contingency approach. Journal of International Marketing, 23(1), pp.1-22.
Suzuki, S. and Okamuro, H., 2016. Determinants of Academic Startups’ Orientation toward
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Winata, L., Mia, L. and Langmann, C., 2016. Strategic Alliance, Information and
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Xie, Y., Batra, R. and Peng, S., 2015. An extended model of preference formation between
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Zheng, C., 2017. Globalization and international human resource management.

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