Allied Irish Bank: Analysis of International Market Expansion Strategy

This report analyzes Allied Irish Bank's (AIB) expansion strategy, focusing on the Maltese market within the European Union. It begins by outlining the global business environment, including political, economic, social, technological, legal, and environmental factors. The report then examines how globalization impacts SME growth, emphasizing enhanced market access and increased competition. It identifies threats and opportunities for AIB, such as competition and technological advancements. The report further explores the advantages of international trading blocks, specifically the Customs Union, for AIB. It also details tariff and non-tariff barriers encountered in international trade. The conclusion summarizes the opportunities and challenges faced by AIB and highlights the importance of understanding global business dynamics for successful international expansion. The report provides a comprehensive overview of the factors influencing AIB's strategic decisions in the context of international market entry and growth.

Tapping into New and International
Markets

 Introduction
 Explanation of Global Business Environment
 Analysis of Global Business Environment
 Threats and opportunities that are faced by SMEs
 Critical analysis of implication of threats and opportunity
Table of content

 Advantages of international trading blocks and agreements
 Evaluation of advantages of international trading blocks and agreements
 Tariff and non tariff barriers
 Conclusion
 References
Table of content

Introduction
The organisation selected for this presentation is Allied Irish Bank which provides banking services. The
Bank offers loans, mortgages, credit cards, current accounts, financial planning, insurance,
investments, pensions, and savings and deposits products, as well as internet and mobile banking
services. Currently Allied Irish Bank is operating in areas of UK and Ireland and also started switching
in many reasons of northern Ireland. In order to expand its business operations and customer base
Allied Irish Bank is now focusing on its expansion in the various reasons of Europe also. Thus, the
target market selected for this presentation is Malta that is a souther European Island country.

It is very important for an organisation to appropriately and effectively be aware of the global business
environment in which it operates, as it represents different facets and aspects of the surroundings of the
firm that could be a major influence on the sustainability and growth of the company.
Explanation of Global Business Environment

Allied Irish Bank is a SME organisations within the United Kingdom, which provides its financial
services to its customers within the nation. Quite recently, the company is expanding itself in the trade
bloc market of Europe, specifically in Malta, which the firm believes could prominently be used for
expanding the business operations effectively.
 Political Factors: For an SME that is planning to expand into a trade bloc market, it is necessary that
the political factors are taken into account. The political factors in Malta are stable and the business
will be supported by peace, security and social progress which will be an opportunity for the business.
 Economical Factors: Malta is expected to achieve highest growth in the European region. This backs
the statement that it is one of the favorable country to expand business operations. The GDP growth in
the country was 5% in 2019.
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 Social Factors: These factors undertake all the trends, customer preferences and social concerns
within a country which has a direct influence on the SME in expanding its market in the region. In
context of Allied Irish Bank, the current trend within the Banking sector has individuals wanting
more technologically advanced and reliable financial services, along with ease in payment options.
 Technological Factors: The adoption of fast digital oriented banking services are one of the latest
trends in Malta. Therefore adoption of the same will be helpful in achieving higher expansion goals
for Allied Irish Bank, which would allow the SME with better opportunities later on.
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Legal Factors: These factors are the ones which cover the legislation's and rules and regulations of a
country. In context of Allied Irish Bank, due to Brexit, there are several drastic changes within the
legislation surrounding the banking sector of the Europe if an organisation belongs to the UK. It is
crucial for an organisation to confirm with the regulation which are established by Malta financial
services authority.
Environmental Factors: For Malta, it is crucial for a business to conform with Environment and
Development planning act 2010. The authority working under this legislation is responsible for
offering licenses and regulating business practices.
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 As per the above explanation, it could be stated that Global Business Environment is very important
for organisations to evaluate and analyse, so that they could determine the positives and negative
aspects associated with this environment. Moreover, the analysis below is covers the key global drivers
which firms like Allied Irish Bank experience in relation to expanding their business to nations, such as
Europe.
Analysis of Global Business Environment

How trends of globalization impacting SME growth
There are several ways through which globalisation is impacting the SME growth within the region.
Some of these ways are explored below:
Enhanced Access: One of the major impacts which SME's are facing by the globalisation is enhanced
access within the global market. With new trends of transportation and travelling, companies could set
up their units in different locations with easy access to their resources, suppliers and other aspects like
technology. This has a positive impact within these organisations as it could help them in enhancing
the scope of their expansion within countries within EU.

How trends of globalization impacting SME growth
There are several ways through which globalisation is impacting the SME growth within the region.
Some of these ways are explored below:
Enhanced Access: One of the major impacts which SME's are facing by the globalisation is enhanced
access within the global market. With new trends of transportation and travelling, companies could set
up their units in different locations with easy access to their resources, suppliers and other aspects like
technology. This has a positive impact within these organisations as it could help them in enhancing
the scope of their expansion within countries within EU.

Continue……
Competition: Another aspect which have an impact on the SME's. With rise in globalisation, there is also
a rise witnessed in trends within the competition. Each organisation has multiple companies as their
competitors who adopt different strategies to sustain a better market position. The impact could be
both positive and negative within the companies and it influences their practices which must be to
ensure high quality products that are promoted and positioned in a better manner than their
competitive firms.

With the integration among nations and global economies the competition level has also increased as the
scope and size of markets has enhanced. This, competitive global environment facilitates both threats and
opportunity for Allied Irish Bank which are explained below with respect to Allied Irish Bank and global
environment of Malta which is an emerging market of Europe.
Threats and opportunities that are faced by Allied Irish Bank

In competitive global environment many threats and opportunity are faced by Allied Irish Bank that
includes stiff competition, mass turnover together with availability of better technology, sources of
finance and expansion opportunity. With the rise in the integration among global economies, the Allied
Irish Bank have to face cut throat competition from other big multinational companies which has lead to
a pressure on it to make improvement in its business operations to face and counter the competition at
global level.
Critical analysis of implication of threats and opportunity

In competitive global environment many threats and opportunity are faced by Allied Irish Bank that
includes stiff competition, mass turnover together with availability of better technology, sources of
finance and expansion opportunity. With the rise in the integration among global economies, the Allied
Irish Bank have to face cut throat competition from other big multinational companies which has lead to
a pressure on it to make improvement in its business operations to face and counter the competition at
global level.
Critical analysis of implication of threats and opportunity

Trading blocks are basically reflects a group of countries who form trade agreements between themselves
to have better trade deals. Basically there are three main types of Trading blocks and agreements which
can be adopted by a nation to have better international trade.
 Free trade area- It is a trade agreement that is free from tariffs between members and no external tariff
is levied on trade. Therefore, the member nation can negotiate their own trade deals.
Advantages of international trading blocks and agreements

Determination of trading block
The various trading blocks are as follows:
 Customs union
 Common/single market
 Free trade area

Trading block entered by Allied Irish Bank
The Allied Irish Bank is entering in the Customs union trading block as it offers better
opportunity and makes it more easier to freely trade with the members and also yield
the advantages of a common and unified external tariff with non members trade block.
The other advantage of entering in a custom union by Allied Irish Bank is that it
facilitates better negotiation power thus, enhance the profitability and also lead to
better expansion opportunity.

The creation and formulation of trade blocks and agreements among various preferable and profitable
nations of world offer many advantages for business organisation and create positive implication Allied
Irish Bank. Trade blocks and agreement create an opportunity for Allied Irish Bank to have assess to
better technology of participating nation which lead to efficiency in operations and production.
Evaluation of advantages of international trading blocks

While operating at the international environment many tariff and non tariff barriers are faced by an
organisation. Some of these tariff and non tariff barriers that exists in international trading environment
are explained below in context of Allied Irish Bank:
 Tariff barriers: Specific tariffs, Ad Valorem Tariffs
 Non Tariff Barriers: Licenses, Import quotas
Tariff and non tariff barriers

Implication of tariff and non tariff barrier on SME

 On the basis of above assignment it can be concluded that a global business environment yield many
opportunity for a SME that includes better technology, more sources of finance and better expansion
possibilities. Beside this, many threats like stiff competition, migration of employees, etc. are also
created by increasing global integration. International trading blocks facilitates easy trade agreements
among the participating nation. Various tariff and non tariff barriers are there like licensing, simple
tariff to have a control and check on international trade.
Conclusion

 Arapova, E., 2017. Southeast Asia as the New Investment Pole. International Trends. 15(3). pp.89-94.
 de Oliveira, R. T. and Rottig, D., 2018. Chinese acquisitions of developed market firms: Home semi-
formal institutions and a supportive partnering approach. Journal of Business Research. 93. pp.230-
241.
 Friedrichs, S., 2017. Tapping nanotechnology’s potential to shape the next production revolution. The
Next Production Revolution, p.157.
References

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