Analysis of International Business Operations: VTB Bank Report

This report provides a comprehensive analysis of VTB Bank's international business operations. It begins with an overview of the bank, its current operating position, and an executive summary. The report then delves into VTB Bank's international competitive strategy, including a SWOT analysis, and examines its organizational structure and control issues. It explores various entry strategies, supply chain management, and operational controls. Furthermore, the report addresses human resource management practices, identifies key issues and opportunities faced by VTB Bank, and concludes with recommendations for enhancing its international business growth and globalization. The analysis covers financial and accounting control issues, market fluctuations, and regulatory pressures. Strategies like multinational corporation and international firm models are also discussed.

Running head: INTERNATIONAL BUSINESS ACROSS BORDERS
International Business across Borders
Name of the student
Name of the University
Author note

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Executive Summary
The report is about understanding the international business across the borders by
various multinational companies. The respective company that has been taken in the report is
VTB Bank, Russia wherein the current operating position that helps in understanding the
SWOT analysis along with the issues that are faced by the VTB Bank.
The main aim and purpose of the report is to analyze issues along with the
opportunities that are faced by VTB Bank in Russia and in other operating countries as well.
The purpose of the report is to identify the control issues such as financial and accounting
issues that can have great influence on the organization.
The conclusion is based on analyzing the key issues faced by the respective bank and
implementing strategies relating to licensing and franchising that will help in resolving such
issues faced by the bank. The recommendation would be proper implementation of strategies
to increase the growth of the international business and increase globalization as well.

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Table of Contents
Introduction....................................................................................................................3
1. Overview and operating position...............................................................................3
1.1 Overview of VTB Group.....................................................................................3
1.2 Current operating position....................................................................................4
2. International Competitive strategy.............................................................................4
2.1 Review of the competitive strategy......................................................................4
3. Current organizational structure and control issues...................................................6
3.1 Organizational structure.......................................................................................6
3.2 Control Issues.......................................................................................................7
4. Entry strategies...........................................................................................................7
5. Operation control and supply chain management......................................................8
5.1 Supply chain management...................................................................................8
5.2 Control of operations............................................................................................9
6. Human resource management....................................................................................9
7. Key Issues and opportunities of VTB Bank.............................................................10
7.1 Issues..................................................................................................................10
7.2 Opportunities......................................................................................................11
8. Conclusion and Recommendation............................................................................12
8.1 Conclusion..........................................................................................................12

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8.2 Recommendation................................................................................................12
9. References................................................................................................................14

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Introduction
The report is based on analyzing the business of VTB Group Company in Russia and
the effect of the international business across borders as well. It is essential to understand the
nature of the business and the operation of such business in other parts of the world as well.
The main aim of the business is to analyze and review the international competitive
strategy of the company along with issues related to the control of the respective company in
Russia. Proper analysis has to be done as to understand the competitive strategies that can
help the respective company to enter the other countries or regions. The main purpose of the
report is to management of different human resources across borders as well as identifying
the key issues that are threats for the respective company. The opportunities has to be
ascertained as well as this will help in identifying the future opportunities of the respective
company across the border.
The structure of the report includes the overview of the respective company along
with design of the present organizational structure of the company as well. It will include the
strategies that are essential for them to enter the other regions or countries as well.
1. Overview and operating position
1.1 Overview of VTB Group
VTB Group is global provider for different kinds of financial services that generally
comprises of more than 20 financial constitutions and credit institutions that are operating in
all the required areas of financial markets ("VTB – World without barriers", 2017). The
respective company’s network that is global in nature is unique in the entire financial market
of Russia. It helps in facilitating the promotion of other Russian organizations to engage into

5INTERNATIONAL BUSINESS ACROSS BORDERS
the financial markets. The majority of the shareholders of VTB Bank are Russian government
and it has more than 60% voting rights as well.
1.2 Current operating position
The current operating position of VTB Bank is in Russia presently and they are
operating in other countries as well that includes Armenia, United Kingdom. VTB Bank is
operating as the parent company in other countries such as Germany as well as France. VTB
is having subsidiaries along with affiliated banks in the other part of the countries that
includes Angola as well as Georgia. VTB Capital has its branches in Dubai as well as
Singapore that is making them work more effectively and planning to start their operations in
other countries as well. According to the reports of 2015, VTB Bank is 14 million individuals
along with corporate clients are using the banking services of VTB and it is increasing
effectively as well (Cavusgil et al., 2014).
2. International Competitive strategy
2.1 Review of the competitive strategy
VTB Bank deals with the investment, retail banking along with corporate sectors in
the competitive market.VTB deals with different kinds of threats along with opportunities
from their competitor in the entire industry. The main competitor of VTB Bank is Morgan
Stanley along with Renaissance Capital (Sakas, Vlachos & Nasiopoulos, 2014). There are
different kind of threats available to VTB Bank that has to be analyzed by them in order to
understand the weaknesses and strengths of the company as well.
Strengths
 Leading banks in Russia
 More than 40,000 employees in the labor force (Nyberg et al., 2014)

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 Operates in more than 20 countries across the world
 Comprises of retail, corporate and investment businesses
Weaknesses
 Domestic capital marketplace is shallow in nature
 Global presence is limited in nature
 Market growth is limited of VTB Bank
Opportunities
 Converting the positioning of the market that is strategic in nature into return of
capital that is consistent in nature
 Serves the different clients globally
 Diversifying the business and focusing on the segments that are strategic in nature
Threats
 Market is fluctuating in nature
 Increase in the administrative costs
 Threat from other global markets that are increasing
 Increasing staff costs
OpportunitiesServesclientsgloabllyDiversificSWOT

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Figure 1: SWOT Analysis
(Source: Brewster et al., 2016)
3. Current organizational structure and control issues
3.1 Organizational structure
Figure 2: Organizational structure
(Source: Created by author)
From the diagram, it can be analyzed that the present structure of the organization
helps in understanding that hierarchical structure is followed in VTB Bank. Under the Board
of Management, there are sub departments such as administrative, risk management along
with strategy making committee. Similarly, under supervisory department there is internal
audit, card centre as well as F & A department wherein all the functions of the management
are taken care by them. The executive department takes care of the responsibilities that help
in understanding the issues that needs to properly taken care by VTB bank officials.

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3.2 Control Issues
There are different kinds of control issues faced by VTB Bank that are listed as follows:
 Firstly, accounting issues that includes accounting on inflation as and other
problems related to indirect taxes such as VAT (Value Added Tax) and
miscellaneous taxes as well on the transactions done in the business by them (Poulis,
Poulis & Plakoyiannaki, 2013).
 Secondly, the financial issues that focus on the risk related to foreign exchange
rate, as it is not under control of the VTB Bank and it can be control issues for the
company that has to be settled properly.
 Thirdly, transaction exposure is the risk that includes impact of the exchange rates on
the financial statements of the company and it is affecting the consolidated balance
sheet and financial position of the company as well (Brannen, Piekkari & Tietze,
2014).
 Lastly, the fluctuations in the exchange values can affect the business of banks, as
it is unavoidable kind of risk faced by the companies.
These are the different kinds of business control issues that are faced by VTB
Bank that are unavoidable in nature and it can be reduced with proper implementation of
strategies that can make reduce the risk in the future. Proper precautions have to be taken
by the officials as to avoid such risks in the near future (Armstrong & Taylor, 2014).
4. Entry strategies
Appropriate and proper strategy will be a source for competitive advantage of
VTB Bank that includes different approaches and moves to enter into the different
markets successfully. VTB Bank has adopted multinational corporation strategy, as it is

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a successful business model that has separate laws followed by them as well (Sparrow,
Brewster & Chung, 2016).
Multinational Corporation helps VTB Bank in analyzing the risk of failure involved in
the business and solving as well as reducing it with proper application of strategies both in
parent and host country. International firm is another entry strategy used by VTB Bank as
this helps them in starting their operations in other foreign countries as well easily without
investing much capital and it will provide marketing effort as well (Storey, 2014).
5. Operation control and supply chain management
5.1 Supply chain management
The main approach of VTB Bank helps in creating impact on the production,
suppliers and customers of the bank (Gamble & Thompson, 2014). Effective and proper
supply chain management is essential for VTB Bank that can support the strategy objectives
such as growth and globalization along with turnaround in the financial situations of the
company.
 VTB Bank uses functional expertise in order to analyze the proper way to cope with
various unavoidable situations. It is essential to understand the proper way to optimize
the supply chain management of the company with proper planning and controlling of
the strategies by them (Beamish & Lupton, 2016).
 Integrated solutions understand the constraints regarding the various operations and
disciplines regarding the planning of supply chain management of VTB Bank. VTB
Bank helps in optimizing the approaches of planning in the organization as to analyze
the requirements and design of supply chain management (Fainshmidt, White &
Cangioni, 2014).

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 Principles of supply chain management are essential in nature as to understand the
specific characteristics of the supply chain management of the entire sector. It helps in
lifting the performance of the clients and maintaining proper balance in the
organization as well.
5.2 Control of operations
Proper operational control is essential to be done by the companies as to understand
the procedures of the organization are in proper place in the organization or some changes are
required in order to analyze such changes (Knowles, Holton III & Swanson, 2014).
VTB Bank has to adopt some operational control operations, as this will help in
analyzing the strategies that needs to be adopted by them as to control such issues in the
bank. Operational control is required in VTB banks to understand the sound and safe
operating system (Bondarenko, 2014).
 It will help in providing acknowledgement of the growth that can help in
analyzing the managerial risk involved in the company.
 It helps in analyzing the information that is generated from the
transformation process in the bank to get the estimates of costs that are
required in the business.
 It helps in streamlining to minimize the costs as well as the work that will
help in finishing the tasks efficiently and quickly as well.
6. Human resource management
Management of human resources is essential to be done by the organization, as this
will help them in maintaining two key components namely managing risks and people in
banks. VTB Bank has implemented human resource management process in such a way that

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it helps in implementing planning as well as analyzing the performance of the organization as
well (Wagner III & Hollenbeck, 2014).
 Planning is required to be done by VTB Bank, as this will help them in acquiring the
right individuals and retaining the people in the organization as well. It will help VTB
Bank in rapid technological advancement and skill up gradation as well.
 Acquiring the right individuals is essential, as this will help VTB Bank in order to
gain competitive advantage in the competitive market. The company will acquire
proper growth as well in the future with proper development of strategies.
 Re-skilling and training is essential, as this helps in continuous growth in the
progress of the individuals. It will help in managing the performance of the
organization as well.
7. Key Issues and opportunities of VTB Bank
7.1 Issues
 Regulatory pressure is present in VTB Bank, it is increasing presently, and VTB
Bank needs to spend discretionary budget to meet up with the requirements of
escalation (Cavusgil et al., 2014).
 VTB Bank does not meet expectations of consumers and they are not able to
deliver the level of service to the customers that is desired and demanded by the
customers as well.
 Increasing competition is creating a huge challenge for VTB Bank as they are still
using outdated technologies and they are not able to cope up with the present changes
that are met by the other organizations (Snell, Morris & Bohlander, 2015).