International Business Report: Westpac Bank's Market Entry Strategy

This report assesses the international market potential for Westpac Bank in France, South Korea, and Brazil. It examines business, economic, and social environments, including corruption levels, institutional frameworks, market sizes, macroeconomic factors, and cultural dimensions using various global indexes. The analysis identifies challenges such as government regulations, cultural differences, and market penetration. The report recommends strategic partnerships and concludes that France is the most suitable market. It provides insights into market entry strategies, government regulations, cultural aspects, and foreign exchange rates, along with recommendations for Westpac's global expansion.

Running head: INTERNATIONAL BUSINESS
International business
Name of the business
Name of the university
Author note

1INTERNATIONAL BUSINESS
Executive summary
The aim of this report is to discuss about the business, economic and social
environments of Brazil, France and South Korea in order to determine their market
potentiality for the Westpac bank of Australia. Various dimensions are being used in this
report in order to identify the issues to be faced by Westpac in entering in these
countries. Information regarding these three countries is being gathered from various
global indexes. This report concludes that, France will be the ideal foreign country to
enter for Westpac. In addition, this report also recommends that, Westpac should
initiate strategic partnership in order enter in the foreign countries.

2INTERNATIONAL BUSINESS
Table of Contents
Introduction...................................................................................................................... 3
Country overview of France.............................................................................................3
Business environment.................................................................................................. 4
Market scenario............................................................................................................6
Macroeconomic environment....................................................................................... 7
Socio-cultural environment...........................................................................................8
Identification of the issues in operating in France.........................................................9
Country overview of South Korea.................................................................................... 9
Business environment.................................................................................................. 9
Market scenario..........................................................................................................11
Macroeconomic environment..................................................................................... 13
Socio-cultural environment.........................................................................................13
Identification of the issues in operating in South Korea.................................................14
Country overview of Brazil............................................................................................. 14
Business environment................................................................................................ 15
Market scenario..........................................................................................................17
Macroeconomic environment..................................................................................... 19
Socio-cultural environment.........................................................................................20
Identification of the issues in operating in Brazil............................................................20
Recommendations......................................................................................................... 21
Conclusion..................................................................................................................... 22
Reference.......................................................................................................................23

3INTERNATIONAL BUSINESS

4INTERNATIONAL BUSINESS
Introduction
Globalization is the latest trend in the current business scenario being practiced
by the contemporary business organizations. This is due to the reason that, in the
current business scenario, competition is higher in the market and thus it is important for
the contemporary business organizations to increase the market presence beyond their
home country (Lane 2013). However, there are various modes being involved by the
contemporary business organizations in entering in the foreign markets. Few of the
suitable entering modes for the business organizations are the strategic relationship,
merger and acquisitions and import and export (Brondoni 2014). Effectiveness of the
modes is being determined by the business and social environment of the host
countries.
Westpac is the first and oldest bank of Australia. Currently, they are being
considered as one of the top four banking institutions of Australia (Westpac.com.au
2018). They are having their global presence in different countries in Asian region along
with having their presence in New Zealand, Fiji and United Kingdom. However, due to
the increase in the competition in the market, they are facing the issue with their
profitability. Thus, they are looking for entering in new markets in France, South Korea
and Brazil. This will help them to enhance their global presence along with increasing
the market share. However, it is also important for them to determine various factors in
relation to the business and social environment of these countries.
This report will discuss about the market opportunity, government regulations in
relation to the investment of these countries. Moreover, the cultural aspects, foreign
exchange rates along with other issues to be faced in entering in these countries will
also be discussed in their report. In accordance to the identified issues, various
recommendations will be discussed in this report along with discussing the effective
market entry strategies.
Country overview of France
France is one of the leading economies in the European regions with having
favorable market and business opportunities. They are also having favorable

5INTERNATIONAL BUSINESS
infrastructure for the business operation (Singh and Bourgouin 2013). The following
sections will discuss about the different elements of business environment of France.
Business environment
Figure: 1 Corruption index
Source: (e.V. 2018)
As per the corruption index, 2016 of Transparency international, France is having
the score of 69, which portrays less impact of the corruption in the country. Thus, it will
be favorable factor for Westpac to have their operation in France due to the reason that,
they will face less charge of corruption in the country.

6INTERNATIONAL BUSINESS
Figure: 2 Institutional environment of France
Source: (weforum.org 2018)
According to the global competitive index, France is having the ranking of 13 in
terms of the protection of the intellectual property. Thus, it is also another favorable
factor being faced by Westpac in investing in France. It shows that, Westpac will have
fewer risk of maintaining their intellectual and other property. However, one of the
negative factors being identified is the burden of government regulations (Bharosa et al.
2013). In this element, France is having the ranking of 121. Thus, they are having much
lower ranking in this. This will have negative impact on the business operation of
Westpac due to the reason that, Westpac will have to face more barriers in terms of the
government regulations, which will reduce the effectiveness of their business (Dreher
and Gassebner 2013). There are various other elements being identified in the above
figure which will have both positive and negative impact on the business operation of
Westpac.

7INTERNATIONAL BUSINESS
Market scenario
Figure: 3 Market size of France
Source: (weforum.org 2018)
Figure: 4 financial market of France
Source: (weforum.org 2018)
According to the report of global competitiveness index, France is having the
ranking of 9, which is quite good. Thus, Westpac will have huge market size to cater
along with having more customers. GDP of France is also on the upper side with the
ranking of 9. Thus, with having favorable GDP, the economy of the country will be high
along with having higher per capita income (Schneider 2013). Thus, Westpac will have
more market opportunity in France. According to the global competitiveness report,
France is having the ranking of 30 in terms of availability of the financial services. Thus,

8INTERNATIONAL BUSINESS
it will be an opportunity for Westpac to offer more financial services in enhancing the
ranking. France is having the ranking of 28 in terms of the affordability of the financial
services. Thus, it will be beneficial for the Westpac to offer their services in more
affordable cost. It will help them to target more customers.
Macroeconomic environment
Figure: 5 Macroeconomic environment of France
Source: (weforum.org 2018)
France is having the ranking of 15 in terms of country credit rating. Thus, they
are having favorable ranking and it portrays that, investment in France will face less risk
of defaulting. This will ensure the investment to be made by Westpac (Jafarnejad et al.
2013). Currently, France is having the exchange rate of 0.65 Euro to AUD 1. Thus, the
difference is less, which will cause less negative impact on the business operation of
Westpac.

9INTERNATIONAL BUSINESS
Socio-cultural environment
Figure: 6 Cultural dimensions of France and Australia
Source: (Hofstede Insights 2018)
According to the above figure, France is having higher ranking compared to the
home country of Westpac, Australia in terms of power distance. Thus, it portrays that,
French companies maintain more hierarchical levels compared to their Australian
counterparts (Freitag and Bauer 2013). Thus, Westpac may face issues in maintaining
their existing organizational structure in France. In terms of the masculinity, ranking of
France is lower than that of Australia. According to the reports, France is having more
feminine social culture compared to the masculine culture of Australia. Thus, Westpac
will face the issue of managing the human resources in France with their existing
human resource management policies.

10INTERNATIONAL BUSINESS
Identification of the issues in operating in France
 One of the key issues being identified is the favorable market penetration of the
financial services in France. This will create barriers for Westpac by lowering the
market opportunities for the new entrants.
 Another issue identified is the difference in the cultural aspects between Australia
and France. This will create rift between the home and host country operation of
Westpac.
 Westpac will have to face more stringent government regulations in their
business operation in France. Thus, it will create barrier in effectively catering to
the local customers with their existing service portfolio (Vandemoortele and
Deconinck 2013).
Country overview of South Korea
Among the Asian countries, South Korea is one of the leading economies with
having favorable financial and other infrastructure (Bruno and Shin 2014). They are also
one of the leading hubs of electronics and technologies in the world. The following
sections will discuss about the various environmental elements of South Korea.

11INTERNATIONAL BUSINESS
Business environment
Figure: 7 Corruption index
Source: (e.V. 2018)
According to the corruption index, 2016, South Korea is having the ranking of 53
in the world. Thus, it portrays that, they are no major impact of corruption on the
business However, their ranking is stands in the middle positions and thus,
organizations may have to face negative impact of the corruption in their business
operation.