ANZ Bank’s Business Expansion To France, Brazil And Korea: Market Analysis And Entry Strategy

ANZ Bank Overview

The advancement in the business field signifies the innovations and the implementation of the useful strategies. These strategies are directly related to the target market in which the company is operating in. Several characteristics of market plays active role in modifying hte strategies incorporated by the business organisation (Arnold 2013). The study reflects on the business expansion of ANZ bank, which has acquired the commendable position in the financial sector. After developing the successful business practices in Australia and New Zealand, ANZ bank is now focused on expanding the business in France, Brazil and Korea. The study would thus develop adequate knowledge about the business market place and the theoretical background for understanding the business feasibility to expand in mentioned countries. The market analysis will be done using the PEST analysis and Porter’s generic model. The information acquired through the market analysis will then be compared with the market entry strategy to identify the challenges the company is likely to face in the target market.   

ANZ Bank has captured the third position after Commonwealth Bank and Westpac Banking Corporation in terms of market capitalization. The Australian and New Zealand Banking Group Limited or ANZ Bank has the potentiality of deriving largest profits in the commercial and retail banking sector. This banking company has been much committed to develop the corporate social responsibility by taking account of the environmental, social, and economic opportunities and risks. It is the 5^th largest listed companies among the other banking entities in Australia (Anz.com.au 2017). Apart from Australia and New Zealand, the company has been operating in other markets around the globe. Almost 46,000 staffs are associated for providing the retail, institutional, and commercial supports to the potential customers. They even provide the remarkable corporate offerings in the core market, adequate capital flow across the region, and regional trade for the future prospects. The purpose of the company is to shape the world within which the communities thrive. The company now seek to expand their market in France, Brazil and Korea utilising partnership strategy for entering the market.  Therefore, the study would develop the insightful ideas about the environmental influence and the regulatory factors that can help the organization to develop the strengthened entity in outside countries as well.  

The company is looking forward to enter the specific markets with adequate strategies for partnering with the local firms operating in the target markets. Hence, the preferred strategic alliance ANZ can utilise for entering the countries in three different continents is the joint venture where they will be partnering with the local financial organisations. This has the potential to significantly reduce the threat in the new market. This will help the organisation in resolving the social and political issues they might face while operating in the target market. Moreover, this will accelerate the process of gaining the market knowledge. 

Porter’s Five Forces Analysis in Target Markets

The following section will identify the market structure and profitability lies within each of the target markets. The Porter’s Five forces analysis will help in acquiring adequate information on the market structure and profitability by identifying the nature and number of the competitors in each of the target markets.

Porter’s Five Force Analysis Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	France	Brazil	Korea
Buyer Power	The high degree of competition in France enables the customer to choose over organisation for greater profit. Moreover, substitutes in the market also divert the focus of the customer to invest elsewhere that increases the bargaining power of the buyers in the market (E. Dobbs 2014).	Similar to the other two countries, Brazilian buyers holds high level of bargaining power. However, the low income of the greater section of the population supplements in increasing the bargaining power of the buyers.	Bargaining power of the buyers in considered being high in the Korean market due to the greater competition and high threat of substitute. Moreover,
Supplier Power	Entering a foreign market makes the companies purchase their raw materials from number of suppliers. Dominant position of the suppliers will decrease the profitability of ANZ. The company should consider a number of raw materials that will help them in keeping the budget under control. Supplier power in France is considered as low due to the availability of raw materials.	Bargaining power of the suppliers is considerably medium due to the moderate availability of the raw materials available.	Supplier power in case of Korea is considerably low due to the high availability of raw materials required in the banking sectors.
Competitive Rivalry	Leading banks like BNP Paribas, Credit Agricole, BPCE have already captured the market in France and holds the greatest market share. This makes it hard for ANZ to penetrate the market and increase their market share.	There exist a number of world’s leading banks in Brazil that has already established their roots in the country by gaining trust of the customers. Some of the leading organisations in the banking sector of Brazil are HSBC, Banco Bradesco Financiamentos, Banco J Safra S/A and a number of other banks. These will pose significant threat of for ANZ in their expansion in Brazilian market.	Five of the leading banks of Korea namely Kookmin Bank, Woori Financial group, Shinhan Financial Group, National Agricultural Cooperative Federation and Hana Financial group ranks within the top 100 world’s largest bank that has the potential to pose threat to ANZ in their entry in Korea.
Threat of Substitute	Threat of substitute is high due to the existence of the non-financial organisation like insurance companies. People of France tend to invest their money in multiple financial and non-financial agencies that increases the threat.	The threat of substitute is considerable low in case of Brazil compared to the other two countries. This can be attributed to the low income of the population that restrict them to invest in non-financial organisation.	The case of Korea is much similar to the one of France and poses high level of threat of substitute in the market. The French people have a number of opportunities to invest their money that increases the threat of substitute.
Threat of New Entry	The technological innovation in the country is commendable that demands ANZ to bring innovation in their business process by integrating higher level of technological involvement to proved greater satisfaction to the customers.	Lack of technological incorporation in the country reduces the threat of entry. This reduces the requirement of innovation. However, economic and political unrest in the can have adverse effect on the business operation in the country.	The case of Korea is similar to the one of French as it has greater integration of technology in their daily lives. This requires the organisation to bring technological innovation for competing in the target market.

It is essential for the company to identify the current market situation for identifying the potential problems that the company might face in the process of expansion and their future development in the market. PEST analytical tool can provide significant insight over the target market.

Pest Analysis	France	Brazil	Korea
Political	France is a developed country where the political scenario is quite stable. The business marketers can develop the effective marketing strategy in order to generate revenues. The stability in the political scenario in France has been attracting the foreign market entrants and many business investors. France Government has fixed the limit of £1,500,000 for the foreign enterprises (Naidoo and Wu 2014). The taxation process in France is also quite beneficial for the foreign business marketers. The French government has no control over the cultures or religions due to which the business marketers are not restricted for developing the business entity.	Brazil is currently enjoying stable political condition. However, the modern political history of the country reflects a struggle with instable political scenario. High level of corruption of in the country makes the situation unpredictable as overnight change in the political scenario is evidenced in the history. These changes often occurred during the elections due to the increased heat. Country holds 72nd position in the international transparency ranking.	Korea has the tremendous instability in the political environment due to the frequent changes in the government. However, the centralized of power distribution in Korea is quite favorable for establishing foreign business entity. The economic reformation is possible if the political stability can be developed (Export.gov 2017). The strong foreign relationships are also much opportune for the greater profitability in the retail banking industry. However the continuous influence from the military is quite challenging for the business. on the other hand, the political violence is much risky for the foreign business marketers like ANZ bank.
Economical	The economic position of the country is one of the most important aspects for the foreign marketers. The economic situation of a country depends on several factors, such as inflation rate, interest rate, GDP rate, and per capita income. It has been observed that in the year of 2008, the total GDP rate of France was 0.3% that increased up to 8% in the year of 2009 (Piekkari, Welch and Welch 2014). On the other hand, per capital GDP shifted from $33,800, $33,700 to $32800 respectively in the years of 2007, 2008, and 2009. Therefore, it can be interpreted that the remarkable GDP growth is quite favorable for the foreign business (Ulhøi 2012). However, on the other hand, the increasing unemployment rate is also one of the considerable factors. Considering these factors, it can be stated that the growing economic conditions in France is quite helpful for the foreign business marketers of ANZ bank to earn more profitability.	The present economic scenario of the country is stabilised with controlled inflation. Threat of currency devaluation is reduced with considerable effort by the Central bank. The country is further reflecting steady economic growth due to the large population and FDI inflow. This further facilitates in the growth of the middle-class population that ultimately reducing the gap between the rich and the poor of the country. The country further has low labour cost and the equal policy for foreign and domestic organisation attracts greater number of foreign investors. Moreover, the corporate rate is fixed at 15% without incentives (Pao and Fu 2013).	The government policies in Korea are quite supportive for the economic development of Korea. The strengthened economic reformation is much beneficial in earning more profits in Korea. The county has been experiencing the considerable growth in the economic field (Ang, Benischke, and Doh 2015). The good investment climate in Korea is much profitable for the banking retail company like ANZ Bank. The powerful export sector and the successful economic reforms are quite feasible for the business establishment. On the contrary, the low level of imports and decline level of the FDIs are much challenging for the foreign business.
Social and Cultural	The huge population growth in France is quite opportune for the foreign business marketers to establish the greater customer base. France is the highly developing country where people are mostly staying in the urban areas (Voegtlin, Patzer and Scherer 2012). French and Catalan are the major two languages spoken in France. The different religions are also visible in France. Hence, ANZ bank has the opportunity to develop the business markets among the diverse cultural people.	One-fifth of the country’s population is under the poverty line whereas; significantly small portion of the population holds the larger portion for the wealth of the country. Larger section of the population falls under the middle class that is steadily growing over time and slowly reducing the gap between the rich and poor (Caetano, Silva and Vettore 2013). The population is however, up-to-date in fashion and hold a modern perspective in the field. They are keen in purchasing expensive and luxurious products.	The higher wages in the other neighboring countries are quite challenging for foreign investors. The high educated workforce is necessary to deal with the retail banking process. The rapid urbanization is also quite helpful for ANZ bank to develop the educated customer base. On the other hand, the ageing society and low social welfare spending are much challenging for the business (Lee et al. 2015). In addition to this, the cultural differences and language barriers are quite problematic for the business development of ANZ Bank.
Technological	The scientific and technological environment is really commendable. The country as captured the leading position in developing the space technology. The highly advanced technologies are adopted to develop different industrial business including retail banking sectors (Wang and Lestari 2013). The advanced method used for the retail banking process is quite favorable for the existing and entering business marketers. The country spends almost 2.2% of the entire GDP for developing the technological tools for the industrial growth. The remarkable R&D market is also much opportune for the foreign bank retailers.	The country suffers from poor technological infrastructure and lag in technological advancement (Shabanova et al 2015). However, constant effort is being made to push technological development in the country.	The technological innovation in South Korea is much commendable (Li, Cui and Lu 2017). The highly advanced technological equipments, infrastructure facilities and highly educated workforce are supportive enough for the business expansion of ANZ bank. The presence of the large global and domestic players is helpful for the business whereas the rising costs of R&D department are quite challenging for the foreign marketers.

The development of the trades and business in France is essential for ANZ Bank in order to expand the business entity. It has been observed that the European Union has established the TARIC (Community Integrated Tariff) system in which the major duties are applied to imports from non-EU countries (Export.gov. 2017). The regional and bilateral trade agreement of EU member states including France is quite beneficial in creating the networking for the foreign businesses. The establishment of the appropriate networking and selection of the suitable distributors are needed to be taken into account for developing trade business in France (Kolk 2016). The favorable commercial environment of France is quite supportive for establishing the retail banking. ANZ Bank needs to recognize the suitable trade policies that can ensure profitability for the longer period. However, the concerns related to the regulations imposed by European Union would be much necessary to extract the profitable amount.

The foreign exchange of the country expresses a greater export value compared to the import according to the 2016 data. The top five countries Brazil exported its products in 2016 are China, U.S., Argentina, Netherlands and Germany (Wits.worldbank.org. 2018). The top countries on the other hand they imported goods are U.S., China, Germany, Argentina and Korea.

The Trade Policy review on the other hand communicates that the country was enabled to resume its positive economic growth in the first quarter of 2017 after the fall in 2013 (Wto.org. 2018). Despite of the negative GDP, the country attracted increasing foreign investments throughout the period. The country further holds multicultural trading system that facilitates them in keeping the attraction alive.

The strengthened networking system in Korea among the distributors is much opportune for the establishment of the retail banking business. The appropriate negotiation is necessary to start the trade business in Korea since the country does not have any structured or systematic contract (Duval et al. 2014). The maintenance of the flexibility and adjustment is quite necessary for business expansion in this country. The development of the Free Trade Agreement is quite suitable for the profitable market place that can generate more revenues for ANZ Bank. ANZ Bank can easily opt for the personalized advisory services from Korea International Trade Association (Kohl, Brakman and Garretsen 2016). However, it is essential for the bank to develop the consistency in maintaining the rules and regulations while expanding the business entity in the Korean market. This method would help the company to create the sustainable market place for the longer period. 

PEST Analysis in Target Markets

The continuous inferences and frequently changing EU policies are quite risky for the business development of ANZ Bank. It creates the inefficiency in the multilateral processes that lead to the affected economic structure. The deficit in trade can also turn out to be unprofitable for the business expansion of a retail banking sector (Vegh and Vuletin 2015). On the other hand, the foreign and security policies developed by EU are quite in support of business expansion. The development of the fundamental human rights is increasing the scope of retail banking, which can turn out to be the best source of generating revenues for long run. The joint policies imposed by EU can resolve the issues emerge among the foreign countries. The increasing the mobility is quite helpful for sustaining the competitive position.

Though the rapid growth of Brazilian economy and politically stable situation proves to be beneficial for the foreign investors like ANZ in entering the market, there lies a number of threats from the competitors and the current economic scenario of the country. The greater section of the country’s population falls under low income group that minimizes the growth of ANZ in the market. Moreover, the existing competition and threat of substitute makes it challenging for ANZ to enter and increase market share in the country.

According to Betts, Giriand Verma (2017), the current and short term policies developed for attracting the foreign marketers can create both the risks and opportunities. However, it is notable that the rapidly growing economy of Korea is quite beneficial for the foreign retail bank, ANZ. However, the sudden fluctuation in the inflation and interest rate can become dangerous and riskier as well. The capital flow in Asia is still developing due to which it is quite difficult to plan for the long term period. Moreover, the instability and political violence bring changes in the trade policies, which can be much challenging for the business to operate in a competitive retail banking market. However, the implementation of the financial fiscal policies can amend the loss and structure the new opportunities to extract more benefits. 

Recommendation and Conclusion

The business market in France is developing by keeping pace with the economic environment. Moreover, following the rules and regulations imposed by EU would also be profitable for ANZ bank to develop the business entity in French market. However, it has been observed that the consumer market in France is quite extensive and demands are prioritized in a significant way. The existing business marketers in France are quite knowledgeable in terms of dealing with the various customer needs as well as the trade business needs. In such cases, it can be recommended that ANZ bank should adopt the partnering market entry strategy to establish the business partnerships with the local retail banks. It would be more feasible in identifying the basic consumer needs and the regulatory norms of the country. Accordingly, it would be preferable to develop the strengthened business entity in a competitive scenario.

ANZ in case of Brazil can utilize the joint venture for gaining competitive advantage in the market. This will help them to increase their market share using collaboration with one of the top players in Brazilian banking industry. Considering the challenges ANZ might face in expanding into Brazilian market proposes the joint venture that will reduce the damage taken from the market on the arrival of such situation.

The identified political instability in Korea is the major obstacle for the foreign business marketers. On the contrary, the frequent growth in the economic market is quite beneficial for earning the profitable returns of the business. Observing the insecure political scenario, it can be recommended that ANZ bank can secure the foreign business position by adopting the licensing market entry strategy. In such cases, the company would be secured by the government itself in time of political crisis. 

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