Internationalization Strategies
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The document outlines the internationalization strategies of a leading EU bank and a second-hand car auction service provider, emphasizing key growth factors, competitive challenges, and market dynamics. It discusses the bank's successful expansion through acquisitions, market knowledge, and adapting to regulatory changes, while the car service provider focuses on innovative solutions and market adaptation in its international growth. Additionally, it highlights the importance of addressing organizational development and customer needs in pursuing global opportunities.
Internationalization Strategies
- 1. Cases of InternationalisationValentine Bitouzé, Vanessa Levrat,Laura Perenz, Kristina Schweigert, Stephanie L. Webb
- 3. Company ContextToday Leading commercial bank in Euroland
- 4. One of the world’s ten largest banks in terms of stock market capitalisation
- 5. In 2005: award as the world’s best global bank
- 6. Bank with strongest growth over the last 20 yearsHow achieved?Successive stages of growth with 2 waves of internationalization
- 7. Combining strong implantation in local markets with global vision and capacities
- 8. Knowledge of domestic markets, hiring local staff
- 9. Growth depending on 3 key factors:
- 10. Customers
- 11. Net profits
- 13. Flexible management model (seize opportunities for growth and value creation), with a constant focus on:
- 14. Clients,
- 15. Efficiency
- 16. Risk control
- 17. On-going restructuring PESTELPoliticalEntry of Spain to the European Economic Community (EEC)
- 18. Spain socialist Government liberalization of the country’s financial sector by various measures deregulation
- 19. Spain’s Central Bank intervention to put Banesto Bank for auctionEconomic Extreme competition in Spanish financial system (e.g. savings banks) so cost reduction, operations systems improvement and innovationStrong competition in EU and worldwide
- 20. Euro as the EU’s new single currency in 1999 requirement of efficient and competitive financial institutions General challenges faced by the financial sector: greater competition, slenderer margins, globalization+ need to adapt to increasingly complex customers needs Management Issues and Solving ProcessConsolidation of domestic market (1984- 1994)Goal: increase profitability rather than to become bigger
- 21. Objectives: consolidate and widen customer base on Spanish market through natural growth
- 22. Launch of massive advertising campaign: 11% interest rate
- 23. Internal growth: Acquisition of Banesto bank in 1993 now big enough to compete internationally Expansion abroad Latin America and Europe (1994-1998 and 1999-2004)Aim: continue laying foundations of an international bank by diversifying its presence in South America and Europe
- 24. Knowledge of local markets (hiring local employees)
- 25. Diversification of activities on different geographic sectors
- 26. Many acquisitions and investments3) Purchase of Abbey National Bank (2004)Improvement of commercial position (revenue & management efficiency)
- 27. Further geographical diversification (UK market)
- 28. Synergy arises from technology and business model
- 29. Business in 3 currencies (€, £, $)
- 30. Biggest bank in LA and Europe1) Deregulation of the country’s financial sector Complete liberalization of interest rates and commissions
- 31. New legislation covering pension funds and plans
- 32. Reform of the stock market
- 33. Seen as a threat by the industry (higher competition)
- 34. Santander seized opportunity provided by de-regulation2) Euro as EU’s new single currency in 1999New market: requirement of efficient & competitive financial institutions
- 35. Company ContextFounded 1996 by brothers Peter and Martin GroftehaugeBusiness sector: Service provider 1. Development of innovative IT solutions for the second hand market for automobiles Vehicle valuation software 2. Assistance for sellers and buyers at online car auctionCustomer groups: Private
- 36. Business (car fleet owners, leasing firms)
- 37. Car dealers Benefits and advantages: “Fast and Easy”, “Efficient” “Competitive”PESTEL Economical:Second hand car market is very big and dynamicSociocultural:Sellers and buyers want to save time and resources, but still get a high reward
- 38. Need a secure and trustworthy trade platform
- 39. No big cultural differencesTechnological: Wide internet penetration
- 40. Need for valuation softwareLegal: European trade lawsCompetitive advantage in core business
- 41. Customers not only active on the national market
- 42. Company’s structure ad-vantageous for internat-ionalisation
- 43. Economies of scale: More cars can be sold; more co-stumers won
- 44. Learning and knowledge sharing
- 45. CAGE frameworkTransnational ConfigurationEuropean neutral and independent e-marketplace
- 46. Functionally and technically identical active markets
- 47. Differences: languages and few market-related issues Foreign Direct Investment New offices in countries of market activity
- 48. Websites for online car auctionProblems & SuggestionsProblemFocus on product development but not on organisational and market development No business plan, but “learning by doing” philosophySolving possibilities:Organisation and Markets should be focus, before further internationalisationFinancial capacity for future international expansion
- 50. Networking Establish an active plan Sweden and England need to be more efficient
- 51. Company ContextSAGEM SAFRAN
- 52. Merge between SAGEM and SNECMA
- 53. SAGEM = broadband and mobile phone
- 54. SNECMA = leading aerospace manufacturer
- 55. Technological innovations / early movers
- 56. Structure:
- 57. China & Brazil Software Development
- 58. Russia, India, Germany, France, & China R&D
- 59. France & China Production
- 60. Product Markets
- 61. Telephone
- 63. Defense and security electronics
- 65. Avionics and on-board aircraft information systems
- 67. Europe
- 68. Middle East
- 69. Africa
- 70. Asia (outsourcing for product production)
- 71. Latin America (central focus on Mexico)SAGEM’s strategy for entering Latin American market …
- 72. Entry Barriers for New MarketsCompetition – invitation to tenderCultural aspects, management of local workforceGeographic location – distance of the physical entitiesExample:Sales market MexicoSoftware Development BrazilProduction ChinaTaxation issues and negotiations with country and local governmentsMarket liberalisationImport/export tariffsCurrency exchange ratesConsistently fluctuating ‘What you pay today may be worth more/less tomorrow.’Labor IssuesConsumer and community responsesIs/isn’t locally developed or manufactured taking away jobsCould unknowingly be providing funds for child/woman abuseLINK – all of these factors should be considered when attempting to enter into a new market.
- 75. Change product to meet client demand maintain client relationship or gain new client
- 77. Adapt process line to each geographic regionForeign-Domestic Investment (long-term)Develop an entity in charge of Marketing, R&D, and Production for each geographic regionProblems (assumptions)Client accepts prototype and then asks for major changes to the specifications during/after production processLack of flexibilityLimited time to produce product.Technological innovationsEXAMPLE:Entering into the Mexican market
Editor's Notes
- #15: 1 mars3 cases studies : context/ main issues/ how itwassolved > 3 slidesAt the end draw the comparative table (thisslide) wecan use otherscriteria to compare each cases (teacherlikethat). 3 parts Context/ management issues / solvingprocessesFor each cases select the trigger elementsTake the exemple of the cases seenbefore to draw conclusion. 15 mars Wereceivedanother hand out, organised the way of presenting the knowledge (prefer a global approach) And use the example of the cases studiedbefore to support ourpresentation and illustrateit. Need to convince the teacherthatwecanbetrusted : the waywegiveour information We are the consultancyagency.Only use the case information / becreative