1. Executive Summary/Abstract

The minute you are satisfied with where you are, you are not there anymore.

(Tony Gwynn)

Every business in today’s world wants to earn more and more profit because the basic purpose of business is to earn and maximize profit. For the purpose of gaining more profit and expanding the business, organizations make efforts to reach different markets. After covering local markets the organizations looks forward to approach and occupy the international markets. Thisbusiness expansion not only carry profit maximizer purpose solely but at the same time growth makes good business sense, a better brand recognition. Not only building value in the business for employees and customers but also offers wide range of products and services to a larger geographical market. By doing so, the good will of the business will also increase.

Expansion of business is another aspect of the growth. Organizations can expand their businesses not only in local markets but worldwide. But the main question is how to choose markets that are suitable for the business. Markets should be selected very carefully otherwise the expansion will be of no use. Firms needed a lot of research and information before choosing a market which is sound for their business.

Another aspect of expansion is to increase the number of stores or outlets in order to reach foreign customers so that they could but company’s products with easy and readily. Customer satisfaction can build a very firm and sound good will of the company. More customers will bring better business.

2. ADVANTAGES OF EXPANSION

Some of the advantages of expansion are as follow:

· TARGET THE MARKET NICHE

By doing business internationally can and targeting the market niche can make leader in the business. Business can be expanded into new geographical markets where there is a need for it. By approaching these new markets organization can provide services for which the customers are looking for. By providing high level of services to the customers, one can grow business brand. It will bring value to the business by growing the brand and brings quality to the customers.

· ATTRACTING AND RETAINING EMPLOYEES

By expanding the business will also benefit in increasing the satisfaction level of the employees by offering them growth in their careers. This growth will not only attract the new talent but also helps in retaining and managing the existing employees. Promotion is one of main tools in increasing the performance of employees. It may work for the company to promote the performing employees to a new demographic location which is suitable for them to get high performance.

· CUSTOMER SATISFACTION

Another advantage of expanding the business at international demographer is to increase the customer satisfaction level. To gain maximum number of customers is also or may be a part of the strategy. By opening stores at international level can bring customers more and more. It will increase the customer satisfaction level by providing the products at their door steps and conveniently. Customers now days want to save time by avoid long distance driving to purchase products. They need things that are readily available and easy to use.

· ACHIEVING ECONOMIES OF SCALE

Another big merit of entering the global market is to achieve the economies of scale. Economies of scale means that business achieve low cost per unit. Greater the production, lower the cost. By expanding business in global means high and more production and by increasing production it means achieving the economies of scale.

In context for strategy formulation for international expansion of a renowned and reputable organization which has done work in Australia and New Zealand and for looking a suitable demographic place in a market to do business in the following countries, SWAT analysis must be done before entering into the market.

3. UNDERSTANDING THE DIFFERENCES IN STRUCTURE OF EACH MARKET

To understand the market in each country, we have to look closely into them and monitor various key points which are necessary to start any type of business. These key points include the demographic location, age factor, gender etc. It will be more helpful if we truly understand the situation of the country. By understanding and analyzing different market’s structure we will be able to make a good decision on the basis of factors that which market will be the most suitable place to enter and do business.

Following are the three markets for which company is assessing for entry.

· FRANCE

Ø Introduction

“France” the name derived from Latin word “Francia” meaning “Land of the Franks”.France is one of the most modern countries in the today’s world. It is playing a leading role among the European countries. It also plays a very powerful and influential role as a permanent member of United Nations Security Council, NATO etc. and many other organizations. It is the permanent member of United Nation (UN) and is also a leading member state of the European Union (EU). Paris is the capital of the country and is the main hub for cultural and commercial center. France has been a global center of culture, art, science etc. The people of France enjoys a high standard of living. The international rakings of education, health care are also good. The official language of France is French.

Ø Geographic location

France spans over 643,801 square kilometers. The European part of France is called metropolitan France, with a total land boundary of 2,751 km. There are 8 countries that share boundaries with it. The largest city of the country and the capital city is Paris. It is the most populous city situated on the river of Seine in the north of the country.

Ø Land Environment

The environment of France is habitual. The agricultural land for the purpose of cultivation is about 52.7%. The total irrigated land is about 26,420 sq. km. It is also blessed with natural resources some of them are coal, iron, and uranium etc.

Ø People and Population

The people of France are known as Frenchman for men and Frenchwoman for women. Different people with different ethnic groups and religions live here. The total population of this country is about 66.03 million according to metropolitan France and by seeing the comparison of French population with the world it gets the 22 rank. The age of majority of the population lies from 25 to 54 year which is almost 38.3% of the total population. This ratio can be very useful in terms of opening business in this part of the world. Hunting for talent and hiring will becomes easier with this type of age ratio.

Ø Economy and Government

The French economy is diversified and divided across all sectors. French government has privatized many small and large organizations fully or partially which includes Air France, Renault and France Telecom etc. It is the most visited country in the world with more over 84 million tourist visit this place in one year. It is the world third country that earn income from tourism. Real GDP of increased in 2015 which is 1.2%.Per capita GDP is $41,400 (2015). The unemployment rate is about 9.9% (2015). Total exports for the fiscal year 2015 was $509.1 billion and total imports were $539 billion for the same year.

Ø Banking System of France

The banking system of France is centralized which controls the large part of the republic. The name of the centralized banking system is Bank of France and it is situated in the capital city of the country know as Paris. It has the rights to issue currency notes and has the largest share of the whole banking system of the country. French groups were able to expand the business in the banking industry in retail banking, corporate and investment banking as well. These banks not only carry business in France but also around the world in various countries and especially in Europe. As of 2006, French banks generated 19% of their business outside France.

In the first half of 2007, the top three French Banking groups recorded a 24.4% rise in the total net income over one year. It shows a balanced banking environment of France. Which is suitable for investing in this sector in France.

· BRAZIL

Ø Introduction

Brazil is the largest country in South America bounded by Atlantic Ocean. Brazil share a border with almost every country in the South America except Chile and Ecuador. It is the fifth largest country in the world in terms of geographical mass. The economic system is a market economy in which the prices of goods and services are determined in a free price system. It is today South America largest economy and a regional leader. Pressing problems which include high income inequality, crime, inflation, rising unemployment and corruption. At the beginning of the 20^th century after the second industrial revolution in the developed countries, Brazil began to export primary products to Europe and North America.

Ø Land Environment& Geographical Location

Brazil covers almost half the continent. The total area that is covered by Brazil is about eight and a half million square kilometers. Despite having a large area territory the majority of the population stick to the cities. Total agricultural land is 32.9% and the irrigated land is 54,000 square kilometers. Almost half of Brazilian territory is covered vessels of Amazon River.

Ø People and Population

Total population of Brazil is nearly 200.4 million. Most of the population comes between the ages of 25 to 54 and comprises of almost 43.8% of the total population. Portuguese is the main language. Almost 90% of the population is Catholic. It’s has not taken full advantage of its large working age population to develop its human capital and strengthen its social and economic institution but is funding a study abroad program to bring advance skills back to country. The current favorable age structure will begin to shift around 2025, with the labor force shrinking. Most of the Brazilian population considered to be middle class. It’s been a secondary home for immigrants. Recent immigration comes mainly from Argentina and Chile.

Ø Economy and Government

Brazil is expanding and stretching its arms in the world markets. It has steadily improved its macroeconomic stability, building up the foreign reserves and reducing the debts. Since 2008, Brazil became a net external creditor and all three major ratings agencies awarded investment grade status to its debt. Its developing sectors include agricultural, mining, manufacturing and service sector as well. After a terrible fight with the recession its GDP growth has slowed down since 2011 due to various factors which includes high inflation, low productivity and high cost etc. Most of the population is based on middle class. Due to increase in the current inflation the goods become expensive. And cost of living has risen it is trying to strengthen its workforce and its economy over the long run by imposing local content and bringing and upgrading the technological requirements on foreign business, by investing education, healthcare, energy etc. Per capita GDP is about $15,800 (2015). President Dilemma ROUSSEFF is both the chief of state and head of the government. Currency used in Brazil is the real having ISO code BRL.

Ø Banking System of Brazil

The banking system of Brazil is highly consolidated as a result of significant M&A activity. More than 80% of the overall bank assets are acquired by six leading banks that maintain a solid position in the banking sector of Brazil. The name of the Central Bank of Brazil is “Bacen”. Bacen is an autonomous governmental entity responsible for the execution of monetary policy.

· KOREA

Ø Introduction

Korea is a historical estate emerged in Northeast Asia, since 1945 Korea is divided into two sovereign states i.e. North Korea & South Korea. Korea shares the borders with China to the Northwest and Russia to the Northeast. The communist inspired government in North received backing from the Soviet Union in opposition to the pro-Western government in South, which lead to the Korea’s division into two separate entities into North Korea and South Korea. The South Koreans a multi-party state with a capitalist market economy which has grown since 1960s, and the structure was transformed.

Ø Land Environment& Geographical Location

Korea share the borders with China to the Northwest and Russia to the Northeast. Total area of North Korea is 120,538 square kilometers and the total area of South Korea is 99,720 square kilometers. The Korea is divided into two states i.e. North Korea and South Korea. Korea is located on the North Peninsula in North East Asia.

Ø People and Population

The official language of Korea is known as “Korean”. The total combined population of North and South Korea is about 75 million. 50 million population stands with South Korea and about 25 million with North Korea. There also stands a conservative cast ideology in Korea similar to Japan and India. They are named as baekjeong, the untouchable cast like the Dalit’s in India.

Ø Economy and Government

In 1957, South Korea had a low per capita GDP than Ghana and in 2008 it was 17 times as high as Ghana. North Korea is one of the worlds centrally directed and least open economies. The economy of North Korea is facing severe problems. In December 2009, North Korea redenominated its currency. The standards of living here are also poor. Huge number of people with starvation problem. Whereas South Korea has shown incredible economic growth in the past four decades. It has become the high-tech industrial economy. The government promoted the import of raw material and technology at the expense of consumer goods, and encouraged savings and investment overconsumption.Its long term challenges include a rapid aging population, inflexible labor market and heavy reliance on exports etc.

Ø Banking System of Korea

The Korean financial industry consists of three groups i.e. a central bank, deposit money banks and nonbank financial institutions. The name of the Central Bank of Korea is “Bank of Korea”. The primary purpose of the bank, as prescribed by the Act, is the pursuit of price stability and secondly financial stability. Central bank issues bank notes and coins. Since the financial crisis risen at the end of 1997, the Korean financial system has been undergoing substantial changes in the course of a comprehensive financial reforms.

4. ESTIMATION OF POTENTIAL SIZE AND PROFITABILITY OF EACH MARKET

Since the globalization is more and more developed concept these days, the global market has become indispensability part of the business thinking. The market size is defined through the market volume and the market potential. The volume of market depends upon the quantity of consumers and the demand. While different organizations in a market will have different levels of profitability and is based on the SWOT analysis. While seeing the above mentioned facts and figures collected from the three countries. By analyzing the market segmentation that includes the geographic, demographic and psychographic analysis and the profitability of each market we can judge that the potential size of market in France is comparably bigger and suitable than the size and profitability of the market of Brazil and Korea. The economic conditions of France are the most suitable and viable to carry out business activities. Moreover, the economic stability lead to a sound market over there. The market size and the profitability ratio in Brazil and Korea are less due to many problems that are being faced by these two countries. The potential size of the market of France is also large as compared to Brazil and Korea due to economic advancement and hub of Europe.

5. ANALYSIS OF POTENTIAL PROBLEMS IN SELLING TO AND SUPPORTING EACH MARKET

The politics and law of nations dramatically influence the practice of international marketing. If allowed to enter a country, a firm or a business may be restricted. A business may be prohibited to acquire a national firm or it may not allowed to a 100% ownership or it may restricted to number of products to sell in the market. For instance, UK, Australia, Brazil and Canada are debating and thinking of whether to reduce foreign ownership restrictions on media. A country’s quotas and tariffs may limit a firm’s ability to import components, products or forcing a higher level of local procurement than the business wants to. By analyzing the potential problems to the markets one can decide and understand that the restrictions on France as compared to Brazil and Korea are less and the environment for business is much suitable as it is in the heart of European Union. Paris is the center of attraction for many years. Other countries i.e. Brazil and Korea are suffering from problems that are comparably less in France.

6. ANALYSIS OF FUTURE DEVELOPMENTS

Today, banks are facing a very rapid and irreversible changes across technology, customer and regulations. The net effect is that the industry’s current shape and operating models are no longer sustainable into the future. If we want to analyze the future developments in the respective countries than three things must be kept in mind i.e. technology, customers and regulation. For instance, technology has changed the way world moves. It has not just squeezed the time but also helped to do things and work in a more professional way and with ease. In banking sector, technology is being used to facilitate the customers. The whole banking system is connected together like spider’s web with the use of technology. ATM machines are linked up with each other to provide services to the customers 24/7. Customers are another factor that necessary to analysis for future developments. The behavior of the customers must be kept in mind, what they think, what they want etc. What is the educational level of the customers in the respective region? Are they well educated to cope and understand the technological changes and can run with the time? The challenges and dilemmas posed by the parallel changes in technology, customer and revolution are not confined to the incumbent banks or even the non-banking pretenders. Future developments analysis we need to look that the core banking services are delivered outside of the regulated banking industry is feasible, it may be based on the hypothesis but we need to look into it. The financial crisis undermined trust in banks and spawned extensive regulation as changing markets, technology and regulation reduce barriers to entry. So, in context to expand business one need to look a market where technology, customers and regulations may favor him in the near future.

7. CONSIDERATION OF FOREIGN EXCHANGE AND TRADE IMPLICATIONS

Foreign exchange is a global and decentralized market for the purpose of trading currencies. The trading of the currencies include all the aspects of buying, selling and exchanging of currencies at a current or determined prices. The main participants of this market includes large international banks.If a bank is doing business internationally than this type of product can be introduced. People move and send currencies around the world and around the clock due to many reasons. Expanding company to a new country market will also bring business in terms of foreign exchange. One has to decide by analyzing the markets that which market will be more suitable for this type of business. I think France is the best option for this as it is the travelling hub of the globe. People from around the world visit this place and by doing so they need money for this purpose. Opening bank in this type of market will benefit in context to the above mentioned heading. The foreign exchange market assists international trade and investments by enabling currency conversion. For instance, it permits a business in the US to import goods from European Union member states and pay Euros, even though its income is in US Dollars. It means if one wants to trade and trade and import goods from the other country than he has to pay amount in the currency from which he is importing goods. The main trading centers are London and New York City but Tokyo, Hong Kong and Singapore are all important centers as well.

8. CONSIDERATION OF CULTURAL ASPECTS IMPACTING ENTRY

When a company moves a want to start a business in a foreign market, it must kept in mind and learn how to deal with that market’s particular culture. A country’s culture includes language, religion, norms etc. A company must take a look at different aspects while moving and starting business in a foreign market. There may be a great difference in cultural of different countries. Understanding the cultural difference of the country or foreign market can not only help to setup a business in a foreign market but also help to maximize the profits, to engage the employees etc. When going for international market the company must kept in mind the challenges would be unfamiliar. Culture is one of these obstacles and can affect the entire business. As this world is becoming a global village, every business wants to expand and want to start business in foreign markets. To achieve the economies of scale this cultural difference must be eliminated. To compete in the market is also another problem. Competitors are always ready to take over the charge. To tackle this cultural difference must be avoided and eliminated.

9. CONCLUSION

To conclude and summaries the whole discussion and to ascertain and conduct the result out of it, we can say that France would be the best option to enter into the market. When we compare the three markets of France, Brazil and Korea, the best option among is France. The market of France is the most suitable place to enter in the banking sector as it is in the heart of Europe, working under the umbrella of European Union. In fact, played a crucial role in defining the central currency unit for Europe. Another aspect is France is also the hub of tourism. Which keep it alive all the time. Tourists visit France from around the world which gives it a high amount of business. Whereas, the market of Korea and Brazil are less attractive due to less developed and moderation. Also different hurdles make these market more vulnerable. Economic sanctions on North Korea due to nuclear test for creating the weapons of mass destruction, made it more difficult to start business in that market.Moreover, economy of France is much more stable and flourished than the other two countries.