Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities

The greatly improved economic fundamentals of the major emerging economies over the last decade have propelled several emerging banks into the ranks of the world's largest. Despite their importance in the global economy, the internationalization of emerging market banks remains an understudied phenomenon. This article examines factors that may influence the internationalization strategies of emerging market banks in the private banking sector, both when going abroad (take-off) and upon arrival in a host country (landing). The private banking sector is of significant interest given its importance in many leading financial centers around the world while undergoing major transformation due to the worldwide financial crisis, several recent scandals, and a fast-changing regulatory environment. We highlight the internationalization strategies of two banks from emerging countries, China and Brazil, and their experience in Switzerland's traditional private banking sector. These two cases highlight factors that may influence successful internationalization such as prior industry experience, existing client base, entry strategy, ownership type, and the liability of foreignness. Our findings offer valuable implications for managers from other emerging economies by providing a better understanding of how emerging market banks expand internationally.

Authors :: Joseph C. Marques, Anna Lupina-Wegener, Susan Schneider

Topics :: Global Business

Tags :: Emerging markets, Strategy, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities" written by Joseph C. Marques, Anna Lupina-Wegener, Susan Schneider includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Emerging Internationalization facing as an external strategic factors. Some of the topics covered in Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities case study are - Strategic Management Strategies, Emerging markets, Strategy and Global Business.

Some of the macro environment factors that can be used to understand the Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities casestudy better are - – increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, etc

---

---

---

---

Introduction to SWOT Analysis of Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Emerging Internationalization, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Emerging Internationalization operates in.

According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.

---

SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities can be done for the following purposes –
1. Strategic planning using facts provided in Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities case study
2. Improving business portfolio management of Emerging Internationalization
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Emerging Internationalization

---

Strengths Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Emerging Internationalization in Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities Harvard Business Review case study are -

Strong track record of project management

– Emerging Internationalization is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Low bargaining power of suppliers

– Suppliers of Emerging Internationalization in the sector have low bargaining power. Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Emerging Internationalization to manage not only supply disruptions but also source products at highly competitive prices.

Training and development

– Emerging Internationalization has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.

Organizational Resilience of Emerging Internationalization

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Emerging Internationalization does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

High switching costs

– The high switching costs that Emerging Internationalization has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Effective Research and Development (R&D)

– Emerging Internationalization has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Learning organization

- Emerging Internationalization is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Emerging Internationalization is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Ability to lead change in Global Business field

– Emerging Internationalization is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Emerging Internationalization in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Analytics focus

– Emerging Internationalization is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Joseph C. Marques, Anna Lupina-Wegener, Susan Schneider can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Sustainable margins compare to other players in Global Business industry

– Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities firm has clearly differentiated products in the market place. This has enabled Emerging Internationalization to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Emerging Internationalization to invest into research and development (R&D) and innovation.

Ability to recruit top talent

– Emerging Internationalization is one of the leading recruiters in the industry. Managers in the Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Highly skilled collaborators

– Emerging Internationalization has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

---

---

Weaknesses Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities are -

Aligning sales with marketing

– It come across in the case study Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities can leverage the sales team experience to cultivate customer relationships as Emerging Internationalization is planning to shift buying processes online.

Products dominated business model

– Even though Emerging Internationalization has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities should strive to include more intangible value offerings along with its core products and services.

High operating costs

– Compare to the competitors, firm in the HBR case study Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Emerging Internationalization 's lucrative customers.

Slow decision making process

– As mentioned earlier in the report, Emerging Internationalization has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Emerging Internationalization even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

High bargaining power of channel partners

– Because of the regulatory requirements, Joseph C. Marques, Anna Lupina-Wegener, Susan Schneider suggests that, Emerging Internationalization is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities, is just above the industry average. Emerging Internationalization needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.

Workers concerns about automation

– As automation is fast increasing in the segment, Emerging Internationalization needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.

High dependence on star products

– The top 2 products and services of the firm as mentioned in the Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Emerging Internationalization has relatively successful track record of launching new products.

High cash cycle compare to competitors

Emerging Internationalization has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Increasing silos among functional specialists

– The organizational structure of Emerging Internationalization is dominated by functional specialists. It is not different from other players in the Global Business segment. Emerging Internationalization needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Emerging Internationalization to focus more on services rather than just following the product oriented approach.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities, in the dynamic environment Emerging Internationalization has struggled to respond to the nimble upstart competition. Emerging Internationalization has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

---

Opportunities Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities highlighted in the Harvard Business Review case study Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities are -

Developing new processes and practices

– Emerging Internationalization can develop new processes and procedures in Global Business industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Emerging Internationalization can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Building a culture of innovation

– managers at Emerging Internationalization can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.

Use of Bitcoin and other crypto currencies for transactions

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Emerging Internationalization in the consumer business. Now Emerging Internationalization can target international markets with far fewer capital restrictions requirements than the existing system.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Emerging Internationalization to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Emerging Internationalization to hire the very best people irrespective of their geographical location.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Emerging Internationalization is facing challenges because of the dominance of functional experts in the organization. Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Emerging Internationalization can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Learning at scale

– Online learning technologies has now opened space for Emerging Internationalization to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.

Reconfiguring business model

– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Emerging Internationalization to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Emerging Internationalization can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Changes in consumer behavior post Covid-19

– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Emerging Internationalization can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Emerging Internationalization can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Emerging Internationalization in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.

Low interest rates

– Even though inflation is raising its head in most developed economies, Emerging Internationalization can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.

---

Threats Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities are -

Instability in the European markets

– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Emerging Internationalization will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.

Technology disruption because of hacks, piracy etc

– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.

High level of anxiety and lack of motivation

– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Emerging Internationalization needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.

Consumer confidence and its impact on Emerging Internationalization demand

– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.

Aging population

– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities, Emerging Internationalization may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .

High dependence on third party suppliers

– Emerging Internationalization high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Emerging Internationalization with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

Capital market disruption

– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Emerging Internationalization.

Shortening product life cycle

– it is one of the major threat that Emerging Internationalization is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

New competition

– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Emerging Internationalization in the Global Business sector and impact the bottomline of the organization.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Emerging Internationalization in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

Easy access to finance

– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Emerging Internationalization can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

---

Weighted SWOT Analysis of Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants. We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –

First stage for doing weighted SWOT analysis of the case study Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.

Second stage for conducting weighted SWOT analysis of the Harvard case study Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.

Third stage of constructing weighted SWOT analysis of Internationalization Strategies of Emerging Market Banks: Challenges and Opportunities is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Emerging Internationalization needs to make to build a sustainable competitive advantage.

--- ---