International Business & Strategy - BNP Paribas - 2750 Words

International Business & Strategy - BNP Paribas (Term Paper Sample) Content: International Business Strategy - BNP Paribasà ¢Ã¢â€š ¬ retail bankingNameClassProfessorInstitutionCityDateIntroductionMost global players in the banking and financial service provision looking to expand into new markets seem to be keen to do so through retail banking. Retail banking entails changes in the bankà ¢Ã¢â€š ¬s strategic focus to include services and products meant for consumers only as opposed to their traditional concentration on the corporate and government markets. Services offered during retail banking incude mortgages, saving and transactional accounts, loans, and debit/credit cards. The retail market is currently very vibrant in many developing countries due to growth in the middle class. Such environments give international banks such as BNP Paribas an opportunity to realise their expansion plans.BNP Paribas is one of Europeà ¢Ã¢â€š ¬s most successful banking institution with operations in more than 70 countries globally, more than 180,000 emplo yees, and global assets in excess of US $100Billion. A look at the bankà ¢Ã¢â€š ¬s recent balance sheet figures lists profits, which exceeded 150 million Euros in 2014 placing it in the top tiers of mid-sized banks in the European continent. Therefore, BNP Paribas is more than able to fund its retail banking expansion plans leaving only one issue; the target region or market for its expansion process. This report will identify one promising target market for BNP Paribasà ¢Ã¢â€š ¬s retail banking expansion plans and analyse its potential for success using a business strategy approach.The East African retail banking marketMost peaceful regions of the African continent are currently enjoying double-digit growth rates buoyed by industrial, agricultural and mineral-based developments. Africaà ¢Ã¢â€š ¬s potential in terms of agriculture, industry and mining is vast. However, the decades of turmoil, civil war and other negative aspects of the continent continue to prevent it from reapin g its potential. However, recent efforts by the African nations themselves aided by Western well-wishers seem to be changing its economic and development fortunes. At the forefront of these developments, economic empowerment through micro-finance and retail banking operations have continued to optimise the financial capability of the African markets (EY Emerging Markets Center, 2014). Some of the most promising markets in terms of retail banking include the Central and East African regions.The East African banking scene has been in a state of stagnation for decades due to the greatest deterrents of economic growth - corrupt leadership and civil war. However, since the mid 1990à ¢Ã¢â€š ¬s most of the countries have embraced peace and fostered mechanisms aimed not only cultivating social and economic growth, but also optimised their sustainability. Countries such as Kenya, which have not been victimised by the evils of civil unrest and war, have developed and sustained constant growt h in their banking and financial services sectors. Kenyaà ¢Ã¢â€š ¬s retail banking sector is testament to its relative peace since there are more than fifteen localised banking organizations in the country. By developing their individual economies and then fostering regional cooperation, the East African banking market has emerged as one of the African continentà ¢Ã¢â€š ¬s most attractive investment destinations for foreign players.From a banking perspective, East Africa is not the very well developed. Save for Kenya whose retail banking sector has experienced a boom in the last decade, Uganda, Tanzania, and Rwanda still lag behind in terms of service penetration as demonstrated by various reports. As of 2011,out of the populationsà ¢Ã¢â€š ¬ potential customers consisting of people aged 15 and above with an account in any financial institution, Kenya led with up to 40 percent penetration followed by Uganda with about 20 percent (Continent of dreams, 2013). Rwanda and Tanzania reg istered even lower figures demonstrating the regions lag in adopting and using banking and financial services. However, recent reports show that the level of penetration of banking services is on the rise aided by an improved awareness of its benefits and changes in the banksà ¢Ã¢â€š ¬ strategies towards retail banking and microfinance services.BNP Paribas could take advantage of the fact that although the traditional heavy weights of banking in the world such as Standard Chartered and Barclays exist in the East African region, their adoption of the retail banking business model remains sluggish (Cadle et al., 2014). Although local banks seem to be taking up the slack created by the big bankà ¢Ã¢â€š ¬s hesitance in offering retail banking services, their portfolios seem unable to keep up with demand. One demonstration of this scenario lies in Kenyaà ¢Ã¢â€š ¬s KCB Bank.Notwithstanding the bankà ¢Ã¢â€š ¬s good performance locally, expansions based on retail marketing into neighbou ring countries seem hampered by among other things a lack of financial ability. However, the local banking sector is growing as demonstrated by recent growth in KURTà ¢Ã¢â€š ¬s (Kenya, Uganda, Tanzania and Rwanda) banking assets. Recent figured place this growth from US $ 45 Billion in 2012, to US $ 52 Billion in 2013 (Financial Services in Africa, 2015). Although there is a lot of growth, BNP Paribas has the ability to penetrate into all potential markets easier based on its financial ability, especially though mergers or takeover of struggling baking institutions and micro-finance lenders whose increasing customer base it could capture and exploit.The East African retail banking marketà ¢Ã¢â€š ¬s macro-environmental characteristicsMacro-environmental characteristics entail the factors that affect a businessà ¢Ã¢â€š ¬s operations in a certain market. As such, the banking sector is subject to some political, economic, social, technological, and legal factors. However, in keeping with BNP Paribasà ¢Ã¢â€š ¬ entry into the East African retail banking market, a look at the target marketà ¢Ã¢â€š ¬s macro-environmental characteristics would entail: 1 Political factors à ¢Ã¢â€š ¬ The African continent has endured political unrest for decades. Such circumstances have, and continue to degrade the ability of the continentà ¢Ã¢â€š ¬s various economic sectors to grow. East Africa has not suffered as much as parts of Central and North Africa, but the Rwanda genocide in the mid 1990à ¢Ã¢â€š ¬s, coupled with Idi Aminà ¢Ã¢â€š ¬s dictactorship in Uganda and Tanzaniaà ¢Ã¢â€š ¬s ineffective socialist based uprising, as well as Kenyaà ¢Ã¢â€š ¬s internal problems contributed to the regionà ¢Ã¢â€š ¬s slow uptake of banking services. However, with the end of the Rwandan situation, Tanzaniaà ¢Ã¢â€š ¬s adoption of modern economic policies, Ugandaà ¢Ã¢â€š ¬s deposition of Idi Amin and Kenyaà ¢Ã¢â€š ¬s adoption of multi-democracy, growth in economic sectors such as bankin g started. The relative peace among these four East African countries has contributed to their formation of a regional trading and economic bloc dubbed the East African Community, which seeks to unite the playersà ¢Ã¢â€š ¬ political and social development strategies for optimised growth (Raeis Zadeh, 2006). In addition, the relative peace continues to foster social and economic growth as demonstrated by the growing middle class. Such circumstances have attracted foreign investment in industrial, mining, and financial sectors meaning a middle-level bank such as BNP Paribas seeking to expand its retail banking operations in new territory. 2 Economic à ¢Ã¢â€š ¬ The East African region is an economic powerhouse on the African continent based on the rich variety of mineral resources, relative peace, sustained political development, and regional cooperation. The existence of many local and international banking and financial institutions demonstrate the growing potential. Kenya had more than 40 banking and financial institutions as of 2014, with Uganda and Rwanda having 25 and 12, respectively. Tanzania had 34 (EY Emerging Markets Center, 2014). These statistics demonstrate the continuing economic development in the East African region. In addition to the number of banking and financial institutions, local economic monitoring organizations, as well as the IMF, World Bank and local central banks all share the same testament to the East African regional economic developments (Cadle et al., 2014). In addition, local banks seem to be expanding operations regionally as witnessed by Kenyaà ¢Ã¢â€š ¬s KCB foray into Uganda. Such economic development is one of the most important underlying factors that international banks seek while drafting and executing their expansion strategies. Such development in the East African region points to a growing middle class that requires tailor-made banking solutions which some of the local banks cannot meet due to systematic and financ ial inabilities. Therefore, BNP Paribas could consider this lucrative region during its retail banking expansions. 3 Social developments à ¢Ã¢â€š ¬ At the heart of every economically developing countryà ¢Ã¢â€š ¬s growth, are social factors that foster continued growth as much as they result from it. East Africaà ¢Ã¢â€š ¬s social community is bases most of its social and community development activities and strategies on the widespread belief in unity. No wonder upcoming providers of microfinance services such as Kenyaà ¢Ã¢â€š ¬s Equity Bank and Rafiki Microfinance continue to enjoy fast growth by exploiting the notion of togetherness in social and economic development. Such rapid and effective social changes continue to form an important part of the regions financial and banking sector growth. However, international players seem slow to notice these cues as they continue to concentrate on their bread...

Revolution in Relation to Poverty - Free Essay Example

Since its start roughly two centuries ago, the Industrial Revolution, particularly from 1780 to 1850, has peaked the interests of scholars, historians, and economists alike. More specifically, the era itself sparked the ongoing debate as to whether or not these technological advancements and ideas of industrial capitalism attributed to the degradation of the laboring classes, as most history textbooks outline. Though there are players for both teams siding with either optimism or pessimism, it is revealed in an essay from Boyson that the pessimistic opinions towards the working conditions, pay, and overall treatment of the laboring classes have overpowered much of what the general public sees and thus believes.. However, it is also exemplified through his essay that these are not the only claims to be made or heard, and that in the debate between optimism and pessimism, much statistical evidence exists supporting the former. Through this essay and the works and opinions of others, it becomes clearer to see that though the Industrial Revolution in Britain from 1780 to 1850 has become synonymous with overall pessimistic views and statistics, this essay will highlight that they are simply unfounded, as there is far more statistical evidence, tangible legislation, and professional historical analysis that airs to the side of optimism. For any reader or member of the general population to not only make a decision on which side bears more resemblance to what actually happened during this time period and at whose expense, one must first examine and evaluate both sides. However, almost every history textbook, including our own, has already educated much of todays society on the harshness and cruelty synonymous with the Industrial Revolution and its laborers. Marked as a time period filled with capitalism making the rich richer and the poor poorer, this era has effectively been stained, but was there a reason behind this? Of course. The working conditions for most were in fact awful. Legislation to protect most of what went on did not yet exist, creating an environment that was not only unsafe, but at times inhumane. For some, though, these claims went further. In The Communist Manifesto curated by Karl Marx and Friedrich Engels, laborers in the Industrial Revolution were spoken of in a way that insinuated that they were being taken advantage of by big business and privately owned factories thanks to the idea of industrial capitalism, and even mentioned the world slavery as a likeness to their treatment and wages. They summarize This process has, to an ever greater degree, ruined the old middle class, especially the small handicrafts men; it has entirely transformed the condition of the workers (Marx, Engels, The Communist Manifesto 43). Not only do they believe that the Industrial Revolution came at the expense of the laboring classes, but that this era in particular was in fact the start of this kind of treatment and degradation. While these opinions and more may have merit, this seems to be a reiteration of the only opinions many have heard throughout past history classes and a good deal of primary sources from photos to journals and beyond. However, if this was the only argument to be made here, the debate on this topic surely would not have lasted more than two centuries: there is simply more to be said and more to be learned. Despite all of the negativity that surrounds the Industrial Revolution itself, one must consider the world without it. This is what many historians and economists have done in defense of not only the revolution but of the workers behind it. However, this essay remains focused on the time period at hand, as the scholars who believe that there was more to this time period than capitalism and for lack of a better word, slavery. Boysons essay opened the door to the possibility that valid viewpoints and statistics existed for the opposing side, pointing out positive working conditions in some of the newer factories as well as more fair pay by some of the bigger businesses after some time. He states that It was the same improvement in the standard of living, large factories, [and] growing urbanization which enabled the new working classes to improve their conditions by trade unions, co-operative societies, and self-help(Boyson, Industrialization and the Life of the Lancashire Factory Worker 85). Not only is he implying from this statement that these laborers played a part in something now much larger than they were in the time period in which they worked, but through the conditions they faced they were able to gain not only responsibility, but a voice and a purpose. In addition, Ure is known for his opinions on industrial capitalism and the opportunities he believes the laboring classes were given to escape rural life and truly economic standstill. According to Ure, there just seemed to be no growth being made by these classes prior to the Industrial Revolution, and his views on the revolution itself are that there were countless positive effects that came out of the mechanization of Britain during this particular time period. He stated in his work The Philosophy of the Manufacturers that The constant aim and effect of scientific improvement in manufactures are philanthropic, as they tend to relieve the workmen At every step of each manufacturing process described in this volume the humanity of science will be manifest.(Ure, Philosophy of Manufacturers 1). Overall, these points and more within the works themselves have made not only a strong case in favor of the Industrial Revolution, but a seemingly stronger case for the working class citizens who took part in such an enormous improvement to society. In conclusion, although some argue that European governments may have made a point to degrade and take advantage of the laboring classes, the side that airs toward optimism is simply the one that best explains the environment surrounding the Industrial Revolution from 1780 to 1850 in Britain. Of course, looking at the bigger picture of the entire Industrial Revolution, there were many advancements made that benefited an even larger amount of people, so to compare the benefits of those who were not in the working class to those who were is simply apples to oranges. These laboring classes could not have been looking for large changes to their life, but simply opportunity. A chance to migrate and make something of themselves, find a craft or service that they performed well, and thus make a life for either themselves or their family. Of course there were pieces of the era that were poorly acted upon and at times took advantage of these laborers, and that long list of facts on the opposing side is simply why this debate continues and why historians and economists continue to learn more about the environment in which they are studying. However, upon further review and careful evaluation of both sides of this debate, optimism prevails not only in fact but in overall scope: these laborers were given opportunities they may not have had before, some were given a craft, others were given hope, and in the end they all gave something to a bigger picture of industrialization, new legislation, a better nation and world as a whole.