Discuss about the International Business for Life Assurance and Consumer Insurance.
AMP Bank offer banking services in Australia and New Zealand. As explained earlier, the bank provides banking services for local retail and business customers (Tamura, 2018). AMP provides loan services to cover various sectors like mortgages, life assurance and consumer insurance. The bank also provides loan and finances services to the customers with the lowest interest rates in the Australia market. The bank offers both online and over the counter services. AMP control a big customer share in Australia having an approximation of more than 1 million customers majority of them operating personal accounts (Rugman, 2017). The bank also provide finances and loans to the customers to finance the business activities. AMP is one of the leading banks that offers finances to the customers with low interests. The bank ease the services to the customers by providing products and services through convenient means like cell phone as long the internet services are accessible. This paper provide clear suggested strategies to be adopted by AMP bank to enter in the Canada market, foreign market.
AMP Bank started its operation in Sydney. Over the years since 1998 when it was incorporated it has established branches all across Australia and New Zealand (Verbeke, 2017). Its head quarter is in Parramatta, Australia. The bank provide premium services to the customers through the use of accredited means. Recently the bank has adopted internet and mobile banking services. This has been accepted and widely adopted by the customers who are approximated to be more than 1 million across Australia. AMP bank use different accounts and products to suit all the types of customers in the country.
AMP bank is proposing to provide the premium banking services to Indonesia. The major products and services proposed are the personal banking, loan and mortgages, insurance, business banking and online and mobile banking. These services has been offered in Australia and the bank over the years has demonstrated high capabilities and potentials of extending this services oversees. Personal banking targets the high population of the Indonesians who are low income earners. This target group is accessed through online and mobile banking at the comfort of the mobile phone that can access internet services.
Canada is one of the largest country in North America. The country has a stable and diverse economy for investment and new business generation (Buranatrakul, 2018). Finance and bank industry are the major contributors in the stabilization of the economy. Safe banking has been associated with the proper regulatory measures to govern the finance flow in the country
According to Forbes, Canada is among the richest countries in the world. Its economy is at position 10 globally. GDP has a growth rate of 4% during the last quarter as per 2017. Overall growth of 3% was recorded in the country in 2017. This growth has been associated to stronger investments and net exports through improved global trade. Micro economic policies have contributed to investment growth reaching to the GDP increase. The government collects little tax. The inflation rate was recorded to be 1.79% in 2018 (The Statistics Portal, 2018. Canada has a population of more than 36.8 million this population provide a good opportunity for the business growth (Lopes and Amal, 2017).
Australia and Canada has maintained a good relationships over the years. This relationship has brought tremendous benefits to both nation in the consideration of business activities and low tariffs across the borders (Swierczek, 2018).
Direct investment is the main entry strategy to be adopted by AMP bank. This involve building and establishing bank branches in different cities in Canada or acquisition of already existing banks. AMP intends to start with four branches in Canada and thereafter other branches will be developed depending with the performance of the four prototypes. This process comprises the allocation of resources (Bourreau, 2018). This suggests that the investment strategy bears more risks in terms of personnel and capital. However, this method provide wide benefits as the it serve to control the market well when inside the market. This is costly, but permits the business to establish processes the way it wants and use its own people the run the business (De Rosa, 2017). This mode on the other hand serve to benefit the bank in avoiding the risks of losing the technological aspects. This mode do not invite the competitors in the business hence the secrecy of production is kept to the bank (Carretta and Schwizer, 2017).
Direct entry of AMP bank can be done through two major approaches as mentioned above that is acquisition and Greenfield. Acquisition involves acquiring an established bank in Canada. Greenfield involves setting a new operation from scratch in Canada. These strategies reduces the risks of losing the control over the competencies. They give the bank a proper control over the whole operations that are necessary for the global strategic coordination (Carretta and Schwizer, 2017). Acquisition compared to Greenfield is quick to execute, facilitates the bank to pre-empt the competitors and are risky compared to Greenfield. Care should be taken when settling for acquisition to avoid overpayments and also ensure the acquired bank has no any clash with the cultures. There should also be adequate pre acquisition screening. AMP bank ltd can overcome the risks of acquisition by performing carefully the acquisition strategies. Going for Greenfield will benefit the bank with the benefits of greater abilities to build subsidiary in the best way needed. However, this venture is slow to establish and it is very risky (Lopez, 2017).
Market Entry Strategies
AMP bank ltd is intending to exploit the market through franchising. This is one of the easiest way to enter the market. It is not costly and most of the expenses are catered by the correspondent banks (Jaramilloa, 2017).
This strategy is of great important and considerations when it comes to saving and minimization of risks associated to the starting and operating new business in the foreign market. Competitive advantage of AMP banks lies on the management know-how of the bank. The risk of associated to losing the control of management skills through this mode is very minimal and the benefits associate to this mode are much more hence this mode is necessary to be used in conjunction with direct investment entry mode (Sethi, 2018).
The bank can also engage in cross border offering of transactions without establishment of the facilities in Canada. This can be achieved through the corresponding banks. Canada provides reputation to intensifying range of monetary services across the country. AMP bank in Canada will be categorized as Plan II category banks underneath Canadian Bank regulation Act. Entering the market for the first time attracts the pressure of cost reduction and entry mode (Dinu, 2018). The best way for AMP bank ltd is to pursue some combinations like franchising strategy. This will reduce the cost of offering the services and in return offer the services at the lower cost as obtained by the benefits of economies of scale.
The first stage for a business to survive in foreign nation marketing is conducting a proper research and development. Market segmentation according to demographic servers better in the case of AMP bank. For the bank to understand and position itself in the market, AMP bank has to do research about the market, know the target customers and what they want at what time (Hossein, 2017). R&D will help the bank to do value creation in the product and services hence meeting the customers’ needs and in return increasing the market share. Understanding the market follows the adoption of the appropriate marketing strategies. Marketing will involve making decision on the marketing mix across Canada. This involve combining the price, place, product and promotion to achieve the bigger portion of the market within the shortest time possible in Canada (Gangasani, 2017).
The immediate marketing mix strategy for AMP would the location positioning. AMP will locate its branches in the cities where the business will serve to advertise themselves to the customers. Cities is where the higher population is found hence higher expectation of the business performance. Once location strategy has been achieved, global standardization strategy can be adopted where the main focus is on the increase of the profit (Singh and Sandhu, 2017). This will be done easily through reducing the cost of the products that is offering loans at lower interest rates, offering services with low transaction charges and offering free consultation services on the finance matters. This strategy finally would leads increase in the number of customers hence enabling the bank to enjoy from the economies of scale (Bulzacchelli, 2017).
Direct investment strategy
When entering the market for the first time the business is faced with pressure to reduce the prices hence this method will be suitable for AMP bank. Promotion is another marketing mix that will be exploited fully. This will be done to increase the bank awareness to the Canadians. Considering the high population figure of Canada, promotion will be mandatory to capture a considerate market share (Wielgos, 2017). Promotion will be done through several strategies; advertising, this will be done through newspapers, television and any media available in Canada; personal promotion and brokers, sponsorships, use of display rooms across the country. Once the bank is known in Canada, other marketing strategies will be followed to maximize the number of customers and also survive in the market (Cascio, 2018).
Marketing strategies will also involve adopting strategic alliances where AMP bank will enter into short term contractual agreement with other banks in Canada to offer certain financial products that would benefit both banks. A good example is having an insurance cover product that is offered by both banks. This facilitates entry into the foreign market and also serve to lower the cost for products and service productions (Mukhopadhyay, 2018).
Marketing and sales will also involve having the best workforce in the business. AMP banks has to employ the right individuals to perform the marketing and sales activities. This will increase the reputation of the bank by increasing the customers confident through offering of the best services. Offering professional services to clients help them to feel satisfied hence wining their trust. AMP bank has been offering excellent services in Australia and what will be done in Canada is just the offering the same and improving where necessary to suit the culture differences within the two countries (Thomassin, 2018). Staffs will be trained and developed to cope up with the culture and new guidelines in Canada. Wherever necessary the staffs training for marketing will involve the criteria of language differences.
AMP bank ltd production refers to the activities involved in the production of financial services and products. This involve lowering the cost of offering the services and adding values by serving the customer needs professionally. As touched earlier, the products serviced by AMP bank are accounts, mortgage advances, saleable loans, user loans, accept payments, internet lending, credit and withdrawal services cards and cover. Accounts will be offered at the lower cost to attract the competitor customers. Loans will be provided at lower interest rates and with slightly longer repayment period. The products will be generally offered at the lower charges compared to other banks in Canada. Quality is the main goal for AMP bank to survive in the foreign market. Quality and cheaper services is achieved through observation of Canada rules and regulations pertaining banks and also giving the customers what they need most (Mook and Armstrong, 2017). Those are the main strategies for production and market survival in Canada.
AMP bank ltd human resource management will incorporate Canada culture, labor market, legal system, economic system and the targeted goals. The labor act in Canada demands the foreign companies to have 15 % of the employees’ slots being reserved for the locals (Rugman, 2017). This will be observed to the optimum. Employees will be recruited based on the qualification merits for the posts available. Canada comprises both English and French speaking natives. Staffs selection will include this criteria to ensure all the customers are served effectively. Ethnocentric approach of staffing will be observed to ensure key management positions are filled by AMP bank staffs from Australia. This will be observed to reduce the cost of training new staffs into the terms and traditions of the bank. This also serves to maintain a unified corporate culture in the bank hence increasing the competence (Wielgos, 2017)..
Other junior position are filled with the staffs from Canada. Over the time junior staffs learn the bank traditions and develop competence and with time they rise to occupy the management roles of the bank. Staffing in the lower levels of management will seeks geocentric approach of staffing. This policy sought to employ the best and qualified staffs for particular post in the bank. This approach will serve to build a consistent strong unified culture in the bank. Five major factors will be observed in the selection and training of staffs, these are, expert growth, information transfer, and delivery of necessary expertise, improved governance and better coordination (Mook and Armstrong, 2017).
Training will begins after selection and this will involve preparing the staffs for particular roles. Training as mentioned above will involve training on the culture, language and practical training. Culture training seeks to introduce the staffs to Canada culture. Language training will serve to ensure the staffs selected are conversant with both French and English. Practical training serves to enable staffs to adapt the day to day life in Canada. Development will be done over the years to increase the overall skills in staffs. Gender rules which suggest 17% of the staffs be reserved for women will also be observed. Performance appraisal for all the staffs will also be done to increase the productivities in the bank and also correct any deviation in services delivery. Compensation for all staffs will be compensated using a common currency. In this case Canadian $ will be suitable. Allowances and benefits will be offered fairy to all the staffs. Taxation for all the staffs according to the Canadian tax and revenue act will be observed to the later.
In conclusion, AMP bank limited survivor in Canada market all depends with the strategies outlined in the report. The strategies are going to help the bank in entering the market and conducting the business competitively. Staffing is one of the key factor that will help AMP bank to survive in oversees market.
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