mark343

Extended Marketing Mix

6.0 Situation Analysis: Turkey

Presented By:

2.0 Selection of the Top 5 Countries from existing 15

Political

• The country governed by the Justice and development party run by Recep Tayyip Erdogan. Party has been pushing for an Islamic agenda which seems to be eroding Euro-Atlantic ties.
• Fiscal policy is sound with reasonable spending and taxation
• Financial freedom and business freedom index above average.

Hanisha Kumar 4357310

Kawthar Alashrafi 4381324

Mariam Antaki 4329405

Muhammad Majid 4172760

Roshan Paryani 4149683

PEST

Technology

• Growing access to the internet, expected to rise to 47 percent in 2017
• Increased spending on ICT infrastructure , spending to rise to 25 billion in 2016
• Increased usage of credit cards online

Regions:

Socio-Cultural

Economic

• An Islamic country with 99.8 percent of the population being Muslims
• Lifestyle tends to reflect more on the European countries it borders
• Great affinity for material possessions , increased spending
• 42.9 percent of the population is in the age bracket of 25-54

• Growing economy with an annual GDP growth rate of 4 %
• Real interest rate is higher than that of U.K , therefore people more likely to save than borrow comparatively

• South-East & Far East Asia
• Middle East
• Central Asia
• North America
• Western Europe

7.0 Market Entry Strategy

5.0 Market Opportunities and Limitations

5.1 Banking-Related Indicators

Source: World Bank 2013

The strategy chosen was the Eclectic paradigm, also known as the OLI- Framework

1. Ownership Advantages – Buckley’s possesses a wide range of resources and capabilities, as well as being highly innovative and experienced in the banking sector. (e.g on the go credit cards)

2. Location Advantages – The decision to expand into Turkey was mainly driven by its high technological potential and workforce productivity.

3. Internalization Advantages – Limited legal requirements & restrictions and short waiting periods in between approvals for starting businesses.

5.2 Evaluation of Top 5 Countries

LUXEMBOURG

• Multi-lingual Workforce
• Specializes in Accounting/Legal
• Corporate Tax Levels: 29.22% (Delloite, 2014)
• Dominated by core banks

3.0 Business Climate

HONG KONG

Barriers and Opportunities

Limited Legal Restrictions

Major Opportunities in Private Banking

Buckleys specializes in Retail Banking

8.0 Market Entry Mode

Target Bank for Acquisition

TURKEY

Source: Kemp, 2014)

Geographic Positioning

Encourages FDI

Consumer DD for loans

PPP Projects

Must invest in customer facing operations

Push & Pull factors

Source: (Petrou, 2009)

• In 2008, 60% of shares were acquired by the National Commercial Bank of Saudi Arabia (Smith, 2014).
• In February 2014, NCB announced that it would be offering 15% of its shares in an IPO

UAE

"Buckleys has RE worth $8.5bn.

Acquisitions in Turkey range from $2mn-$460mn"

Strong potential in E-Banking Sector: 88 out of 100 people use the internet (World Bank, 2013).

Market is over-banked and Competitive

KAZAKHSTAN

Source: (MENA Research, 2012)

UAE

• High competition
• Strict regulations
• High cost operations

Luxembourg

• No legal entry Barriers (E.U)
• High competition
• Low population

Kazakhstan

• Low GDP
• Low Legal and political index

Hong Kong

• Low inflation rate
• Stable currency
• High Tax rates

Turkey

• High Inflation rate
• Comparatively an unstable currency
• Low competition
• High population

Leading in Oil reserves

Increase in inflationary pressures

Poor infrastructure

Infrastructure with respect to:

Outline:

4.0 Marketing mix elements and the infrastructure required

• Luxembourg –Strong in all aspects , however is overbanked and tax levels too rise due to changes in EU regulations.
• Turkey – Weak in terms of political stability and psychic distance , growing on other fronts
• Kazakhstan – Technologically deficient with dubious political climate , growing in other aspects
• Hong Kong- Strong is most aspects , however market for banking is over saturated
• UAE – Strong , but over-banked and restrictive legal business requirements.

10.0 Implementation plan

1.0 Company Overview

2.0 Selection of Top 5 Countries from 15

3.0 Business and Investment Climate

4.0 Infrastructure and the Marketing Mix

5.0 Market Opportunities

6.0 Situation Analysis: Turkey

7.0 IME Strategy

8.0 IME Mode

9.0 Standardization vs Adaptation

10.0 Implementation Plan

11.0 References

• Product – Requires a strong legal infrastructure and political stability
• Price – low levels of taxation and inflation
• Promotion – How easy it is to understand the market ?Psychic distance between home and target market.
• Place – Methods of retail ? Online , Brick and mortar.

List of activities to be covered

• Finding a Liaison (November 2014)
• Finalize the acquisition (December 2014)
• Submit the memorandum and articles of association online at MERSIS (January 2015)
• Transferring the acquired banks assets (January 201)
• Depositing assets (February 2015)
• Complete and authenticate company papers (February 2015)
• “Apply for registration at the Trade Registry Office.”(March 2015)
• “Certify the legal books by a Notary Public.” (March 2015)
• Transferring customers from the acquired bank (March 2015)
• Start designing the retail space to match the brand image. (April 2015)
• Scouting competitions in order to match or better them (April 2015)
• Implementing marketing promotions and advertisements to make customers recognize the brand before start of operations. (May 2015)
• Follow up with the tax office on the Commercial Registry’s company establishment notification (June 2015)
• Finalizing the price and promotion (July 2015)
• Start of operations (August 2015)

1.0 Company Overview

Buckleys Bank UK

Helping you grow!

Situation

Reference List:

Buckleys is planning on expanding operations internationally. Where should they invest?

• UK-Based Commercial Bank established in 1973 in London.
• Specializes in Retail Banking
• Divisions in Wealth Management & Private Banking, Preferred Banking, Loan Servicing and a specific division allocated to Mortgage Banking.
• Introduced its Electronic Banking Division in 2000
• Competitive Advantage: RFID embedded Debit Cards

Shortlisting of countries

9.0 Standardization vs Adaptation of Marketing Mix

1,870 branches in UK with

110,000 staff

• American chamber of commerce in Luxembourg (2013) Why Luxembourg? , available: http://www.setupineurope.com/setupineurope/docs/pwc-why-luxembourg.pdf
• Arnold, T 2013, Gulf Banks Look For Acquisitions in Turkey, [Online] [Accessed November 22, 2014] Available URL:http://www.thenational.ae/business/industry-insights/finance/gulf-banks-look-for-acquisitions-in-egypt-and-turkey-to-grow\
• Central Intelligence Agency: World Factbook (2014) Turkey, available: https://www.cia.gov/library/publications/the-world-factbook/geos/tu.html
• Faruk et. al 2006, Globalization of Turkey’s Banking Sector, [Online] [Accessed November 22, 2014] Available URL: https://www.econbiz.de/Record/globalization-of-turkey-s-banking-sector-the-determinants-of-foreign-bank-penetration-in-turkey-aysan-ahmet-faruk/10005787043/Description#tabnav
• Hofstede‟s Cultural Dimensions 2014, Countries, [Online] [Accessed November 22, 2014] Available URL: http://geert-hofstede.com/united-kingdom.html
• PWC 2014, Banking in Luxembourg, [Online] [Accessed November 22, 2014] Available URL: http://www.pwc.lu/en/banking/docs/pwc-banking-luxembourg.pdf
• Petrou, A 2009, Foreign Market Entry Strategies in Retail Banking: Choosing an Entry Mode in a Landscape of Constraints, [Online] [Accessed November 22, 2014] Available URL: http://ac.els-cdn.com.ezproxy.uow.edu.au/S0024630109000843/1-s2.0-S0024630109000843-main.pdf?_tid=8aba22a6-7726-11e4-98c8-00000aacb35d&acdnat=1417196994_8189d75b3ad0d6fb027f4f091698b9e1

Top 5:

Kazakhstan, UAE, Turkey, Luxembourg, Hong Kong

MARK343

International Market Entry for UK 's Buckleys Bank