Chapter 4: Case Study – Standard Chartered Bank
In order to grok why Standard Chartered Bank acquired Hsinchu international commercial bank ( Hibank ) ; hence, this instance would foremost analyse external and internal factors.
4.1 External Audited accounts
Palmer and Hartley ( 2006, p.3 ) both reference that ‘some elements may look rather inconsequential today, but may however hold possible to critically impact a concern organisation in future old ages. The trial of a good concern leader is to be able to read the environment and to understand non merely how concern systems and their environments work today, but besides how they will germinate in the hereafter ‘ .
Furthermore, it could be helpful for companies to understand chances, menaces, tendency and besides the pick of scheme by agencies of environmental analysis. By and large talking, external audits would consist environmental, market, client and rival analyses.
4.1.1 Environmental Analysis
This instance would follow PESTEL theoretical account, which could split macro-environmental factors into 6 dimensions: Political, Economic, Social, Technological, Environmental and Legal factors.
- Political factors
- First & A ; Second Financial Reforms
- World Trade Organization
In order to take part in WTO, Taiwan would foremost necessitate to catch the tendency of finance internationalisation and liberalisation ; as a consequence, Taiwan authorities developed the first and 2nd fiscal reforms, for illustration, to modify the Torahs or loosen the comparative limitations. The Legislative Yuan passed ‘Financial Holding Company Act ‘ in 2001, so that this act could empower to set up fiscal keeping companies and besides permit fiscal establishments to implement M & A ; A. ( 2008 Policy Report, 2009 ) As for fiscal reforms, it would be important good for the development of fiscal establishments. Harmonizing to the result of fiscal reforms, it could be clearly found that fiscal service ‘s portion of GDP had significantly climbed to 10 % in 2007, compared to 6 % in 1982 ; furthermore, it besides had efficaciously decreased non-performing loan ( NPL ) ratio form 7.48 % in 2001 to 1.84 % in 2007.
Interest rate liberalisation:Prior to 1989,
bank involvement rates were decided by the
authorities. The execution of involvement
rate liberalisation in 1989 greatly enhanced
the efficiency of fund use.
Foreign exchange liberalisation:In 1978, the
foreign exchange rate system was changed
to the drifting exchange rate system ; and in
1989, the cardinal foreign exchange rate system
centered on the U.S. dollar was abolished and
the foreign exchange rate was decided by
market demand and supply.
On the other manus, after Taiwan fall ining WTO in 2002, Taiwan authorities would non merely promote local fiscal establishments to come in international markets but besides welcome foreign Bankss to put in domestic fiscal market. At the same clip, Taiwan would actively take part in international fiscal organisations and activities ; for illustration, to go to one-year conference of International Association of Insurance Supervisor ( IAIS ) .
In add-on, authorities would present by phase unfastened service-sector markets including, fiscal, insurance, securities and hereafters, and besides continuously loosen the trade restrictions, such as to take down duties or to extinguish the domestic-film subsidies levied on foreign movies. ( Council for Economic Planning and Development, 2002 )
Although, Taiwan authorities continues to give to finance internationalisation and liberalisation, there are still some authorities ‘s intercessions in fiscal and economic facets. For illustration, in Taiwan stock market, there are some restrictions in the monetary value fluctuation of stocks ; more specifically, the monetary value fluctuation of each portion per trade twenty-four hours could non lift or fall over 7 % of portion monetary value. Besides,
Economic factors, which might to a great extent impact on concern operations, would be inclusive of economic growing, exchange rate, involvement rate, rising prices rate and so on.
- Economic Growth
- Foreign Direct Investment
As for economic growing, since 1980s Taiwan authorities carried out policies sing denationalization of state-owned endeavors and liberalisation of finance, such as to loosen controls and protection in the economic system. During this period Taiwan economic growing rate was up to 8.2 % per twelvemonth. ( see appendix )
After 2000, planetary economic growing faced many challenges, such as the impact of 911 terrorist onslaughts, the U.S. fiscal crisis and SARS epidemic, and such uninterrupted negative influences besides leaded Taiwan to accomplish an mean economic growing rate of 3.8 % . However, Taiwan, puting a record of the universe ‘s fastest economic growing in modern history, achieved an mean one-year economic growing rate of 7.9 % between 1952 and 2007. ( Council for Economic Planning and Development, 2008 )
When it comes to foreign direct investing ( FDI ) , it might play a critical function in the economic development in Taiwan ‘s modern history. FDI contributed to the transportation of engineering and betterment of industrial fight. Harmonizing to the official papers published by Council for Economic Planning and Development ( 2008 ) , inward FDI decreased from US $ 4.11 billion in 2001 to US $ 0.45 billion in 2003 due to the economic bubble of the cyberspace.
However, with the quickly promotion of Taiwan ‘s R & A ; D capacities, many top-tier multinational corporations ( TNCs ) , such as Intel and IBM, would set up R & A ; D centres in Taiwan. Thereby, inward FDI had a important rise at US $ 7.42 billion in 2006 ; in fact, inward FDI in 2006 was 3.57 times than 2005. In 2007, owing to the increasing figure of cross-border M & A ; A activities, inward FDI climbed to a extremum of US $ 7.77 billion.
In add-on, the Asia fiscal storm of 1997 to a great extent damaged Taiwan fiscal system, so that the non-performing loan ( NPL ) ratio within autochthonal Bankss rose to a historic high of about 7.5 % in 2001.
From the location position, Taiwan, a natural gateway of East Asia, is located in the strategically geographical place, in the center of a concatenation of islands covering from Japan to Philippines. Besides, Taiwan is near to the sou’-east seashore of Mainland China separated from Taiwan Strait. Therefore, it could be good for constitution of fiscal Centres in Taiwan due to the advantage of geographical location.
Under the force per unit area of finance internationalisation and liberalisation, Taiwan authorities would continuously amend the relevant jurisprudence or limitations within the fiscal service industry.
The Banking Act of Republic China, amended in 1989, would allow the constitution of new Bankss, so that the sum of Bankss in Taiwan had a dramatic addition from 24 in 1990 to 53 in 2000, and so declined to 39 in 2007 due to the tendency of M & A ; A within banking. Furthermore, late the Legislative Yuan besides continues to modify the Banking Act, so that it could speed up finance liberalisation. The Financial Holding Company Act, legislated in 2001, would let fiscal establishments to implement M & A ; A activities ; as a effect, it could work out the job of over-banking, ease the industry integrating and heighten the synergism within banking.
4.1.2 Market Analysis
4.1.3 Customer Analysis
Without the impression of a market section it would be hard to understand the overall client analysis. A market section is referred to as the construct that one class of clients with the same needs is different from demands in other portion of the market. ( Johnson, Scholes & A ; Whittington, 2008 ) Customer demands could be the index of market cleavage.
4.1.4 Competitor Analysis
To place its rivals is cardinal factor in prolonging competitory advantage.
