Minsheng Bank: Penetrating The US Market Through Acquisition

Minsheng Bank: Penetrating The US Market Through Acquisition Description

Founded in 1996, China Minsheng Banking Corporation Limited ("Minsheng") was the first private commercial bank in China. By 2006, Minsheng had acquired almost US$130 billion in total assets and established almost 330 banking offices across the nation. The Banker magazine consistently praised Minsheng's development, ranking it number 310 in its top 1,000 business banks in the world in 2004, number 287 in 2005, and number 247 in 2006. In early March 2008, Minsheng obtained the green light from the China Banking Regulatory Commission to buy a 4.9% stake in US-based banking holding company, UCBH Holdings, Inc. ("UCBH") for US$95.7 million. The deal would eventually take Minsheng's stake in UCBH to 9.9%, totalling around US$200 million. The acquisition not only distinguished Minsheng as the first Chinese mainland institution to invest in a US bank, but was also viewed as a milestone for Chinese banks entering the US and international markets. On the flip side, UCBH would soon use this opportunity to make its own moves into China, leveraging its affiliation with Minsheng to totalingacquire other Chinese banks. This case examines the process of international expansion through acquisitions in the banking industry and the positioning of a growing bank in the global market, covering issues such as value creation, impact of government regulation and international barriers, the Chinese banking industry and its development, and the associated risks.

Case Description Minsheng Bank: Penetrating The US Market Through Acquisition

Strategic Managment Tools Used in Case Study Analysis of Minsheng Bank: Penetrating The US Market Through Acquisition

STEP 1. Problem Identification in Minsheng Bank: Penetrating The US Market Through Acquisition case study

STEP 2. External Environment Analysis - PESTEL / PEST / STEP Analysis of Minsheng Bank: Penetrating The US Market Through Acquisition case study

STEP 3. Industry Specific / Porter Five Forces Analysis of Minsheng Bank: Penetrating The US Market Through Acquisition case study

STEP 4. Evaluating Alternatives / SWOT Analysis of Minsheng Bank: Penetrating The US Market Through Acquisition case study

STEP 5. Porter Value Chain Analysis / VRIO / VRIN Analysis Minsheng Bank: Penetrating The US Market Through Acquisition case study

STEP 6. Recommendations Minsheng Bank: Penetrating The US Market Through Acquisition case study

STEP 7. Basis of Recommendations for Minsheng Bank: Penetrating The US Market Through Acquisition case study

Case Analysis of Minsheng Bank: Penetrating The US Market Through Acquisition

Minsheng Bank: Penetrating The US Market Through Acquisition is a Harvard Business (HBR) Case Study on Global Business , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. Minsheng Bank: Penetrating The US Market Through Acquisition is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. Minsheng Bank: Penetrating The US Market Through Acquisition case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. Minsheng Bank: Penetrating The US Market Through Acquisition will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.

Case Study Solutions Background Work

Minsheng Bank: Penetrating The US Market Through Acquisition case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Global Business, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of Minsheng Bank: Penetrating The US Market Through Acquisition, is to not only build a competitive position of the organization but also to sustain it over a period of time.

Strategic Management Tools Used in Case Study Solution

The Minsheng Bank: Penetrating The US Market Through Acquisition case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

Texas Business School Approach to Global Business Solutions

In the Texas Business School, Minsheng Bank: Penetrating The US Market Through Acquisition case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – Minsheng Bank: Penetrating The US Market Through Acquisition

Step 1 – Problem Identification of Minsheng Bank: Penetrating The US Market Through Acquisition - Harvard Business School Case Study

The first step to solve HBR Minsheng Bank: Penetrating The US Market Through Acquisition case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Minsheng Ucbh is facing right now. Even though the problem statement is essentially – “Global Business” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Minsheng Ucbh, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.

Step 2 – External Environment Analysis

Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the Minsheng Bank: Penetrating The US Market Through Acquisition.

The external environment analysis of Minsheng Bank: Penetrating The US Market Through Acquisition will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.

What is PESTEL Analysis? Briefly Explained

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Minsheng Bank: Penetrating The US Market Through Acquisition case study. PESTEL analysis of " Minsheng Bank: Penetrating The US Market Through Acquisition" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?

As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with Minsheng Bank: Penetrating The US Market Through Acquisition macro-environment and how it impacts the businesses of the firm.

How to do PESTEL Analysis for Minsheng Bank: Penetrating The US Market Through Acquisition

To do comprehensive PESTEL analysis of case study – Minsheng Bank: Penetrating The US Market Through Acquisition , we have researched numerous components under the six factors of PESTEL analysis.

Political Factors that Impact Minsheng Bank: Penetrating The US Market Through Acquisition

Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.

Policy Making Impact on Minsheng Bank: Penetrating The US Market Through Acquisition

Government policies have significant impact on the business environment of any country. The firm in “ Minsheng Bank: Penetrating The US Market Through Acquisition ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.

Data safety laws – The countries in which Minsheng Ucbh is operating, firms are required to store customer data within the premises of the country. Minsheng Ucbh needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.

Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. Minsheng Bank: Penetrating The US Market Through Acquisition has numerous instances where the competition regulations aspects can be scrutinized.

Import restrictions on products – Before entering the new market, Minsheng Ucbh in case study Minsheng Bank: Penetrating The US Market Through Acquisition" should look into the import restrictions that may be present in the prospective market.

Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Minsheng Ucbh in case study “ Minsheng Bank: Penetrating The US Market Through Acquisition ” should look into these export restrictions policies.

Foreign Direct Investment Policies – Government policies favors local companies over international policies, Minsheng Ucbh in case study “ Minsheng Bank: Penetrating The US Market Through Acquisition ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.

Taxation & Regulation Impact on Minsheng Bank: Penetrating The US Market Through Acquisition

Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.

Tariffs – Chekout how much tariffs the firm needs to pay in the “ Minsheng Bank: Penetrating The US Market Through Acquisition ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Minsheng Ucbh can compete against other competitors.

Government Scheme & Subsidies Impact on Minsheng Bank: Penetrating The US Market Through Acquisition

Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at Minsheng Bank: Penetrating The US Market Through Acquisition case study have to assess whether their business can benefit from such government assistance and subsidies.

Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.

Political System & Stability, and its Impact on Minsheng Bank: Penetrating The US Market Through Acquisition

Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.

Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.

Corruption level – Minsheng Ucbh needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.

Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.

Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.

Economic Factors that Impact Minsheng Bank: Penetrating The US Market Through Acquisition

Social Factors that Impact Minsheng Bank: Penetrating The US Market Through Acquisition

Technological Factors that Impact Minsheng Bank: Penetrating The US Market Through Acquisition

Environmental Factors that Impact Minsheng Bank: Penetrating The US Market Through Acquisition

Legal Factors that Impact Minsheng Bank: Penetrating The US Market Through Acquisition

Step 3 – Industry Specific Analysis

What is Porter Five Forces Analysis

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Minsheng Bank: Penetrating The US Market Through Acquisition case study. PESTEL analysis of " Minsheng Bank: Penetrating The US Market Through Acquisition" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

Step 4 – SWOT Analysis / Internal Environment Analysis

Step 5 – Porter Value Chain / VRIO / VRIN Analysis

Step 6 – Evaluating Alternatives & Recommendations

Step 7 – Basis for Recommendations

References :: Minsheng Bank: Penetrating The US Market Through Acquisition case study solution