استراتژی های ورود بازار خارجی در بانکداری خرده فروشی: انتخاب حالت ورود در یک چشم انداز محدودیت

International expansion by retail banks can involve different modes of foreign entry, the most common being acquisitions, start-ups and joint ventures. But there is only limited consensus over which represents the best option, and banks choose the same or different modes when entering different countries. This article investigates the question of how managers make these choices by testing a mode selection model based on the perceptions of managers involved in 124 foreign market entries. The model considers their control and resource objectives, their willingness to trade off control for access local resources and the constraints on their entry: levels of local regulation, home/host country differences and entrants' resources. The results show that internationalizing banks choices of entry mode are influenced by managers' desire for control over their foreign ventures and by their local market resource requirements, as well as by foreign regulatory constraints and the differences between home and foreign markets - but not by entrant's size. Identifying the factors influencing banks' entry mode choices allows us to point out a number of key factors managers should take into account when planning their internationalization strategies.

Over the last decade there has been a significant increase in cross-border entries by retail banks, spurred by saturation in home markets and the relaxation of regulations in many host countries. As banks seek fast growth overseas, the most popular entry modes have been joint ventures and acquisitions. Thus, for instance, HSBC alone has concluded over ten retail banking acquisitions in the last decade, in both developed and emerging markets, in its efforts to diversify its revenue streams, resulting in the Asian contribution to its total revenue being reduced from almost 100% to approximately 40%. The choice of entry mode is an important decision for multinational banks (MNBs). Different modes can support different strategic objectives, but each also involves both committing and obtaining different levels of resources. A bank entering a foreign market will commit some home country resources (such as capital and managerial skills), while also seeking to access other resources locally which it cannot itself develop quickly - typically, distribution, local image, market know-how and customer base.1 Although retail banks' own resources are important issues in foreign entry (and closely linked to bank size), the primary focus of this study is entrants' needs to access local resources, as these are critical to the successful execution of their foreign market strategies. A further consideration is their desire for control: different entry modes offer different levels of control over the foreign unit. A bank undertaking a start-up in a foreign market will have control over its local unit and thus the flexibility to do what it wants, but scaling-up to achieve a viable size in the foreign market — even to cover specific market segments such as small and medium size enterprises (SMEs) — involves the time consuming process of building local resources from scratch. Alternatively, an acquisition can provide the MNB with instant access to local resources, but may require significant financial investment. A joint venture (JV) facilitates access to local resources via a partner, but control is shared, which increases the difficulties of managing the foreign venture. (Here bank joint ventures are defined to include both start-ups that are jointly owned by a local and foreign bank, as well as the situation where a foreign bank acquires a significant equity stake in a local bank.2). Making the wrong entry mode choice - for instance, over-investing in foreign market resources via an acquisition, or establishing a start-up that is unable to create an adequate presence to exploit local opportunities - can have serious consequences. Thus the Greek Alpha Bank's start-up entry into the Bulgarian market resulted in a local branch network that was significantly smaller than those of its rivals Euro Bank and National Bank of Greece, both of whom had acquired local banks. Entry mode choice is not necessarily straightforward, as a bank may pursue different routes in different foreign markets for different reasons, and there will often be constraints to foreign entry in the retail banking sector, which add to complexity of this problem. All this suggests it is important to try to understand which factors retail banking managers consider when selecting foreign entry modes: this attempt is the subject of this article's research. To illustrate the range of possible entry mode choices in retail banking, Table 1 lists Société Générale key foreign entries in the period 2001–2006. The bank employed all the equity-based entry modes available in entering geographic locations in Europe, Africa and Asia, and into different business areas such as finance, consumer and SME banking. Other MNBs have also utilized diverse entry modes: over the past five years Crédit Agricole of France, for example, acquired Emporiki Bank in Greece, opened a finance branch in New York and acquired a 19% stake in Spain's Bankinter; while over three years the National Bank of Greece purchased a minority acquisition of Finansbank in Turkey (46%, which it subsequently increased to a majority shareholding), acquired 100% of the Serbian Vojvodanska Bank and established a start-up venture offering investment products and services in Romania. Senior managers at each of these MNBs unanimously identified three important factors in their choice of entry mode: the extent and nature of host country regulation; the level of local resources required to get established in the target market; and the degree of familiarity with that market they already possessed.Research into entry mode selection has studied multiple firm, industry and country level factors affecting companies' routes to market,3 but, while many different industries have been examined, retail banking has received little attention.4 Furthermore, despite theoretical arguments about control and resource seeking motivations, empirical studies have not directly evaluated the effect of managerial motives on the choice of entry mode. This article's contribution to the literature, therefore, is twofold: 1) to propose and test a model of entry mode choice in retail banking and 2) to test managerial factors not directly evaluated in previous research - motives for control, for accessing local resources and for making trade-off decisions between these two. Given that entry mode choice is driven, to some extent, by industry or industry segment characteristics, readily available models developed for other settings may not apply (for example, international activity in transaction-based banking segments - such as investment or wholesale banking - is mostly arms-length). The object of this research is to explore what factors influence managers' choice of foreign entry modes in the retail banking sector, and to consider the possible constraints to their decisions. The study aims to explain why a bank (like Société Générale, above) does not pursue the same entry route consistently, as well as why bank managers are increasingly willing to forego full control to pursue joint ventures. To gain answers to assist decision makers, managers' motives and their perceptions relating to foreign entry mode selection are measured directly, rather than by using proxy variables derived from secondary data, which tend to be less successful at capturing such complex constructs. For the purpose of this article, retail banks are defined as institutions offering a range of financial services to individuals and small and medium sized enterprises (SMEs). These services include traditional loan and deposit accounts, transaction services, credit cards, insurance, and investment products such as certificates of deposit and mutual funds, although a cross-border entry by a foreign bank may be targeted on just a few such products, or on specific customer segments, such as SMEs or high net worth individuals. This definition thus excludes investment and wholesale banking services such as corporate finance, underwriting, securities issues and other services to large corporations. The article is organised as follows. The next section proposes a model of entry mode selection in retail banking, discussing each factor incorporated in the model and providing support for its influence on entry mode choice. The data collection methodology is then discussed, the model tested and my findings presented. The closing section discusses the results and outlines the implications for managers and researchers.

The study shows that, when there are no constraints to entry, start-ups and acquisitions are the preferred entry modes - the choice between them depending on the intensity of local resource requirements, with acquisition preferred when resource requirements are high. Findings suggest that three factors explain the choice of joint ventures: regulatory constraints, managers' willingness to forgo control to access local resources and differences between the host and home countries. Managers showed some evidence of being willing to trade-off control to access local resources, this occurring in about 20% of the foreign entries. As motivations for their entry mode choices, managers in general rated their desire for control higher than their need for local resources, and both those higher than host/home country differences, (see Table 5 in the Appendix), which may explain the not-so-frequent selection of joint ventures. How can managers benefit from these findings when making entry mode choices? The results suggest that managers making these choices should first establish their local resource requirements and assess the constraints to entry and the extent of their willingness to forgo control to access local resources if required. High levels of resource requirements would normally indicate acquisition as the desired entry route - however, the feasibility of this mode will depend on levels of regulatory controls and significant host/home country differences in specific cases. My findings suggest that, where constraints exist, managers choose joint ventures, indicating that this entry mode option may have the merit of allowing banks to bypass constraints such as learning about the host country environment, and in some cases can act as a precursor to an acquisition. But managers of multinationals (whether in banking or in other industries) face three challenges when following this route: how best to protect the parent company's interests, how to raise their equity holding to a majority, and how to negotiate successfully with host-country governments. MNBs selecting a joint venture to enter a foreign market pursue one of two approaches: joining forces with a local financial services firm to establish a new company from scratch, or buying a minority stake in an established local bank to establish a foothold in the foreign market. Start-up banking joint ventures are often established to offer services in specialised business areas such as fund management, insurance and private banking - for example, in India, HSBC has linked up with two state-owned banks, Canara Bank and Oriental Bank of Commerce, to create an insurance joint venture in which HSBC holds a 26% stake (the maximum allowed). In this arrangement MNBs disintegrate value chain activities so that the resource intensive distribution element is assigned to a local partner, which already has distribution channel reach, while the MNB concentrates on their product management know-how and building the infrastructure to benefit from economies of scale. Start-up joint ventures can involve high costs (associated with differing partner objectives), difficulties in disposing assets (there may be no readily available market) and vulnerability to government interference. The most difficult issue, however, is how to protect the multinational's interests in the foreign joint venture, since their initial contribution - technical know-how - will inevitably diminish in value as it becomes assimilated by their local partner. (This was the case where a fund management joint venture between a UK-based bank and a Turkish partner lasted only three years before the local institution decided to proceed alone.) Contractual agreements may not fully protect the multinational, and longer-term success may depend more on the characteristics of the relationship itself, in terms of trust-based relationships, fair returns to both partners, and close interaction of managers at both decision-making level and operations levels. MNBs making this choice should be realistic in factoring in a conservative life expectancy for the JV. MNBs pursuing minority acquisitions tend to follow incremental entry strategies in order to get to know the partner bank and the local environment: where the relationship works out well, the joint venture may lead to a majority acquisition. For example, following its acquisition of a minority stake in the Swiss Sarasin Bank in 2002, Rabobank took full control in 2006. Rabobank's management reported that the decision to increase its shareholding came after it had understood its partner's growth potential, and proved the two organisations could work together to create additional value for shareholders. This suggests strong, trust-based relationships with the target's management need to be established if minority holdings are to be successfully converted into acquisitions. However, management must also consider competitor actions, as this process can be upset by the plans of competing banks. Crédit Agricole's move to build-up a minority stake in Bankinter in Spain was unwelcome to Santander Central Hispano, a major player in the local market which also held a minority shareholding in Bankinter, and which saw Agricole's entry strategy as a threat to its own business ambitions. SCH's response was to try to block any potential acquisition bid from Crédit Agricole by getting permission to raise its own holding from 16% to 30%. Upgrading a JV to an acquisition is by no means straightforward and management needs to work towards this goal efficiently. In some developing countries where there are restrictions on shareholding levels, minority acquisitions of universal banks are nevertheless encouraged by governments keen to draw in foreign know-how and capital. Thus RBS led a consortium to take a 5.2% stake in Bank of China (BOC), and two years later used this relationship to introduce credit cards and private banking to the Chinese market, capturing opportunities otherwise inaccessible to them. This process helped them accumulate know-how about the Chinese market and, even though RBS has recently sold its stake in BOC, it still offers services to the Chinese market through an alliance with a local bank and a small branch network. Governments with excessive bargaining power are often inflexible, and negotiating multinationals should concentrate on trading off against those of their capabilities that are valued by the local government. For example, reputable MNBs should be able to satisfy the Chinese government's needs for capital, for imported know-how in key areas such as in credit risk management and for increasing the credibility of Chinese banks. In return, the multinational should be able to negotiate better terms in four important areas: board representation, involvement in operations, joint exploitation of new opportunities in the local market, and opportunities for future increases in shareholdings. As some of the factors I have examined are specific to retail banking, the suggested entry mode model may not be applicable to all industries. However managers in other Retail Financial Services (RFS) industries - such as insurance, fund management and brokerage - may regard the factors influencing entry choices in banking as also being relevant in their industries. First, RFS multinationals may also benefit significantly from internalisation, as there is potential for economies of scale in technical and high cost functions such as research in fund management and underwriting in insurance. The considerations noted earlier as to banks' needs for retaining control leading to them opting (in theory, at least) for acquisitions or start-ups as preferred entry options may also apply to the RFS sector. Secondly, foreign entries by RFS companies are subject to similar regulatory regimes, as local authorities are concerned about expatriation of funds and financial misappropriation via such routes as product miss-selling and money laundering. (For example, Indian regulators demand that insurance and fund management multinationals enter only through joint ventures controlled by local institutions.) Thirdly, lack of foreign market resources could also act as a barrier to growth, since (in the same way as banks) RFS multinationals require local brand and distribution network to win customers from established local players. For example, US-based Charles Schwab's start-up entry in the UK market lasted for only five years, and its failure to gain significant mass was attributed to its restricted sales network and lesser known brand. In general, managers involved in cross-border entries in the retail banking sector should consider the following points: ■ Managers facing constraints to an acquisition may choose a JV as an initial market entry mode - in order to bypass constraints and learn about the market - which they may subsequently turn to a fully-owned subsidiary; ■ Another motive for a JV is the search for opportunities in large developing markets where MNBs contribute product management know-how and the local partner provides access to distribution. However, MNB managers must be realistic in their calculations about the life expectancy of such ventures, since the local partner may choose to exit the JV once it has assimilated product knowledge; ■ Managers' choice of joint ventures, in entries where there are restrictions favouring this mode of entry, depends on two factors: 1) their willingness to trade-off control of the foreign venture for access to local resources and 2) significant host/home country differences in business and/pre legal environments, national culture or language; ■ There are no universally valid laws that help managers choose market entry modes across different industries. However, managers of RFS multinationals may also find this model useful, as the factors found to influence entry mode selection in retail banking - economies of scale and scope, restrictions in host countries and local resource requirements (brand, distribution and know-how) - may also be valid in their industries.