Chinese bank's potential to set up a new market in UK Essay

Chinese bank's potential to set up a new market in UK - Essay Example This paper will perform a feasibility study to evaluate a Chinese bank’s potential to set up a new market outside the country. Introduction Bank is one of the most common forms of financial services in an economy. The major function of a bank is to receive deposits from people and to lend money to potential customers. In every country, there is a central bank to manage the state’s currency rate, money supply, and interest rates. Economists unanimously propose that strength of the banking sector is a direct determinant of a country’s economic feasibility and sustainability. In order to attain greater level of operational efficiency and to sustain their operations, banks need to attract huge amounts of deposits. Although lending is a potential way to improve the profitability of banking operations, careless and excess lending would challenge the long term sustainability of banks. Thoughtless mortgage lending led to a series of bank failures in the United States ove r the last decade. Since then, banks all over the world have been giving increased focus to the repayability of loans granted. Many well established banks consider international operation as an effective strategy to spread risk elements and to achieve greater future certainty. New market in United Kingdom The feasibility study will be about setting a new market for the Chinese bank in United Kingdom. Evidently, UK is one of the most economically rich countries in the world and hence there is a greater scope for banking business in the UK market. In addition, UK stands well ahead of other developed countries in terms of industrial operations. Furthermore, the country is one of the strongest members in the EU. Hence, at the initial look it seems that UK is a potential market for the Chinese bank to promote its overseas operation. PESTLE analysis Political factors In the United Kingdom, the government exerts increased control over the banking industry blaming that thoughtless interfere nces of politicians caused a downturn in banking sector in the country recently. The government is likely to introduce stricter regulations in the near future so as to reduce the power of the banking institutions. Despite such regulations, increased political interferences still affect the flow of UK banking sector. According to PwC’s UK banking leader John Hitchins, growing political interferences coupled with stricter regulations have taken the banking sector’s future out of its control (Moore 2010). Economic factors While analyzing the economic landscape, it is clear that UK’s economic growth rate is lagging behind many other developed countries since the global financial crisis 2008-09. It must be particularly noted that the UK banks have significantly reduced the volume of lending over the last few years in response to a number of bank failures in the last decade. In 2011, four leading banks in UK including Royal Bank of Scotland, Lloyds Banking Group, HSBC , and Barclays restricted their property lending by a combined total of ?17.2 billion. Even though the Bank of England had announced an attractive plan to foster bank loans to medium sized businesses and home buyers, UK banks still hesitate to sanction property loans. Undoubtedly, this situation can be very helpful for the Chinese bank to set up its new market in UK. In addition, reports indicate that UK economy is

Brand management, Managing price discounting and its possible impact Assignment

Brand management, Managing price discounting and its possible impact on Brand equity - Assignment Example 11 Kotler, P & Caslione, J.A. (2009). Chaotics: the business of managing and marketing in the age of turbulence. AMACOM Div American Mgmt Assn. 11 Saxena, R. (2005). Marketing Management. Tata McGraw-Hill Education. 11 Schultz, D.E. et.al. (1998). Sales promotion essentials: the 10 basic sales promotion techniques-- and how to use them. McGraw-Hill Professional. 11 Introduction Price promotions are also known as price discounting. Most companies adjust the list price of the products and allow discounts to get early payments, purchase at a high volume and off season buying. Price discounting has become the mode of operation for almost all the companies. Some of the products tend to be always on sale. Companies having overcapacity of products gives more discounts. The manufacturer should stop the discounting rate at which they offer to the retailers. This practice may results in losing the long term profits. Kevin Clancy had found that about 15% to 35% of the buyers are price sensitive . People with higher level of income are willing to pay more for better products, quality customer service and for the brand name. Thus this can prove to be harmful for strong and distinctive brands. On the other hand price discounting can also prove to be useful only if the company gains a concession (Kotler, 1972, p.390). Brand equity is defined as the brands perception in the minds of the consumers. It is about how the employees, customers, the stakeholders and the consumers feel for a particular brand. Brand equity is driven by four factors such as perceived quality, brand awareness, brand association and brand loyalty (Knapp, 2000, p.2). Price discounting Price discounting is used to accomplish different goals. One of the primary reasons for price discounting is to dispose of the remaining inventory from the previous seasons and stocking in with new merchandise in the stores and the warehouse. This practice is usually preferred by those companies who tend to change their select ions of merchandise. Another reason of price discounting is to encourage the consumers to visit the retail outlet. Such strategies are widely used by grocery stores, drug and discount stores where the consumer buys in a bulk. The use of price discounting is known as bait and switch. Price discounting is also done by retailers in order to create price discrimination between different consumers. This is a process which targets both the price sensitive and price insensitive consumers. The other set of consumers prefers buying when products are put up on sale rather than from competitive retailers. Sometimes retailers offers product at a discounting rate so that the company can have an upper hand from new competitors as well as from the existing ones (Schultz, et.al, 1998, p.188). Objectives for Price Discounting Pricing is one of the biggest pitfalls that a management deals during optimal economy. But pricing involves a lot of risk when the economy is not stable. Price discounting does work well to achieve the objectives of the company. A retailer prefers price discounting in order to meet their targets and objectives. Price discounting always involves risk, especially when it is not done correctly. It can hamper the business (Kotler & Caslione, 2009, p.58). Therefore there are certain objectives which are well suited for price discounting whereas other is not preferred. The objectives are set by the retailers, in order to achieve the set goals they offer