Country study (China) Case Example | Topics and Well Written Essays - 750 words

Country (China) - Case Study Example ..6 1. Executive Summary Victory State Bank is a banking organization located in the United States of America in New York. Having expanded considerably, the organization has decided to set up a new shop in China in order expand its market and attract new customers. Therefore, the report examines different factors that will have to be considered in order to establish the viability of the area. The report will also examine the specific details that will be considered while entering the country 2. Introduction A number of factors need to be examined by an organization when it decides to venture a new market. This will especially be when the organization is venturing anew country altogether. Unlike opening a shop in the same country, opening in a different country might require the organization to change some factors in its setting. In this case, factors that will be examined include the mode of entry, the human resources, and the marketing and distribution strategies. Generally, these a re factors that will affect the overall operation of the newly opened shop. 3. Recommendations on how to enter the country 3.0Mode of entry The mode of entry that should be applied is the exporting mode. Exporting the services to the China people will attract them much easier and quicker. In addition, this is a cheap mode of entry since it involves very few expenses and costs. Exporting mode of entry is usually known to attract customers easily because the products or services have been brought closer to the customers’ location and thus, customers can easily access the services or products (Sun,  H., & University of Sydney, 1996). Therefore, this is a method that will require fewer advertisements and promotions as compared to the importing method. However, the method will have a disadvantage of competition. Victory State Bank will have to face stiff competition from the banks that have already been established in China. 3.1 Human Resources Victory State Bank will have to em ploy more staff members that can converse in Chinese fluently (Bailey, 2007). These will help in improving the mode of communication with the new customers. The selected management for the new branch will also have to be made of persons that are fully conversant with the culture and the political environment of the country. Thus, they will know how to solve matters concerning licensing and establishment fees. The organization might also have to employ some people from its country of origin instead of employing all its employees from China (Sun,  H., & University of Sydney, 1996). This will enable the organization to create employment in the country thus, creating a positive image for itself. Therefore, the mode of staffing used will mainly be geocentric, because while some crucial services require employees from the home country, others will use employees from the new country. The payment will still be constant since cases of increases in payments might lead to increased expenses. However, the organization will have to ensure effective training of the employees in order to ensure quality services. 3.2 Marketing The target market of the organization will be mainly business entities dealing with large sums of money, because they demand banking services highly (Beckwith,  1997). However, the organization will also target private individuals that demand banking

Sources of Finance for SMEs in UK and US Essay Example | Topics and Well Written Essays - 1000 words

Sources of Finance for SMEs in UK and US - Essay Example Thus the sizes, related industry, year of operating and organizational forms are the most important factors that determine the finance sources for a SME (Rutherford, Oswald, n.p, 1999) and most of the SMEs get finance through their internal funds like the starting capital of the owner, loan arranged by the owner of SME and the retained earning. However along with these internal sources the SME get external debts from the financial institution also and this credit help the SMEs in financing their different business operations. The main sources of finance for the SMEs of UK are identified in the survey conducted by Federation of Small Businesses (FSB) in 2004. According to the figures provided by FSB, SMEs do use more then one source to finance their business. 50.8% of the SMEs in UK use the bank drafts to finance their business, 30. 6% used personal savings, 29.5% use bank loans, 28.5% use retained profits and 25.5% use credit cards debts to finance their business (Carter et al, p14, 2004). The report of FSB further disclosed that leasing and factoring are not commonly used by the SMEs for getting credits to finance the business. The new SMEs mostly depend on personal saving and credit cards whereas the older SMEs depend more on supplier's credit. On the other hand, the survey conducted by SmallBusinessFinances(SSBF)of America in 1998 discloses the main sources of credit for SMEs in United States. The report discloses that there are 80 percent of US SMEs that used to take some kind of credit from differen t sources. 34% of the SMEs in US get credit to finance their business from business credit cards, 46% use personal credit cards, and 28% use credit line whereas 21 percent use vehicle loans. Financial institutions are also important source of credit and there are 38% of the SMEs that use to get credit from commercial banks and 13.3% SMEs take loans from finance companies. The report shows that the smaller size firms have little access to the banks and financial institution as compared with developed and big SMEs (Watson, p35, 1993) The credit availability to SMEs for financing is surrounded by an important issue of lending technologies. There are five major lending technologies used by the financial institutions and banks to provide credit to SMEs for financing their business operation. In UK and US the SMEs get loans from different financial institutions through different lending technologies among them the relationship lending and transaction based lending are the most important types (Thorsten and Demirguc, p2931, 2006). The commercial banks in UK and US mostly find it more profitable to provide credits to the SMEs through relationship lending as they got shelter ageists price competition by using this lending technology. (Allen, Udell, p2931, 2006) however this trend is more common among the UK banks and the banks in US like to provide credit to SMEs through transaction based lending as they get high interest rates and there is poor risk rating for this type of credit lending. In UK when the SMEs failed to get credit from banks and other financial institu