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We will be doing the Final Project on the business we put together for our major project, ABC Bank. We will be focusing on market entry into Hong Kong for the Final Project. I am attaching that project for your reference. Using materials drawn from the previous assignment, students will be divided into teams to conduct research based on the criteria established, and develop a comprehensive International Business plan proposal with cost analysis. Write an APA paper with a PowerPoint presentation outlining the main points. The presentation would be something that you would introduce to board members to influence them. Use the slides to highlight or augment the story your business plan is telling, don’t use to slides to tell the whole story. For the project, the project should include the following 2 areas:How will the mission and vision of the business compliment the expansion?Will this be a new department or division of existing market; or a new subsidiary?Company strengths, in terms of finances, project management, 2. Finally – Cost of entry, plan for expansion, 2-3 yr objectives for when venture will be cash-positive250-360 words per topic2 academic references per individualbiblical integration when relevant1 ppt slide per topicI will need these in both a Word Doc and a Power Point

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Running head: ABC BANK
ABC Bank: Russia and Hong Kong Digital Banking Market Analysis
John Hierspiel, Alec Light, Victor Duque, Hillary McGrath, Charity Wynn
BUSN 460
Regent University
ABC Bank is a United States based, brick and mortar financial institution with
entrepreneurial aspirations of expansion into the online banking market. ABC Bank has already
conducted negotiations with web developers and an online banking app and website have been
created. The online software is somewhat similar in style and function to many other companies
yet transcends the competition with cutting edge technology and design. ABC Bank understands
that “the recent trends show that most ‘brick and mortar’ banks are shifting from a ‘productcentric’ model to a ‘customer-centric’ model as they develop their new e-banking capabilities.
[…] With the popularity of PCs, [and] easy access […], banks increasingly use Internet as a
channel for receiving instructions and delivering their products and services to their customers”
and ABC is capitalizing on the new market opportunities (Singh & Malhotra, 2004, p. 1).
Specifically, ABC Bank is contemplating market breach in the nations of Russia and
Hong Kong. By offering online banking options to clients and markets in these respective
nations, ABC Bank can capitalize on the growing profit margins of the online banking industry.
“Disruptive innovators have challenged and upset the status quo, providing customers with
innovative, easy-to-access and easy-to-use financial solutions […]. With precisely targeted and
smartly constructed value propositions, new players have identified large growth opportunities
and profit pools” (Deluca, 2016, p. 51). ABC Bank will not fall victim to the moving times and is
thus innovating and expanding its market reach.
“Recent evidence suggests that an internet-based consumer banking strategy may be
effective, with reports of more profitable, loyal and committed consumers compared with
traditional banking consumers […], contemporary banks now regard the internet channel
as equally important to traditional channels of branches, automated teller machines
(ATM), telephone banking and call centres […]” (Lichtenstein & Williamson, 2006, p.
With the changing business climate, ABC Bank is prepared to change their traditional
company model and pursue online banking in Russia and Hong Kong. It is the recommendation
of this paper that ABC Bank move forward with plans to enter the previously stated markets.
Analysis has been completed that establishes the position. Multiple factors have contributed to
the conclusion including culture, politics, trade, and online banking climate. After analyzing the
economies and societies of both Hong Kong and Russia, a successful digital banking launch is
within grasp.
Peng (2017) advises that before entering into a foreign market, a firm should examine all
the formal and informal institutions and understand the “rules of the game” for the intended
country of expansion (p. 37). According to Global Edge (2019) Russia is a country located in
northern Eurasia and is the largest country in the world spanning 9 times zones with a population
of 144 million as of 2017. The official language of Russia is Russian (2019). Their business
culture is very similar to the United States in the sense of dress, punctuality, and etiquette (2019).
ABC firm shouldn’t have to change it negotiations tactics with Russian firms when discussing
the expansion of digital banking in Russia.
Next, ABC should look into whether or not Russia has the infrastructure to support a
digital banking platform. According to an article in Forbes (2018) the lack of legacy IT
infrastructure within banks in Russia has listed the nation in the top five leaders of digital
banking in Europe. Russia already has the infrastructure to support digital banking, however,
existing digital banking services in Russia aren’t doing well. The article went further to explain,
“As the capital became constrained, while the government consolidated the financial services
space, the competition dried up. The lack of competition and the capital markets implies that
there is no incentive to innovate as it simply won’t get rewarded via a valuation re-rating”
(Mavadiya, 2018). Still, the infrastructure is there to support ABC Bank’s digital banking
Finally, a review of politics and potential trade restrictions between the United States and
Russia reveals the two nations are technically allies in NATO, however, they have a rocky
relationship (Porter, 2018). The United States has had economic sanctions on Russia ever since
their invasion of Crimea in 2014 (Porter, 2018). These economic sanctions, however, only affect
certain individuals within Russia and Russia energy sector. ABC Bank’s digital banking platform
will not fall under these sanctions. Currently the United States is holding an investigation into
Russian interference in the US elections which has caused more turmoil between the two
countries politically (Porter, 2018). However, none of these issues should cause any noticeable
hurdles for expanding the digital platform in Russia.
Analysis of Hong Kong reveals that advances in financial technology have changed the
lives of residents immensely. Digital financial services have superseded cash payments,
checkbooks and online banking over the last few years, bolstering the online banking climate
(Larson, 2015). Alipay, China’s most popular digital payment service, has connections with 180
banks, VISA, Mastercard, and other financial institutions and offers services such as peer-to-peer
(P2P) transactions, savings, money market accounts, payments, and purchases (Cao & Niu, 2019,
p. 9) (2015). Larson (2015) continues, “These changes coincide with rising overall incomes in
China, and with the government’s desire to build a more consumer-based society.” Politically,
the government of Hong Kong has created a climate of financial services development with a,
“2018 budget pledged to allocate HK$500 million to the development of financial services over
the next five years, including fintech,” or financial technology (InvestHK, 2017). Further,
international entrepreneurship is facilitated by lack of barriers to foreign businesses, no
restrictions on capital flows, and no exchange controls (Hong Kong Financial Services, 2015).
Information communication and technology (ICT) infrastructure development in Hong
Kong is increasing, laying the groundwork necessary for the growing financial technology
industry shown in Exhibit 1. “Being an international financial hub complemented by a highly
developed ICT sector and an increasingly conducive startup ecosystem, Hong Kong’s Fintech
industry has witnessed significant growth in recent years” (HKTDC, 2018).
(Fintech News Hong Kong, 2017)
In consideration of international entrepreneurship in Hong Kong ABC Bank may look
beyond digital banking towards emerging virtual banking. Virtual banking, “offers retail
banking services online without physical branches, and [is] a key part of a push for Hong Kong
to move into a new era of smart banking” (Lai, 2018). The Guidelines on Authorization of
Virtual Banks released by the Hong Kong Monetary Authority (HKMA) include adequate capital
and liquidity, independent assessment report on technology risk, a physical presence in Hong
Kong, exit plan, IT platform, ability to start business immediately, and a minimum capital
requirement of HK$300 million (2018). An operation of this magnitude would require large
scale entry. Organizations entering the emerging virtual banking industry would establish
technological leadership and other first-mover advantages (Peng, 2017, p. 326). However,
institutions entering the digital banking industry in Hong Kong could experience late-mover
advantages, such as resolution of technological and market uncertainty (2017, p. 326).
A comprehensive model of foreign markets entries is imperative for the firm to excel in
the establishment of business in Hong Kong and Russia. In both countries, ABC Bank will need
to have a large-scale entry into the foreign markets. Establishing a wholly owned subsidiary
(WOS) would benefit the company with complete equity. Although the risk increases, it will
allow for management savviness which creates a competitive advantage to fight foreignness
(Peng, 2017, pp 333 & 336). By offering new idea and management superiority the bank will be
able to compete and obtain advantage over competitors that may be seeking to offer digital or
tech banking, especially in Hong Kong which is saturated in technological innovation (Ling,
2005, pp 513-15). Not only will ABC Bank’s application and technology have to be better or on
par with the rest of the financial industry but the bank’s deep pockets of institutional (core)
products and services along with management will have to be new and good (Khanna et al,
When taking all the data into account, ABC Bank’s decision might come down to the
politics within each state. Hong Kong’s market boasts reduced regulation and little to no
restrictions for foreign companies to establish their products or services, however, competition is
fierce. In Russia, ABC Bank’s desired market may not be saturated, but laws and restrictions are
heavy handed. The country is monopolized, and discrimination might affect the U.S. based
bank. It is our analysis and recommendation that ABC Bank’s fundamental entry strategy be
based on logic and marketing research but also in God. Proverbs 16:3 explains, “Commit to the
LORD whatever they do, and He will establish (their) plans” (NKJV). People should not take
on any new endeavor without praying about it and the bank should “trust in the Lord with all
(their) heart and lean not on (their) own understanding; in all (their) ways submit to Him, and He
will make (their) paths straight,” (Pro 3:5-6, NKJV).
One of the four strategies Hurduc & Nitu list for banking expansion overseas is to “look
for a new market strategy” and includes “trying to find a new niche on the international market”
(n. d.). Given that Hong Kong and Russia are modern civilizations in terms of technology and
banking industries, ABC must enter this space with the intent to surprise and invigorate the
existing markets. The recommendation is to position ABC Bank as a fresh, new way of banking
in the 21st century by offering ATM and mobile banking options exclusively. ABC Bank will
establish itself as the unofficial “bank of millennials” by demonstrated understanding of what
that demographic values most – time. Banking options will be convenient and provide the
flexibility these customers need with limited fees and expansive options. The marketing mix will
include a cool logo illustrating ABC Bank’s awareness and appreciation of cultural trends in both
The success of this model is reliant upon a sophisticated mobile application that is easy to
use and reliable. Considerable resources should be allocated for this purpose. Mobile banking
trends that must be incorporated include credit card reward redemption, access to credit score,
mobile deposit and transfer, option to disable lost or stolen cards, touch ID and facial recognition
capability, bill payment functionality, ATM location services, and a chat feature for banking
assistance (Karimi, 2018). Hong Kong & Russia’s ATM Banking customer is on-the-go and
typically only stopping at an ATM to perform transactions that are unavailable via mobile
application such as withdrawing and depositing cash. ATM’s therefore should be more simplistic
in comparison to the mobile app. Information and transaction options should be immediately
available to the user. Design focus should be on ease of navigation; customers should be able to
select their desired option with one click.
While both countries have established infrastructure that should make market entry
relatively uncomplicated, Hong Kong has firmly positioned itself as a global leader in finance
making it a more desirable location in comparison to Russia (Yurtoglu, 2018). Russia is
transitioning to a globally integrated market economy and the Bible says that we should
encourage and support those who are trying to better themselves (Matthew 5:14-16, English
Standard Version). Still, prudence is best when dealing in tumultuous waters and, for these
reasons, larger-scale entry is recommended for Hong Kong while entry to Russia, in the interest
of protecting venture capital, should start on a smaller scale.
Cia, Q & Niu, X. (2019). Integrating context-awareness and UTAUT to explain Alipay user
adoption. International Journal of Industrial Ergonomics 69 (2019) 9–13
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battle for the customer relationship. Journal of Digital Banking, 2(1), 51-57. Retrieved
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Hong Kong’s Unique Advantages (2017). InvestHK
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banking: An interpretive study in the Australian banking context. Journal of Electronic
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Ling, F. Y. Y., Ibbs, C. W., & Cuervo, J. C. (2005). Entry and business strategies used by
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Peng, M. W. (2017). Global Business 4th edition. Boston, MA: Cengage Learning
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