New Forms Of Entry.docx

About Mergers and Acquisitions (Takeover) in Banking Sector Mergers and acquisitions in banking sector have become familiar in the majority of all the countries in the world. A large number of international and domestic banks all over the world are engaged in merger and acquisition activities. One of the principal objectives behind the mergers and acquisitions in the banking sector is to reap the benefits of economies of scale. With the help of mergers and acquisitions in the banking sector, the banks can achieve significant growth in their operations and minimize their expenses to a considerable extent. Another important advantage behind this kind of merger is that in this process, competition is reduced because merger eliminates competitors from the banking industry. Through mergers and acquisitions in the banking sector, the banks look for strategic benefits in the banking sector. They also try to enhance their customer base. In the context of mergers and acquisitions in the banking sector, it can be reckoned that size does matter and growth in size can be achieved through mergers and acquisitions quite easily. Growth achieved by taking assistance of the mergers and acquisitions in the banking sector may be described as inorganic growth. Both government banks and private sector banks are adopting policies for mergers and acquisitions. Mergers and acquisitions in the banking sector have the capacity to ensure efficiency, profitability and synergy. They also help to form and grow shareholder value.

One example of Bank merger in Mauritius is MPCB & NCB and an example of Takeover is Barclays Bank PLC and BNPI (Banque Nationale de Paris Intercontinentale). About Joint venture (strategic alliances) in Banking Sector A Joint Venture may be defined as any arrangement whereby two or more parties’ co-operation order to run a business or to achieve a specific objective. This co-operation may take various forms, such as equity-based or contractual JVs. It may be on a long term basis involving the running of a business in perpetuity or on a limited basis involving the realization of a particular project. It may involve an entirely new business, or an existing business that is expected to significantly benefit from the introduction of the new participant. A JV is therefore, a highly flexible concept. The nature of any particular JV will depend to a great extent on its own underlying facts and characteristics and on the resources and wishes of the involved parties. Overall, a JV may be summarized as a symbiotic business alliance between two or more companies whereby the complimentary resources of the partners are mutually shared and put to use. It is an effective business strategy for enhancing marketing, positioning and client acquisition which has stood the test of time. The alliance can be a formal contractual agreement or an informal understanding between the parties. Banks may benefit from joint venture in terms of accounting and operating performances. One example of Joint venture of Bank in Mauritius is Bank One Limited acquired in 2007 by a joint venture between the local group CIEL Investment Limited and the Kenyan group Investment & Mortgages Bank Ltd.

About Franchise in Banking Sector Established in 1973, SBM is an example of Franchise. Franchising is a known form of network cooperation. It has been broadly described in terms of the relationship between the franchisee and the franchisor. These relationships are considered as standard not only between the franchisor and franchisee but also as a foundations of network operating in concerned sectors.