Lessons from the Strategy of Banco Santander: The Three-Step Process of Internationalisation in Retail Banking

44 Pages Posted: 4 Feb 2008

See all articles by Pedro Parada

Pedro Parada

ESADE Business School; Georgetown University - Department of Accounting and Business Law

Luisa Alemany

ESADE Business School

Marcel Planellas

ESADE Business School

Date Written: October 2007

Abstract

How do local services internationalise? Executives in retail banking face the challenge of internationalising a service which is local in nature. This research proposes a new model that shows some basic similarities with previous conceptual models. However, it incorporates the uniqueness of service industries where entry into new markets usually starts with foreign direct investment. This article analyses in depth the successful internationalisation of a retail bank, Banco Santander, from 1985 to 2005, extending traditional internationalisation models to a service industry. The methodology consists of longitudinal data and qualitative methods.

The experience of Banco Santander, the leading bank in Spain, the Euro-zone and Latin America, shows an internationalisation process based on three steps. The first of these is to develop capabilities in the home market. The second step is to create options for leveraging capabilities in new international markets, either through acquisition of a minor player or through strategic alliances with established local companies. The analysis shows that at this step, market selection is based on cultural proximity, geographic focus and deregulation or increased competition. Finally, the third step consists of acquiring a leading local competitor and a quick international roll-out followed by implementation of integrated capabilities.

Keywords: Internationalisation, Retail Banking, Banco Santander

JEL Classification: F21, F23, G21

Suggested Citation

Parada, Pedro and Alemany, Luisa and Planellas, Marcel, Lessons from the Strategy of Banco Santander: The Three-Step Process of Internationalisation in Retail Banking (October 2007). Available at SSRN: https://ssrn.com/abstract=1089108 or http://dx.doi.org/10.2139/ssrn.1089108

Pedro Parada (Contact Author)

ESADE Business School ( email )

Av. de Pedralbes, 60-62
Barcelona, 08034
Spain
34932806162 (Phone)
34932048105 (Fax)

Georgetown University - Department of Accounting and Business Law

McDonough School of Business
Washington, DC 20057
United States

Luisa Alemany

ESADE Business School ( email )

Av. de Pedralbes, 60-62
Barcelona, 08034
Spain

Marcel Planellas

ESADE Business School ( email )

Av. de Pedralbes, 60-62
Barcelona, 08034
Spain

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