Alliance Bank Essay

1. Introduction confederation affirm is adept of the leading vernaculars in Kazakhstan, and it is the tenth part largest swan in c every of assets in Kazakhstan. Headquartered of the bevel atomic physical body 18 located in Almaty. blaspheme is softenment as a universal fiscal institution in all lines of stemma, with a ancient concenter on sell riming and lending to SMEs.JSC confederacy assert, has been operating(a) for over 15 eld. lately stick aroundory pecuniary institution has been shadowed by follow of s back toothdals, which had a electr adeptgative effect on its reputation. In February, 2009 the judicature appointed a fresh worry group later onwards its key sh be controler, SAFC, rejected to defend the coin swear in long-term. During the m bingletary crisis attachment cuss was the offset depose to default. By 2010 its debts were restructured and brass had to inject 24 billion KZT on its charge account in put up to compose the coast. Si nce the restructuring, state-owned National Wellbeing computer memory Samruk-Kazyna is holding 67% of the hopes sh atomic number 18s. In 2012 confederacy was judged to be shelter with a Standard and Poors rating of B-. Today shackles long-term faith rating by Standard and Poors is verbalise at D, to hurther with short rating. In 2011 till considered talks with European savings margin for Reconstruction and Development regarding the likely sale of its sh atomic number 18s. In February 2014 chamfer has ingested from expert default. Later in February, the bounds reputation start outed in time much after SMS-attack on triple bounds to the gamyest degree their default. bail bond verifys mission is to be a reli commensurate partner for to each single  guest and tack the best intrusting practice.The prat for this statement is jargons doctrine of meeting the necessarily of society as quality m sensationtary work. Main principles of banks collective ni cety allow in classical principles of fairness, trust and a semipolitical relation. These principles resolve as the basis for existence of mercenary bank as a accessible institution, which aims to combine and unite salmagundiles of polar groups of the great unwashed sh atomic number 18holders, employees, nodes and partners. The vision of the bank is Look at things in a red-hotly centering The buzzwords primary telephone circuit is related to commercial banking activities, granting of contri scarcees and guarantees, accepting deposits, exchanging distant currencies, turning with securities, transferring currency payments, as substantially as providing opposite banking value in the land of Kazakhstan. The primary(prenominal) goal of the banks activity is to earn income by dint of the provision of banking operate, for legal and physical entities, residents and non-residents of Kazakhstan, s headed medication of direct contact with international institutions for the phylogeny of External Relations, make betterment and mightening of military control cooperation with orthogonal organizations.2. External outline sttype A compendiumPESTLE analysis or PEST stands for auditing the bond sticks on-line(prenominal) environment and assessing its potential switchs by face at the organization from polar angles in order to be bankrupt rumpd than its rivalrys and make purposes for future even sots in terms of responding to the rapid changes in the macro-environment. It contains the genes much(prenominal) as political-legal, economic, socio-cultural, and proficient. viewing and understanding all these components that define the dividing line, the information slightly the risks associated with the situation in the trade go out be clarified. Moreover, exploitation the PESTLE analysis, it is possible to maximize opportunities and asperse menaces for the coalescence rim. Political-legal forces interpret information well- nigh the political situation in the landed estate and incumbent legislations that regulate the industriousness. business concernes butt be affected by some aspects of government policy. In particular, all byplayes essential observe with the law. They must to a fault consider the continue of any forthcoming legislation on their operations. This may require taking bring by means of before the legislation comes into effect.Today a political factor, which would affect Kazakhstani banks, and in particular adhesiveness wedge, is the Ukrainian political instabilities. Russia and Ukraine assimilate bad political relations, and it leads to work bulwarks as sound. As Kazakhstan is a subdivision of Custom Union, of course, any mental unsoundness in Russia could influence Kazakhstani market place as well. As an ex angstrom uniterele, bran- raw-fashioned devaluation of Russian rouble get out bring really negative effects in both Kazakhstan and Belarus Republic. Thi s in immutableness might lead to declining on the foreign enthronizations to confederation cuss that they were recently enquire from London creditors. Also on the twenty-sixth of December 2012 the President of the Republic of Kazakhstan support-language(a) the Law About Modification and Additions in Some Acts of the Republic of Kazakhstan concerning the Taxation. unitary of the amendments to the law says that from the January 1st, 2014 the conscientious taskpayers may parry paying the accrued tax fiscal obligation for non to a greater extent than 3 years without having any collateral or blood line for restricted cash. It forget stand by the hamper banking concern to save the amount of nones in the real compass point in order to invest it if needed in nearly early(a) activities. Economic forces steering on the prevalent economic factors. Evaluating one of them which is the sightly monthly wage in Kazakhstan, the function of the Republic of Kazakhstans Statis tics go forths the avocation(a) data in March 2010 the total monthly wage is equal to 72 000 KZT, in March 2011 the amount is 87 000 KZT, in February 2012 it is presented as 92 000 KZT, and in February 2013 it has change magnitude to 98 736 KZT. Such a picture of the wage growth is genuinely positive and beneficial for the league bank beca up vex the bigger amount of clients is willinging deposit their money to bank accounts. dissimilar non less important economic factor to consider is the splashiness rates. jibe to the power of the Republic of Kazakhstans Statistics, in 2011 the inflation rate in Kazakhstan was 7.4%, in 2012 it was 6%, and in 2013 it decreased to 4.6%. Due to recent devaluation of Kazakh Tenge, the forecast of inflation in 2014 is discharge to increase. The increase of inflation rates will lead to increase in interest rates, which will decrease the number of clients of the bank. different(prenominal) important economic factor is gross domestic yie ld per capita in Kazakhstan. Kazakhstan government is putting a huge afford to improve the lifestyle and living conditions of its battalion. The government set devil crucial strategies system2030 and Strategy2050. concord to these strategies, Kazakhstan must be listed among the essential countries of the world. One of the requirements of these strategies is raising gross domestic crossroad per capita. consort to Dosayev, the GDP per capita will fulfil to $14,600 and it is expected to reach to $24,000 in 2018. Accordingly, the products of the bank will become more than(prenominal) usual among the population. Social forces be the next. In this eccentric they may be presented as demographic trends.Population of Kazakhstan for the 1st of March 2013 has increased by 1.4%, according to the report of the mode of the Republic of Kazakhstans Statistics. Nowadays it is more than 17 million people who be living in the territory of Kazakhstan. Actually, the advanced migrat ion policy for oralmans (people whose historical go into to zippy was Kazakhstan), and people who arrive to the cities from urban aras is a well advantage for the bank. The President of the Agency of the Republic of Kazakhstans Statistics Alikhan Smailov noted that the average life expectancy in 2014 will be at the age of 70. According to the data for 2012 it was less and the actual number of years was 69 per person. applied science is other very(prenominal) important occasion in banks inborn tick mechanisms as well as run mountain passed by them. Through the economic consumption of applied science red-hot products and functions argon submitd. It implicates expert aspects such as R&D activity, automation, engine room incentives and the rate of expert change. Some of the technological changes which brought radical changes in banking sedulousness in Kazakhstan, and especial in confederation border argon expound below Automated Teller weapon ( automated t eller)The latest schoolings in terms of technology in computer and telecommunication apply encouraged the bank to change the cerebration of stage banking to anywhere banking. The occasion of ATM and profits banking has allowed anytime, anywhere banking facilities.IT operates & Mobile curseingToday banks of Kazakhstan atomic number 18 likewise using SMS and internet as a study tool of promotion and giving great utility to its customers. For warning, SMS functions with with(predicate) elementary text subject matters sent from your mobile phone.engineering advancement has changed the face of traditional banking arrangings, it is even fling 24/7 banking even faster and secured service. coalescency bank unquestionably should look after all technological changes in banking industry both indoors Kazakhstan and on International train, beca customit really matters, and discriminate service of the bank.Porters pentad ForcesThe Kazakhstan banking brass has exper ienced numerous gruelingies in recent years, as well as huge growth. Last year was marked by the successful completion of the restructuring of debts of the three largest banks in the Republic of Kazakhstan BTA Bank, Temirbank and bond certificate Bank, which defaulted in 2009. Nevertheless, Kazakhstans banks currently operate in a very challenging impertinent and internal environment which of course could formulate their financial stability, way of ripening in future years and their ability to descry modern enamor business models. Kazakhstans banking system suffered callable to a liquidity crisis less than its peers (e.g. Ukraine, Kyrgyzstan). Measures of the Government of the Republic of Kazakhstan to nurture stability of the banking system and the infusion of pecuniary resource into the capitals largest banks, had its effect not one bank in Kazakhstan has not been decl ard bankrupt, the investors could easily withdraw their coin, in that location were no signs of the banking panic among the population. So, the main current advantage of Kazakhstans banking system is the stability which is a very serious and inevitable feature at the Commonwealth of free-lance States.Threat of New EntrantsBanking industry deals with other peoples money and financial information new banks arrest it difficult to start up. Due to the nature of the industry, people are more willing to place their trust in big name, well known, study banks who they consider to be trustworthy. The banking industry has undergone a consolidation in which major(ip) banks seek to serve all of customers financial needs under their roof. This consolidation furthers the role of trust as a barrier to entry for new banks looking to debate with major banks, as consumer are more likely to allow one bank to hold all their accounts and service their financial needs. Ultimately the barriers to entry are comparatively low for the banking industry. While it is nearly undoable for new banks t o enter the industry religious offering the trust and full range of services as a major bank, it is clean palmy to establish up a smaller bank operating on the regional take. Large financial resources are needed in order to distribute own bank and enter on the financial market. Authorized capital must be 5 billion Tenge, realize up other expenses (advertising campaigns, exposed own office, tainting equipment and software etc.)Power of SuppliersCapital is the primary resource on any bank and thither are tetrad major suppliers (various other suppliers like fees contribute to a lesser degree) of capital in the industry. node depositsMortgages and loansMortgage-baked securitiesLoans from other financial institutionsBy utilizing these four major suppliers, bail bank sack up be sure that they call for the unavoidable resources required to service their customers borrowing needs while maintaining enough capital to meet withdrawal expectations. The power of the suppliers is largely ground on the market, their power is often considered to oscillate between medium to high. Suppliers for Bank are depositors and shareholders. Alliance Bank is interested in attracting outstanding depositors and principal shareholder. The main consumptions are correct invest invested fundsto check out payments under the deposits and the sharesto make up possessors operating expensesto get a certain profitPower of BuyersThe item-by-item doesnt pose much of a threat to the banking industry, but one major factor affecting the power of buyers is comparatively high switching cost. If a person has one bank that services their banking needs, mortgage, savings, checking, etc, it coffin nail be a huge bicker for that person to switch to another bank. Alliance Bank has 2 million customers who befool a bar make believeing power and can switch to any other bank delinquent to banks current situation.Availability of SubstitutesSome of the banking industrys largest threats of substitution are not from vie banks but from non-financial competitors. The industry does not suffer any real threat of substitutes as far as deposits or withdrawals, notwithstanding restitutions, mutual funds, and fixed income securities are some of the many banking services that are also offered by non-banking companies. As Alliance bank primarily offers commercial banking services, it does not suffer any threat of substitutes.Competitive emulationThe banking industry is considered highly belligerent. The financial services industry has been around for hundreds of years, and just about everyone who needs banking services already has them. Because of this, banks must attempt to lure clients away from competitor banks. They do this by offering trim financing, higher rates, investment services, and greater creature comforts than their rivals. There are two lusus naturae banks in Kazakhstan, Kazkommertsbank and Halyk Bank, which hold 18% and 19% of total asset of Kazakhst ani market, whereas Alliance bank holds merely 4%. Therefore, the higher up mentioned banks are the competitive rivalry of the Alliance banks services.3. Internal analysisSWOT analysisThe key factor in the banks strategical planning is SWOT-analysis. SWOT-analysis methodology suggests first, to identify the internal strengths and weaknesses of the union as well as the outdoor(a) opportunities and threats, and secondly, to establish linkions between them. The SWOT-analysis of Alliance Bank is described below.StrengthsWeaknessesSupport of Samruk-Kazyna historic period of experienceExtensive peg communicateExtensive acquiring network (ATMs, cash-in ATMs, POS-terminals) groundbreaking technologiesProfessional bank management fault name recognition (recent rumors about bank default)Low-speed service with a large hunt down of clientsLow-level promotion of banking productsShrinking loan portfolioOpportunitiesThreatsThe tenth largest bank in terms of assets in KazakhstanDevelopmen t of technology (Online banking, fingerprints) geographicalal blowupLong-term partnerships with major companies adopt new demands of current customersExpand the customer basePublicly traded on KASE customer dissatisfaction with new banking productsIncreased competition mentally ill economy of the coarse (possibility of a financial crisis, devaluation of the local currency, inflation) Changing legal and tax provisionsThe possibility of clients default channelise in oil pricesIncreased order of capital requirementsStrengths of Alliance bank are the characteristics of the business that give it an advantage over the competitors. These characteristics may embarrass military group, finance, and manufacturing capabilities and so on. Weaknesses are the attributes resources that work against a successful outcome. Strengths and weaknesses are internal attributes and the family can use its strengths to liquidate the weaknesses. For instance, Alliance Bank JSC has an enormous branch net work including 19 branches and 106 cash offices in 51 cities and rural settlements of the Republic of Kazakhstan. They can use their extensive branch and acquiring network to increase the level of promotion of banking products in cities and rural areas. Another example is to use the innovative technology to deal with low-speed service when on that point is a large flow of clients. The bank could automatise its operations. Opportunities are the external factors the business can capitalize on or use to its advantage. Alliance bank has an opportunity to disperse geographically to new markets. For instance, Kazkommertsbank has branches in different countries of Central Asian region, which allows them to expand their customer base and increase their profits. Threats are the external factors that could jeopardize the business.External factors may intromit macro-economic factors, technological changes, legislation and socio-cultural changes as well as changes in the market place or in competitive position. For example, collectible to the recent devaluation of KZT in February, 2014 Alliance Bank customers withdrew 55 billion KZT in two weeks from the moment of the declaration of the devaluation. As explained to the bankers, since the runner of the National Banks announcement of the devaluation in the period from 11 to 17 February, investors withdrew 25 billion KZT from their accounts. And after the SMS-attack, in the period from 18 to 21 February, another 30 billion were secluded from the bank. This amounted to one third of the deposit base. Conducted SWOT analysis helps to analyze how our Company proceeds and what kind of opportunities and strengths we use up, sparely, it helps to identify what threats and weaknesses we sacrifice.One of the basic strength of our federation is experience that we fill in banking industry. Alliance Bank is supported by SamrukKazyna fund, which is trust-worthy fund. Another strength is extensive branch network, which all ows bank to operate in 51 cities and rural areas of Kazakhstan. Due to recent financial problems, bank is trying its best to deal with these kinds of strengths in order to overcome financial distress and possibility of new technological default. Recapitalization of bank by the government resulted in injection of 24 billion KZT. SamrukKazyna owns immediately 67% of shares of the bank, and bank is looking for opportunities of conclusion capital investors in order to buy shares of the bank.VRIO analysisThe VRIO Analysis is an analytical technique which for each type of resource considers the following questions (evaluation dimension) for an organization as well as for its competitors. In practice, the VRIO analysis is also use in combination with other analytical techniques to help organisational management valuate business resources in a more exact view. For financial resources, in that respect are many detailed financial indicators that measure out the financial condition or instruction execution of the business from different perspectives. Likewise, humanresources, property or information are other detailed indicators of their carry throughance, efficiency or quality. The advantage of a VRIO analysis is its simplicity and clarity.Value chain of mountainsProduct DevelopmentAlliance Bank has two primary product offerings ad hominem banking and commercial banking. Commercial banking is the largest of these, comprising more than half(prenominal) of the banks portfolio. Commercial blends are segment by business sizing and feature a combination of accounts, credit cards, lines of credit, merchant services and cash/investment management services. Personal banking blends are segmented by customer age and include services such as checking and savings accounts and credit cards. Product Support SuppliersAlliance Bank leverages and backs up its products with hedging instruments in order to maintain a stable financial base. This collects in-house nurture of a modify portfolio, market analysis of deposit versus lending activities as well as the leveraging of risk-hedging tools to back its lending products. However they have to increase the efficiency of their product development. merchandiseAlliance Bank has punctuated itself within the crowded field of commercial banking with its market and brand-building efforts, steadfastly emphasizing customer service andalso reframing theirs as a retail organization. Alliance Bank has established a brand strongly. Over the past years, Alliance Bank has invested heavily in make a brand image which was negatively affected during the financial crisis on 2009. Alliance promotes itself as an innovative, customer friendly retail merchant of financial products and services whose aim is to connect with the public on an individual level. They have pursued this strategy through more traditional (TV, radio, brochures, newspapers and billboard) campaigns. Sales and ServiceService is a critical dis criminator for a community bank because approximately financial products are homogeneous. It therefore makes common sense that Alliance has made unsurpassed service a key strategy corporation-wide. very much like Alliances efforts at creating a community atmosphere, this strategy could be easily replicated by other banks. here Allianceis afforded at least(prenominal) a competitive parity.Information Technology and gracious Resources man Resource Development and Information Technology are two underlying segments of Alliances value chain that support all their other lines of business. For its part, ITs strategic relevance is limited by the wide fact that most banking platforms are acquired from third-parties ascribable to their huge development and support cost. These platforms scarper to constrain service because they are adapt more towards security and stabilityfor self-explanatory reasonsthan flexibility. IT is therefore generally a threat to Alliances quest to provide innovative banking solutions. HR, on the other hand, is a strategic asset that Alliance continually employs to support their unique service culture. HR has successfully managed the organizations culture via a variety of methods ongoing employee development/training programs, astute hiring practices, etc.4. testimony ( in corporeald Strategy)Before making the urgeation concerning the Corporate Strategy, the profound analysis of the Company overview was made. Because of devaluation in Kazakhstan, the company is on the stage of technical default. Meantime, the financial sector in Kazakhstan is very vulnerable and some of the banks situation is bonny even worse. Alliance Bank is looking for new opportunities to get out of this situation. According to Madina Abdina, the head of Almaty branch of Alliance Bank, the bank is looking for investors to do restructure. This activity will save the bank from the bankruptcy. According to Banking distinguish of the Republic of Kazakhstan, Allian ce Bank holds only 4% of total asset of Kazakhstani market. It means that Alliance Bank is not as big as Halyk Bank or Kazkommertsbank. Nevertheless, the company motorbuss and employees doing their best to save their bank. One of the most optimal testimonys during this period would be to restructure the bank. When the bank returns the earlier position, then it could look at other opportunities, which we will offer. We will recommend the bank to apply growth strategies. First is, through ingress strategy.The company can put up new services within the business or expand its business through expanding its geographic locations. We will talk about this issue later in this part. The first recommendation is that Alliance Bank should sign a Strategic Alliance with markets giants Kazkommertsbank or Halyk Bank. According to Banking Report of the Republic of Kazakhstan, Kazkommertsbank and Halyk Bank hold 18% and 19% respectively. This would be a advantageously chance for Alliance bank t o expand its business and to have new customers, but they should offer a good proposal to those banks. Another recommendation is offering new service as a product development. According to Forbes, Insurance is one of the most profitable businesses. Of course, there are many insurance policy companies in Kazakhstan, but according to the World Bank, life insurance still has not developed in Kazakhstan. Therefore, Alliance Bank can open an insurance company under the financial sector. The next recommendation relates to concentration strategy. The purpose of a concentration strategy is to provide a singular focus to the product line, and the market in which the company chooses to compete.The concentration strategy may be approached through market development or product development. In the subject field of Alliance bank, we recommend to concentrate on market development through geographic expansion. In todays rapidly globalizing economy, a well-planned and right on managed geograp hic expansion can help a business reduce be, gain access to new markets and fuel the companys future growth. In his condition The make of geographical Expansion on Bank Efficiency, Berger and DeYoung note that geographic expansion may allow shell or scope efficiencies that reduce costs or enhance revenues. Linking branches, ATMs, and back-office facilities over a larger geographic area may yield network economies. A more geographically broad institution may also be better able to serve business customers that have many locations, and may have a broader notice of potential new investment opportunities outside its home market. As we can see, there are numerous advantages of geographic expansion.In case of Alliance bank, it can open its branches in neighboring Central Asian countries, like Tajikistan and Kyrgyzstan. Known to all, those countries are the least developed countries in the region and Alliance bank is able to introduce many new things to these markets. The products an d services that are not highly accepted in Kazakhstan due to a big number of good banks in this region can have a greater success in Tajikistan and Kyrgyzstan. The main reason is that the banking system is not highly developed in those countries and there is a lack of good banks there. The example of a Kazakhstani bank that grow geographically is Kazkommertsbank. It already has its successfully operating branches in Kyrgyzstan, Tajikistan and the Russian Federation. Alliance bank has the same potential to succeed by geographic expansion. In the long term, Alliance Bank can expand to other regions of the world, access new markets and grow in the future.5. tribute (Business Strategy)Due to rapid development of technology, Alliance bank can use an opportunity of creating a more developed SMS-banking system. SMS-banking is type of mobile banking, which allows customers to operate selected banking services over their mobile phones using SMS-messaging. Alliance Bank already had implemen ted profits banking. Still, it is not widely used among its customers due to inconvenience of practice. Bank has to promote its online banking system and SMS-banking very actively so that customers get to know the services of bank. By developing the SMS-banking, Alliance Bank will have a chance to compete with its rivals, spot its services from other banks, which do not have internet-banking and SMS-banking yet. SMS-banking is well developed in international banks, as well as in Kazakhstan. One of the banks that use this system is Kazkommertsbank. Thus, Alliance Bank can say its services by using one more feature to its customers. SMS-banking is very trustful, riskless lotion that allows doing following operations proportion enquiryStatement request computer memory transfer to account number investment firm transfer to mobile number certain exchange rates information deposit interest ratesBank could disruption new offerings, i.e. do mobile trade through the SMS-banking, which allows decreasing the amount of funds spent for merchandising. Bank could also use one of the latest tools against cyber-fraud One-time password. OTPs are request each time customer wants to perform transactions. Once password is used, it expires. nigh of SMS-banking solutions are add-on products, which work on banks existing platform. Today, however, some companies develop independent applications that allow using SMS-banking. For instance, Alliance bank has access to SMS banking application for apple products. The problem with this application is that it is only acquirable for Apple products and also it is not elementary to use. Ratings of users remain very low. There is one more application available for android system, called Handpay. This application, however, is also not easy to use, requires high speed of internet. Payment is only withdrawn for SMS-requiries sent to the bank. However, customers do not find it useful. Therefore, we suggest developing a new platform for the bank. Firstly, it will increase the sentry duty of operations for customers. Secondly, it will allow bank to charge customers with monthly fee (200 KZT for example), which is additional source of income.Thirdly, it will allow bank to spread information about new products without spending money for advertisement (through pull messages). Another business strategy recommendation for Alliance Bank is to introduce a new service reward accounts. This is very convenient service for Alliance Bank subscribes because their long term clients will chit with their bank even during reward off period. This service gives an opportunity for pensioners to get their pensions and make other transactions with the same account. Alliance Bank should think about new activities which differentiate them from their competitors. One of such activities is launching pension cards for free. Another activity which our team recommends to Alliance Bank is that the bank should offer pensioners to buy or order Internet transactions with lowest possible rate. pension accounts will give Alliance Bank and additional opportunity to expand its network. 6. Recommendation (Functional strategy)The operating(a) strategy of the bank should be based on both recommendations on corporate and business strategies that our team offered. distinct departments in the bank, such as Human Resource, R&D, Marketing and score/finance realize functional strategy. The main aim of functional strategy is to reassure that corporate and business strategies implemented by the bank are successful. Alliance Bank should implement following activities for each of the above-named departmentsCorporate StrategyBusiness StrategyStrategy/ DepartmentStrategic attachmentInsurance CompanyGeographic expansionSMS BankingPension accountMarketing believe of permit way to stand this message to customers presage efficiency of these alliance lend oneself wedge merchandiseThink of appropriate way to enter insuranc e marketUse Pull marketing touch sensation local advertising agency to plan their marketing campaign for entering new market Use Pull marketingThink of appropriate way to generate this message to customers Use Push marketingThink of appropriate way to deliver this message to existing clients Use PushmarketingH&RSelect new manager for executive director position aim new personnel for new companySelect and blame their specialist to the new market claim new local people for different positionsTrain the local personnelHire appropriate IT specialistTeach marketing team the usage of the technology delimitate a team from existing caterR&D come to research before the implementation of allianceMonitoring the efficiency of alliancetechnical leaderResearch about current market on insurance industrytechnical followerResearch on the situation of the banking industry in Tajikistan & Kyrgyzstan Technological leaderResearch sms-banking application and find the most appropriate and easy to use Technological followerTechnological followerAccounting/Finance perform pro-forma statementFind the most appropriate investorsFind the ways to minimize the costs of opening the new business conduct the future profits of the companyConsider the opportunity of debt financing versus equity financing Find the ways to minimize the costs of opening the new business Calculate the future profits of the company execute pro-forma statementCreate pro-forma statement7. carrying outAccording to our recommendations, Alliance Bank should introduce 1) Strategic alliance with Kazkomertsbank and Halyk Bank, 2) Introducing insurance company, 3) Geographic expansion under corporate strategy. Additionally, there were some more recommendations under the business strategy such as SMS banking and pension account. Accordingly these new activities and businesses will change organisational structure of Alliance Bank and may introduce new management strategy. For signing Strategic Alliance, the bank i tself will be trusty for all documentations. As for introducing insurance company, the company will have another division with responsible management. This would be the example of divisional type of organizational structure. In case of opening Alliance Banks branches in Tajikistan or Kyrgyzstan, the company should have a new managerial position with all functional areas in both countries.Here, Alliance Bank certifying the geographic type of organizational structure. General Manager of both province branches will rapport to CEO of company in Kazakhstan. As about introducing SMS banking, the engineering Manager and R&D Manager will be responsible for launching this service. When this service starts operating, a new manager should coordinate this service. In case of pension account, a new manager under the CEO of Alliance Bank will be assigned. In last two activities Alliance Bank will have the combination of functional and hyaloplasm types of organizational structure. It shows that implementing our recommendations will change the organizational structure of Alliance Bank significantly. 8. stopping pointThe current situation of Alliance Bank makes the managers to think about new strategic plans in order to survive further. The companys external and internal analyses show that company can introduce new activities and businesses which would be profitable for Alliance Bank. Our recommendations are based on analyses of SWOT, VRIO, Value strand and PESTLE. Alliance Bank should introduce corporate strategies as Strategic Alliance with Kazkommertsbank and Halyk Bank, establishing a new Insurance Company and expanding geographically. slaying of Strategic Alliance would take 3-5 months establishing an insurance company would take 3-4 years and geographic expansion would take much long-lived 4-5 years. Alliance bank should introduce business strategies as SMS-banking and pension accounts. Development of the SMS-banking would take 1 year and the development of pension accounts would take 3-4 years. To successfully implement the corporate and business strategies, Alliance bank should involve all the departments of its company. Therefore, Alliance bank should have a good functional strategy. This would include involvement of Marketing, Human Resource, Research and Development, and Finance and Accounting departments. Overall, by summing up all those strategies we developed recommendations for Alliance bank which includes usage of corporate and business strategies in different situations as this would help a company to recover from the technical default and improve its current financial situation.9. ReferencesBerger, A. N. & DeYong, R. (n.d.). The Effects of Geographic Expansion on Bank Efficiency. Journal of Financial Services Research. Retrieved from http//www.federalreserve.gov/pubs/feds/2001/200103/200103pap.pdf Biery , M. E. (2013). The Most Profitable Businesses to Start. Forbes. Retrieved from http//www.forbes.com/sites/sageworks /2013/04/28/the-most-profitable-businesses-to-start/ Clardy, A. (2013). Strengths vs. Strong dapple Rethinking the Nature of SWOT Analysis. Modern guidance Science & Engineering, 1(1). Kazakhstan commercial banking report. (2012). Business Monitor International. Kazakhstan Overview. The World Bank, (2014). Retrieved from http//www.worldbank.org/en/country/kazakhstan/overview Tatum, M. (2014). What Is a Concentration Strategy? Retrieved from http//www.wisegeek.com/what-is-a-concentration-strategy.htm Toktabayev, K. (2013). Internet Banking. Business Review. Retrieved from http//profit.kz/articles/2019/Internet-banking-2013-ili-Odin-v-banke-dnem-shest-let-spustya/ Vidyanova, A. (2014). Alliance Bank face Technical Default.Capital Finance. Retrieved from http//kapital.kz/finance/26763/v-alyans-banke-proizoshel-tehnicheskij-defolt.html Yertayev, Z. (2013). Position of Kazakhstani banking system today Review. Forbes journal. Retrieved from http//forbes.kz/life/opinion/v_kakoy_zone _nahoditsya_bankovskaya_sistema_kazahstana