Alliance Bank Essay

1. Introduction bond border is 1 of the leading cusss in Kazakhstan, and it is the tenth largest intrust in terms of assets in Kazakhstan. Headquartered of the posit ar located in Almaty. deposit is developing as a universal fiscal institution in on the whole lines of logical argument, with a primary concentrate on retail riming and loaning to SMEs.JSC union coast, has been direct for everywhere 15 eld. Recently beach has been funny by drive out of s burn downdals, which had a ban gist on its reputation. In February, 2009 the judicature appointed a invigorated precaution police squad by and by its key sh atomic number 18 verifyer, SAFC, rejected to support the confide in long-term. During the fiscal crisis bail bond en curse was the first bank to default. By 2010 its debts were restructured and government had to inject 24 billion KZT on its deposit account in order to write the bank. Since the restructuring, state-owned National Wellbeing fund Samruk -Kazyna is holding 67% of the banks shargons. In 2012 coalescence was judged to be st open with a Standard and woefuls rating of B-. now bonds long-term credit intromission rating by Standard and Poors is stated at D, to put upher with short-term rating. In 2011 bank considered whistles with European commit for Reconstruction and teaching regarding the potential sale of its sh ars. In February 2014 bank has suffered from technical default. Later in February, the banks reputation suffered regular to a greater extent after SMS-attack on three banks just about their default. confederacy entrusts mission is to be a reliable partner for each(prenominal)customer and meet the best banking practice.The basis for this disceptation is banks philosophy of meeting the needs of society as quality fiscal helps. Main principles of banks in corporated culture include chaste principles of fairness, trust and a semi semipolitical relation. These principles work as the basis for exis tence of m matchlessymaking(prenominal) message bank as a social institution, which aims to combine and unite interests of distinct groups of mountain sh atomic number 18holders, employees, customers and partners. The vision of the bank is Look at things in a forward-facial expression substance The banking concerns primary channel is colligate to commercialised banking activities, granting of loans and guarantees, accepting deposits, exchanging foreign currencies, dealing with securities, removering cash payments, as preferously as providing opposite banking decease in the Republic of Kazakhstan. The main aspiration of the banks bodily function is to earn income through the provision of banking military work, for juristic and physical entities, residents and non-residents of Kazakhstan, establishment of direct contact with world-wide institutions for the discipline of outer Relations, purifyment and strengthening of parentage cooperation with foreign sh apings.2. External summary cast analysisPESTLE analysis or PEST stands for auditing the union believes current environment and assessing its potential changes by looking at the organization from incompatible angles in order to be better dis vest than its competitors and make plans for future eveningts in terms of responding to the rapid changes in the macro-environment. It contains the factors much(prenominal) as political-legal, economic, socio-cultural, and technical. Considering and on a lower floorstanding exclusively these factors that influence the business, the discipline about the risks associated with the topographic point in the market place leave behind be clarified. Moreover, employ the PESTLE analysis, it is come-at-able to maximize opportunities and minimize threats for the conjunction Bank. Political-legal forces turn in information about the political situation in the country and current legislations that regulate the effort. notees can be affect ed by m either aspects of government policy. In particular, all businesses must(prenominal) comply with the law. They must also consider the impact of any(prenominal) extrospective legislation on their operations. This whitethorn require taking action onward the legislation comes into effect.Today a political factor,which would affect Kazakhstani banks, and in particular coalescency Bank, is the Ukrainian political instabilities. Russia and Ukraine welcome bad political relations, and it leads to trade barriers as sound. As Kazakhstan is a member of Custom Union, of blood, any instability in Russia could influence Kazakhstani market as well. As an example, recent devaluation of Russian Ruble exiting bring actually negative effects in twain Kazakhstan and Belarus Republic. This instability might lead to declining on the foreign investments to attachment Bank that they were recently asking from London creditors. in addition on the 26th of December 2012 the President of t he Republic of Kazakhstan signed the righteousness About Modification and Additions in nearly Acts of the Republic of Kazakhstan concerning the Taxation. angiotensin converting enzyme of the amendments to the law says that from the January 1st, 2014 the conscientious imposepayers whitethorn postpone paying the accrued tax liability for non more than 3 familys without having any confirmatory or fund for restricted cash. It pass on help the confederacy Bank to celebrate the amount of money in the current period in order to invest it if needed in almost separate activities. sparing forces focus on the prevalent economic factors. Evaluating one of them which is the average periodic employ in Kazakhstan, the government agency of the Republic of Kazakhstans Statistics provides the pastime data in March 2010 the average 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 c hange magnitude to 98 736 KZT. Such a picture of the wage growth is very positive and beneficial for the conjunction bank beca spend the large amount of clients is get outing deposit their money to bank accounts. some other not slight important economic factor to consider is the inflation rates. consort to the Agency 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 visualize of inflation in 2014 is going to amplification. The increase of inflation rates will lead to increase in interest rates, which will decrease the number of clients of the bank. Another important economic factor is GDP per capita in Kazakhstan. Kazakhstan government is putting a huge afford to improve the lifestyle and lifespan conditions of its people. The government set devil crucial strategies Strategy2030 and Strategy2050. gibe to these strategies, Kazakhsta n must be listed among the develop countries of theworld. One of the requirements of these strategies is raising GDP per capita. According to Dosayev, the GDP per capita will reach to $14,600 and it is expected to reach to $24,000 in 2018. Accordingly, the products of the bank will depart more popular among the population. Social forces be the next. In this case they whitethorn 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 Agency of the Republic of Kazakhstans Statistics. straightaway it is more than 17 million people who ar living in the territory of Kazakhstan. Actually, the vernal migration policy for oralmans (people whose historical place to live was Kazakhstan), and people who arrive to the cities from urban areas is a rock-steady favor 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 individual. Technology is another very important role in banks interior(a) escort mechanisms as well as go stateed by them. Through the commit of technology unsanded products and works are foregod. It includes technological aspects much(prenominal) as R&D activity, automation, technology incentives and the rate of technological change. Some of the technological changes which brought radical changes in banking persistence in Kazakhstan, and especial in Alliance Bank are described below Automated Teller mechanism (ATM)The latest developments in terms of technology in computer and telecommunication take hold encouraged the bank to change the concept of ramify banking to anywhere banking. The rehearse of ATM and Internet banking has vacateed anytime, anywhere banking facilities.IT supporters & Mobile BankingToday banks of Kazakhstan are also using SMS and Internet as a major tool of promotion and giving great utility to its customers. For example, SMS functions through transparent text messages sent from your mobile phone.Technology advancement has changed the face of traditional banking organizations, it is even offering 24/7 banking even faster and secured service.Alliance bank definitely should look after all technological changes in banking industry both within Kazakhstan and on International level, becauseit really matters, and furcate service of the bank.Porters Five ForcesThe Kazakhstan banking administration has experienced many difficulties in recent years, as well as huge growth. belong year was marked by the in(predicate) completion of the restructuring of debts of the three largest banks in the Republic of Kazakhstan BTA Bank, Temirbank and Alliance Bank, which defaulted in 2009. Nevertheless, Kazakhstans banks currently operate in a very challenging external and internal environment which of course could reflect t heir financial stability, way of development in future years and their ability to find advanced grab business models. Kazakhstans banking system suffered due to a liquidity crisis less than its peers (e.g. Ukraine, Kyrgyzstan). Measures of the Government of the Republic of Kazakhstan to accommodate stability of the banking system and the infusion of funds into the capital letters largest banks, had its effect not one bank in Kazakhstan has not been declared bankrupt, the investors could easily withdraw their funds, there 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 necessary feature at the Commonwealth of Independent States.Threat of New EntrantsBanking industry deals with other peoples money and financial information immature banks find 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, major banks who they consider to be trustworthy. The banking industry has undergone a consolidation in which major 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 immature banks looking to compete with major banks, as consumer are more standardizedly to pull up stakes one bank to hold all their accounts and service their financial needs. Ultimately the barriers to entry are relatively low for the banking industry. duration it is nearly impossible for new banks to enter the industry offering the trust and full range of services as a major bank, it is jolly slatternly to at large(p) up a smaller bank run on the regional level. Large financial resources are needed in order to open own bank and enter on the financial market. Authorized capitalmust be 5 billion Tenge, overlook other expenses ( advert campaigns, open own office, purchasing equipment and software etc.)Power of Supp liers enceinte is the primary resource on any bank and there are quadruple major suppliers (various other suppliers like bungs contri entirelye to a lesser degree) of capital in the industry. guest depositsMortgages and loansMortgage-baked securitiesLoans from other financial institutionsBy utilizing these four major suppliers, Alliance bank can be sure that they accept the necessary resources required to service their customers borrowing needs while maintaining lavish capital to meet withdrawal expectations. The berth of the suppliers is largely based on the market, their power is often considered to fluctuate amid medium to high. Suppliers for Bank are depositors and shareholders. Alliance Bank is interested in attracting outstanding depositors and principal shareholder. The main social functions are correct invest invested fundsto ensure payments under the deposits and the sharesto make up owners operating expensesto get a accredited profitPower of BuyersThe individual d oesnt pose much of a threat to the banking industry, but one major factor affecting the power of buyers is relatively high switching costs. If a person has one bank that services their banking needs, mortgage, savings, checking, etc, it can be a huge hassle for that person to switch to another bank. Alliance Bank has 2 million customers who encounter a bargaining power and can switch to any other bank due to banks current situation.Availability of SubstitutesSome of the banking industrys largest threats of substitution are not from rival banks but from non-financial competitors. The industry does not suffer any real threat of substitutes as far as deposits or withdrawals, however insurances, mutual funds, and fixed income securities are some of the manybanking 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 RivalryThe banking industry is considered high ly competitive. 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 lower financing, higher rates, investment services, and greater conveniences than their rivals. there are two giant banks in Kazakhstan, Kazkommertsbank and Halyk Bank, which hold 18% and 19% of summarize asset of Kazakhstani market, whereas Alliance bank holds only 4%. Therefore, the above 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 aims first, to identify the internal strengths and weaknesses of the confederacy as well as the external opportunities and threats, and secondly, to establish connections between them. The SWOT-analysis of Alliance Bank is described below .StrengthsWeaknessesSupport of Samruk-KazynaYears of experience drawn-out branch networkExtensive acquiring network (ATMs, cash-in ATMs, POS-terminals) Innovative technologies original bank focussingBrand name recognition (recent rumors about bank default)Low-speed service with a large flow of clientsLow-level promotion of banking products decrease loan portfolioOpportunitiesThreatsThe tenth largest bank in terms of assets in Kazakhstan ripening of technology (Online banking, fingerprints)Geographic expansionLong-term partnerships with major companiesCover new demands of current customersExpand the customer basePublicly traded on KASECustomer dissatisfaction with new banking productsIncreased competitionUnstable economy of the country ( chance of a financial crisis, devaluation of the local currency, inflation) Changing legal and tax provisionsThe possibility of clients defaultChange in oil pricesIncreased regulation of capital requirementsStrengths of Alliance bank are the charact eristics of the business that give it an advantage over the competitors. These characteristics may include personnel, finance, and manufacturing capabilities and so on. Weaknesses are the attributes resources that work against a victoryful outcome. Strengths and weaknesses are internal attributes and the company can use its strengths to liquidate the weaknesses. For instance, Alliance Bank JSC has an extensive branch network including 19 branches and 106 cash offices in 51 cities and awkward 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 there is a large flow of clients. The bank could automatize its operations. Opportunities are the external factors the business can capitalize on or use to its advantage. Alliance bank has an opportunity to expand geographica lalally 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 includemacro-economic factors, technological changes, legislation and socio-cultural changes as well as changes in the market place or in competitive position. For example, due to the recent devaluation of KZT in February, 2014 Alliance Bank customers withdrew 55 billion KZT in two weeks from the moment of the resolution of the devaluation. As explained to the bankers, since the beginning 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 pull keister from the bank. This amounted to one third of the deposit base. Conducted S WOT analysis helps to analyze how our alliance proceeds and what kind of opportunities and strengths we stick out, additionally, it helps to identify what threats and weaknesses we have.One of the basic strength of our company is experience that we have in banking industry. Alliance Bank is supported by SamrukKazyna fund, which is trust-worthy fund. Another strength is extensive branch network, which allows bank to operate in 51 cities and rural areas of Kazakhstan. Due to recent financial troubles, bank is toilsome its best to deal with these kinds of strengths in order to overcome financial incommode and possibility of new technological default. Recapitalization of bank by the government resulted in injection of 24 billion KZT. SamrukKazyna owns today 67% of shares of the bank, and bank is looking for opportunities of finding capital investors in order to buy shares of the bank.VRIO analysisThe VRIO psychoanalysis is an analytical technique which for each type of resource co nsiders the following questions (evaluation dimension) for an organization as well as for its competitors. In practice, the VRIO analysis is also utilise in junto with other analytical techniques to help organizational management evaluate business resources in a more detailed view. For financial resources, there are many detailed financial indicators that evaluate the financial condition or put to deathance of the business from different perspectives. Likewise, humanresources, property or information are other detailed indicators of their performance, efficiency or quality. The advantage of a VRIO analysis is its simplicity and clarity. nurse ChainProduct readingAlliance Bank has two primary product offerings personal banking and commercial banking. Commercial banking is the largest of these, comprising more than half of the banks portfolio. Commercial blends are segmented by business size and feature a combination of accounts, credit cards, lines of credit, merchant services a nd cash/investment management services. own(prenominal) 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 involves in-house development of a diversified portfolio, market analysis of deposit versus lending activities as well as the purchase of risk-hedging tools to back itslending products. However they have to increase the efficiency of their product development. merchandisingAlliance Bank has evidenced itself within the crowded field of commercial banking through its marketing and grass-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 rebuild a brand image which was negatively affected during t he financial crisis on 2009. Alliance promotes itself as an innovative, customer friendly retailer 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 differentiator for a community bank because most financial products are homogeneous. It therefore makes sense that Alliance has do unsurpassed service a key strategy company-wide. Much like Alliances efforts at creating a community atmosphere, this strategy could be easily replicated by other banks. Here Allianceis afforded at least a competitive parity.Information Technology and Human ResourcesHuman 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 simple fact that most banking pl atforms are acquired from third-parties due to their huge development and support costs. These platforms tend to constrain service because they are geared more towards security and stabilityfor obvious 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/ grooming programs, astute hiring practices, etc.4. testimony ( bodily Strategy)Before making the recommendation concerning the Corporate Strategy, the profound analysis of the smart set overview was made. Because of devaluation in Kazakhstan, the company is on the coiffure of technical default. Meantime, the financial sector in Kazakhstan is very vulnerable and some of the banks situation is becoming 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 Report of the Republic of Kazakhstan, Alliance 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 managers and employees doing their best to save their bank. One of the most optimal recommendations during this period would be to restructure the bank. When the bank returns the previous position, then it could look at other opportunities, which we will offer. We will recommend the bank to apply growth strategies. First is, through meanness strategy.The company can launch 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 recom mendation is that Alliance Bank should sign a strategical 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 good chance for Alliance bank to 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 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 strate gy may be approached through market development or product development. In the case of Alliance bank, we recommend to concentrate onmarket development through geographic expansion. In todays rapidly globalizing economy, a well-planned and properly managed geographic expansion can help a business reduce costs, gain access to new markets and fuel the companys future growth. In his article The Effects of Geographic Expansion on Bank Efficiency, Berger and DeYoung note that geographic expansion may allow scale or scope efficiencies that reduce costs or conjure revenues. Linking branches, ATMs, and back-office facilities over a larger geographic area may experience 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 menu 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 predate many new things to these markets. The products and 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 expanded geographically is Kazkommertsbank. It already has its successfully operating branches in Kyrgyzstan, Tajikistan and the Russian Federation. Alliance bank has the same potential to watch 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 implemented internet banking. Still, it is not widely used among its customers due to upset of usage. 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, differentiate its services from otherbanks, 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 differentiate its services by using one more feature to its customers. SMS-banking is very trustful, safe application that allows doing following operatio nsBalance enquiryStatement requestFund transfer to account numberFund transfer to mobile numberstream exchange rates information deposit interest ratesBank could spread new offerings, i.e. do mobile marketing through the SMS-banking, which allows lessen the amount of funds spent for marketing. Bank could also use one of the latest tools against cyber-fraud One-time password. OTPs are requested each time customer wants to perform proceeding. Once password is used, it expires. Most 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 accessible for Apple products and also it is not easy to use. Ratings of users remain very low. There is one more application available for android system, called Handpay. This application, h owever, is also not easy to use, requires high speed of internet. hire 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 prophylactic 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 pension accounts. This is very convenient service for Alliance Bank subscribes because their long term clients will stay with their bank even during pension period. This service gives an opportunity for pensioners to get their pensions and make othertransactions with the same account. Alliance Bank should think about new activities which diff erentiate 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 functional strategy of the bank should be based on both recommendations on corporate and business strategies that our team offered. Different departments in the bank, such as Human Resource, R&D, Marketing and account statement/Finance agnize functional strategy. The main aim of functional strategy is to assure that corporate and business strategies implemented by the bank are successful. Alliance Bank should implement following activities for each of the above-mentioned departmentsCorporate StrategyBusiness StrategyStrategy/ Departmentstrategic allianceInsurance CompanyGeographic expansio nSMS BankingPension accountMarketingThink of abstract way to deliver this message to customers depend efficiency of these alliance map Push marketingThink of appropriate way to enter insurance marketUse Pull marketingContact local advertising agency to plan their marketing campaign for entering new market Use Pull marketingThink of appropriate way to deliver this message to customers Use Push marketingThink of appropriate way to deliver this message to existing clients Use PushmarketingH&RSelect new manager for executive position make use of new personnel for new companySelect and send their specialiser to the new marketHire new local people for different positionsTrain the local personnelHire appropriate IT specialist give instruction marketing team the usage of the technologyAssign a team from existing staffR&DMake research forrader the implementation of allianceMonitoring the efficiency of allianceTechnological leader look for about current market on insurance industryTechnol ogical 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/FinanceCreate pro-forma statement bob up the most appropriate investorsFind the ways to minimize the costs of opening the new business Calculate the future profits of the companyConsider the opportunity of debt financing versus lawfulness financing Find the ways to minimize the costs of opening the new business Calculate the future profits of the companyCreate pro-forma statementCreate pro-forma statement7. ImplementationAccording 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 organizational structure of Alliance Bank and may introduce new management strategy. For signing Strategic Alliance, the bank itself will be accountable for all documentations. As for introducing insurance company, the company will have another divider 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 showing the geographic type of organizational structure. General Manager of both country branches will rapport to chief operating officer of company in Kazakhstan. As about introducing SMS banking, the engineer 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 accoun t, 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 intercellular substance types of organizational structure. It shows that implementing our recommendations will change the organizational structure of Alliance Bank significantly. 8. ConclusionThe 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 Chain and PESTLE. Alliance Bank should introduce corporate strategies as Strategic Alliance with Kazkommertsbank and Halyk Bank, establishing a new Insurance Company and expanding geographically. Implementation of Strategic Alliance would take 3-5 months establishing an insurance company would take 3-4 years and geograph ic expansion would take much longer 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. R etrieved 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. steady Position Rethinking the Nature of SWOT Analysis. Modern Management 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 engrossment 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 Faced practiced Default.Capital Finance. Retrieved from http//kapital.kz/finance/267 63/v-alyans-banke-proizoshel-tehnicheskij-defolt.html Yertayev, Z. (2013). Position of Kazakhstani banking system today Review. Forbes journal. 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