Business Strategies and Key Success Factors of Financial Holding Companies in the International Environment

Business strategies are long-term plans set by the top management team. The strategies need to be well evaluated before they are set because of their sensitivity to ensuring the success of a business. Multinational financial group companies operations are essential in the global economy and also face a unique environment. It is vital for the decision makers to identify the critical success factors that influence their performance to ensure the best strategies are set. Therefore, the study looks into the key factors that influence the success of multinational holding financial companies that should be considered in the strategy setting. As per the past studies, strategies set need to observe some rules to ensure that they steer a company to success. Some of the identified factors include companies should evaluate their competitors and consider the needs and expectations of both internal and external stakeholders. The research would use a quantitative research method and identify participants using simple sampling technique. The researcher plans to use questionnaires to collect primary information from the sample population. Finally, the research expects to face some challenges during the research some difficulties in identifying respondents and financial challenges.

Business Strategies and Key Success Factors of Financial Holding Companies in the International Environment

Introduction

Business strategies are a long-term plan set by company organization on the goals and objectives of a company (Gil-Pechuan, Palacios-Marques, Peris-Ortiz, Vendrell&Ferri-Ramirez, 2014; Zakaria& Kaushal, 2017). It defines what should be done when and who should do it in business. Strategies are essential to the success of any organization because it gives a roadmap of all actions. Sound business strategies enable a firm to thrive in the dynamic business environment. Business strategies are set by the top management of a company (Kudina, 2012). It becomes complex as an organization grows big. In setting up the business organization, management aims at coming up with the best plan that would ensure the company remains profitable in the unforeseeable future (Litz, 2013). In setting the business strategies, the management of needs to find out the key success factors that lead to the thriving of business in the competitive environment. A company that comes up with a good business plan meets gains competitive advantage and eventually gains more significant market share.

Research Problem

Multinational financial institutions operate in the relatively unique environment and require careful scanning of a situation to identify the success factors to come up with the right strategies. Multinational financial institutions have been facing challenges such as different regulations depending on the country of operations, and the business is also affected by the global financial conditions. The uniqueness of the business makes the top management of holding financial companies face challenges in setting up business strategies. Identification of the key success factors for a multinational financial organization becomes necessary to ensure relevantly, and the right strategies are laid. It would help in reducing the chances of business failure and other impacts of poor decisions made by a financial institution such as financial crisis. Therefore, in this research paper, a study will be carried out to find out the key success factors of financial holding company in the international environment.

Literature Review

According to Kourdi (2015) and Cosenz and Noto (2017), a business strategy is a vital tool that determines the possibility of success of any business. Campbell, Edgar, and Stonehouse (2013) add that business strategies can determine the profitability of a company. They further argue that the business strategies give the roadmap for the future of a company and management should always ensure that relevant plan is in place. Grant (2016) highlights that the business strategies set for the future success of any business vary from one institution to the other and from an industry of operation to the other. Uhl and Gollenia (2016) support Grant (2016) and further argues that the difference in strategies makes the difference in the performance of organization even when they operate in the same. According to Chang (2016), the big impact in a firm caused by business strategies is because it gives guidelines of what should be done and the times it needs to be done. Campbell, Edgar, and Stonehouse (2011) and Bei Wang and Mengsiying Li (2017) argue that business strategies ensure there is no confusion in the operations of the company that can lead to crisis.

According to Matsumoto et al. (2017), competitors determine the type of strategies in place because of their effect in influencing the consumer power. Chang (2016) further says that the competition in business makes the buyer more powerful especially when there is low switching cost. Zhang et al. (2014) argue that a company should strive to ensure that the strategies set do not give the competitor an advantage. According to Pticar (2016) and Strohhecker and Grobler, (2012), competitions also affects the supplier's power, and it is the duty of the management in setting up of strategies to factor in the competitors to ensure that the suppliers do not switch to them and lead to insufficient or low-quality raw materials. Competitors also affect the strategies set according to Schlickel (2013), because of their influences in the workforce of a company. Lei and Slocum (2013) highlight that a company's success when they hire the best personnel in the market who can fulfill the aims of a company excellently. According to Campbell, Edgar, and Stonehouse (2013), in the even they are not satisfied, the turnover becomes high, and they might strengthen a competitor who offers a better deal that relatively matches their goals.

Kourdi (2015) and Ordonez de Pablos (2016) point out that a strategy to ensure the success of business needs to be relevant to all stakeholders such as employees, shareholders, customers and other interested parties such as governments.According to Mathur, Mathur, and Kenyon (2012) and Zhilyakova (2016), a good strategy that suite all the stakeholders reduces possible resistance and unnecessary expenses. According to Kotlarsky, Oshri, and Willcocks (2012) and Syed and Kramar (2017), when workers are not satisfied with the set strategies, they look for other jobs and leads to low production and increase in hiring cost. According to Awino (2016) and Zapunnaya (2015), governments set up the laws and regulations that govern the operation of an organization and failure to adhere leads to substantial penalties. Braun and Latham (2014) argue that the shareholders of a company are significant because they own the business and their interest should always be factored in for future continuity and ensuring that they do not withdraw their investment. Rugman (2012) points out that customer is the main reason for the existence of a company and failing to plan on how to fulfill their needs leads to business failure.

Methodology

Research can be carried out using one of the two types of research methods, quantitative and qualitative (Creswell, 2013). Quantitative research method usually measures a problem by generating numerical data while qualitative research method tries to get an understanding of underlying reasons and opinions. In this research, the study method that will be used is quantitative because this technique will provide a holistic view of the study topic.

Research Design

The research will use a simple random sampling technique to collect data from the research population. The design eliminates possible bias in identifying respondents and identifies a sample that is a representation of the whole population (Tracy, 2013). It gives all the members of the target population an equal opportunity to participate in the study. The technique is also advantageous to the researcher in that it provides ease of identifying the participants.

Target Research Population

The research would have one hundred respondents. The participants will be identified from senior management level of multinational holding financial companies. The number of holding companies will be limitless and will be determined randomly to minimize the risk of failing to get sufficient participants. The number of the senior management team in multinational business is usually busy and therefore, having a limitless number of companies enables the researcher to get respondents easily.

Data Collection Instruments

The researcher will collect data using questionnaires. The questionnaire provides the researcher with an opportunity to collect data from relatively many participants in a short time (Tracy, 2013). It suits this research because of the possibility of the busy schedule of the participants because they can respond at their own free time. It is also relatively cheap and convenient because it minimizes the chance of the researcher influencing the participants in giving their opinion. The research will employ both open and close-ended kinds of questionnaires. An open-ended question provides the responded with an opportunity to express their opinion and feeling towards a subject. It also gives them a chance to provide possible suggestions to improve future study (Gass& Mackey, 2012). On the other hand, the closed-ended questionnaires give one an opportunity to choose a response from a specified list of answers. It is advantageous in that respondents cannot provide their own opinions or solutions that are irrelevant as per the research. The combination of the two types of questionnaires would give the researcher an opportunity to get the respondents opinions and also ensure that the main research objective is achieved. Using only the open-ended question would lead to possible failure to get the opportunity to achieve the researchers primary objectives where respondents provide opinions that are not in line with the research objective (Gass& Mackey, 2012). However, using only closed questionnaires would limit the possible useful information that would boost the coming up with a more comprehensive and valuable conclusion.

Ethical Issues

Respondents will have the freedom to participate and withdraw from the process at any point of their choice. Their identity will remain anonymous and will not be disclosed to anyone including other participants. All the materials for the research will be paid by the researcher. All respondents will be informed the reason for the research so that they can be aware of the reason why they are responding to the questionnaires. The information collected will only be used for the research purpose and not for any personal gain and will not be disclosed to any individual or company.

Possible Pitfalls and Barriers

The researcher is aware of the possible challenges that may be faced during the research process. Some of the potential barriers include insufficient time, finances and unwilling participants to give information. To overcome the difficulties, the study will plan to start the data collection early enough and leave a margin of safety in case some participants withdraw in the process. The participants will be granted an opportunity to send their responses using different channels. The researcher will also look for finances from different sources including donors and friends to avoid possible failure in the process.

References

Awino, Z. (2016). Critical success factors in the implementation of strategy by the multinational corporations in the pharmaceutical industry: an empirical investigation. Archives of Business Research, 4(2). http://dx.doi.org/10.14738/abr.42.1919

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