Merrill Lynch

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1. Given the changes that have occurred in the international capital markets during the past decade, does s strategy of expanding internationally make sense? Why? In a couple past decades the world has become a smaller place especially in the sense of communication and ability to conduct business internationally. With the emergence of new technologies managing and controlling has become easier than ever before, thus allowing companies to go global introducing their services and products in various countries. Not only technical assistance gave such a rise to multinational businesses but also international policies of countries that were closed before for foreign investment. For instance countries such as Japan and former Soviet Union have opened their markets for big companies from the United States and other economically developed countries.

2. What factors make Japan a suitable market for to enter? The fact of s leading position in the States and its acquisition of the leading mutual funds companies of economical giants such as Britain and Canada have made it possible at least theoretically to enter Japanese market. On the other hand it didnt consider national buying characteristics and regulations over financial service industry. However the removal of number of restrictions and allowing Japanese people to purchase foreign bonds and stock in the mid 1990 had made Japanese market suitable for entrance and establishment of foreign capital. Moreover their government understood the necessity of new blood in countrys economy which would be donated by foreign companies to enhance competition and bring in more funds.

3. Review s 1997 reentry into the Japanese private client market. Pay close attention to the timing and scale of entry and the nature of the strategic commitments is making in Japan. What are the potential benefits associated with this strategy? What are the costs and risks? Do you think the tradeoff between benefits and risks and costs makes sense? Why? The first attempt of to enter Japanese market failed as their market was not regulated to accept international players. In 1997 however the situation changed under the WTO agreement for the better allowing foreign firms to sell financial services to their national investors. Regarding their previous experience they were hesitating to enter Japanese market but it was clear that this time things have changed with open market and huge amount of assets owned by Japanese households were too attractive to miss such opportunity. It was perfect timing for as there were only few other foreign competing companies and their prior experience in private client market made it even more suitable. The bankruptcy of Yamaichi Securities in 1997 was a perfect circumstance for American company to start entering Japanese market. They first considered a joint venture that would allow minimum spending as they had a chance to use already existing distribution system of a known Japanese bank. On the other side they didnt see their presence on the market due to this venture in the long run thus they reconsidered this deal and were lucky to hire workers and buy Yamaichis branch offices in 1997. definitely won in this situation when establishing their companys position on the market without reporting and coordinating their moves with another Japanese company. The risk they took when working on their own paid off very quickly and significantly to their benefit, regarding enormous value of the assets held by the company.