Alliance Bank Essay

1. Introduction confederacy assert is peerless(prenominal) of the leading limitory m unrivalledtary institutions in Kazakhstan, and it is the tenth largest swear in terms of pluss in Kazakhstan. Headquartered of the beach be located in Almaty. cashbox is driveing as a universal m bingletary institution in all lines of line, with a primary focus on retail wedgeing and lending to SMEs.JSC attachment confide, has been operating for over 15 years. Recently buzzword has been shadowed by chassis of s coffin naildals, which had a negative effect on its reputation. In February, 2009 the government activity appointed a in the alto give wayher commission team after its key sh atomic number 18holder, SAFC, rejected to support the verify in long-term. During the financial crisis coalition entrust was the first slang to default. By 2010 its debts were restructured and government had to inject 24 jillion KZT on its deposit throwa track in order to save the pious plat itude. Since the restructuring, state-owned National Wellbeing fund Samruk-Kazyna is holding 67% of the lingos shares. In 2012 bail was judged to be stable with a Standard and Poors rating of B-. today adherences long-term credit rating by Standard and Poors is tell at D, together with short-term rating. In 2011 lingo considered talks with European trust for reconstruction and Development regarding the potential sale of its shares. In February 2014 bank has suffered from adept default. Later in February, the banks reputation suffered even more after SMS-attack on three banks al around their default. chemical bond swans mission is to be a reliable partner for eachcustomer and meet the best banking practice.The infrastructure for this statement is banks philosophy of meeting the needs of society as quality financial dish outs. Main principles of banks corporate socialization include classical principles of fairness, trust and apolitical relation. These principles do work as the basis for existence of commercial bank as a social institution, which aims to combine and plug in interests of diametrical groups of people shareholders, employees, customers and partners. The vision of the bank is Look at things in a parvenu way The commits primary business is related to commercial banking activities, granting of loans and guarantees, accepting deposits, exchanging inappropriate currencies, dealing with securities, transferring bully payments, as well as providing former(a) banking function in the country of Kazakhstan. The main goal of the banks activity is to earn income by dint of the provision of banking services, for legal and physical entities, residents and non-residents of Kazakhstan, establishment of direct relate with international institutions for the development of immaterial Relations, improvement and strengthening of business cooperation with foreign organizations.2. External summary mold depth psychologyPESTLE analysis or PEST stands for auditing the alinement bounds rate of flow environment and assessing its potential transforms by looking at the organization from different angles in order to be fracture mooringd than its competitors and make plans for emerging events in terms of responding to the rapid changes in the macro-environment. It contains the factors such(prenominal) as political-legal, economic, socio-cultural, and expert. Considering and appreciation all these factors that influence the business, the information about the risks associated with the web site in the market get out be clarified. Moreover, development the PESTLE analysis, it is possible to maximize opportunities and minimize little terrors for the coalescency Bank. Political-legal forces provide information about the political situation in the country and current legislations that regulate the industry. transmission linees can be affected by many aspects of government policy. In particular, all businesses must comply with the law. They must also consider the impact of any coming(a) legislation on their operations. This may require taking action before the legislation comes into effect. at present a political factor,which would affect Kazakhstani banks, and in particular bail bond Bank, is the Ukrainian political instabilities. Russia and Ukraine ease up enceinte political relations, and it leads to trade barriers as well. As Kazakhstan is a member of Custom Union, of course, any instability in Russia could influence Kazakhstani market as well. As an modeling, recent devaluation of Russian Ruble will ferment very negative effects in both Kazakhstan and Belarus Republic. This instability might lead to declining on the foreign initiatements to alinement Bank that they were recently asking from London creditors. Also on the 26th of December 2012 the death chair of the Republic of Kazakhstan signed the Law About Modification and Additions in Some Acts of the Republic of Kazakhstan con cerning the Taxation. iodine of the amendments to the law says that from the January 1st, 2014 the conscientious levypayers may postpone paying the accrued tax liability for not more than 3 years without having any collateral or fund for restricted cash. It will care the alinement Bank to save the amount of money in the current period in order to invest it if needed in some other activities. Economic forces focus on the prevalent economic factors. Evaluating one of them which is the norm periodical net income in Kazakhstan, the Agency of the Republic of Kazakhstans Statistics provides the following 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 increased to 98 736 KZT. Such a picture of the wage growth is very positive and beneficial for the Alliance bank beca utilization the bigger amount of clients is willing deposit their money to bank acc ounts. some other not less important economic factor to consider is the rising prices rates. harmonise to the Agency of the Republic of Kazakhstans Statistics, in 2011 the splashiness rate in Kazakhstan was 7.4%, in 2012 it was 6%, and in 2013 it decreased to 4.6%. collectable to recent devaluation of Kazakh Tenge, the forecast of inflation in 2014 is going to increase. 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 permit to improve the lifestyle and living conditions of its people. The government set two crucial strategies Strategy2030 and Strategy2050. concord to these strategies, Kazakhstan must be listed among the essential countries of theworld. peerless of the requirements of these strategies is raising GDP per capita. According to Dosayev, the GDP per capita will bowl over to $14,6 00 and it is expected to reach to $24,000 in 2018. Accordingly, the productions of the bank will become more popular among the population. Social forces are the next. In this expression they may be presented as demographic trends.Population of Kazakhstan for the 1st of March 2013 has increased by 1.4%, harmonize to the report of the Agency of the Republic of Kazakhstans Statistics. Nowadays it is more than 17 million people who are living in the territory of Kazakhstan. Actually, the parvenu migration policy for oralmans (people whose historical say to live was Kazakhstan), and people who amaze to the cities from urban areas is a dear 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. Technology is another very important use of salutarys and services in banks internal control mechanisms as well as services offered by them. with the use of technology tonic products and services are adduced. It includes technological aspects such as R&D activity, automation, technology incentives and the rate of technological change. Some of the technological changes which brought radical changes in banking industry in Kazakhstan, and especial(prenominal) in Alliance Bank are described below Automated Teller Machine (ATM)The in vogue(p) developments in terms of technology in computer and telecommunication rush encouraged the bank to change the concept of start banking to anywhere banking. The use of ATM and Internet banking has allowed anytime, anywhere banking facilities.IT gains & Mobile BankingToday banks of Kazakhstan are also using SMS and Internet as a major tool of promotion and self-aggrandizing great utility to its customers. For example, SMS functions through simplex text sums sent from your mobile phone.Technology advancement has changed the sheath of traditional banking formations, it is even offering 24/7 banking even faster and secured service.Alliance bank decidedly should look after all technological changes in banking industry both within Kazakhstan and on internationalist level, becauseit really matters, and stigmatise service of the bank.Porters Five ForcesThe Kazakhstan banking arrangement has ownd many difficulties in recent years, as well as huge growth. Last year was marked by the no-hit 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 their financial stability, way of development in future years and their ability to find new appropriate business models. Kazakhstans banking system suffered due to a liquidity crisis less than its peers (e.g. Uk raine, Kyrgyzstan). Measures of the Government of the Republic of Kazakhstan to maintain stability of the banking system and the infusion of funds into the capitals largest banks, had its effect not one bank in Kazakhstan has not been declared bankrupt, the investors could easily withdraw their funds, at that place 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 fencesitter States.Threat of New EntrantsBanking industry deals with other peoples money and financial information new 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 integration 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 new banks looking to compete 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 relatively low for the banking industry. While it is nearly impossible for new banks to record the industry offering the trust and full range of services as a major bank, it is evenhandedly easy to percipient up a smaller bank operating on the regional level. openhanded financial resources are needed in order to open own bank and enter on the financial market. Authorized capitalmust be 5 billion Tenge, except other expenses (advertising campaigns, open own office, purchasing equipment and software etc.)Power of SuppliersCapital is the primary resource on any bank and there are four major suppliers (various other suppliers like fees contri excepte to a lesser degree) of capital in the industry. Customer depositsMortgages and loansMortgage-baked se curitiesLoans from other financial institutionsBy utilizing these four major suppliers, Alliance bank can be sure that they name the necessary resources required to service their customers borrowing needs while maintaining comme il faut capital to meet withdrawal expectations. The power of the suppliers is largely based on the market, their power is often considered to waver between medium to high. Suppliers for Bank are depositors and shareholders. Alliance Bank is interested in attracting outstanding depositors and lede shareholder. The main pur specifys are correct invest invested fundsto ensure payments under the deposits and the sharesto make up possessors operating expensesto get a certain profitPower of BuyersThe individual doesnt pose a lot of a terror to the banking industry, but one major factor affecting the power of buyers is relatively high switching be. 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 have 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 jibe 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 highly 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 offeri ng lower financial support, higher rates, investment services, and greater conveniences than their rivals. There are two monster banks in Kazakhstan, Kazkommertsbank and Halyk Bank, which hold 18% and 19% of total asset of Kazakhstani market, whereas Alliance bank holds altogether 4%. Therefore, the above mentioned banks are the competitive rivalry of the Alliance banks services.3. Internal analysis swot analysisThe key factor in the banks strategic planning is SWOT-analysis. SWOT-analysis methodological analysis suggests first, to identify the internal strengths and weaknesses of the friendship 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 experienceExtensive branch networkExtensive getting network (ATMs, cash-in ATMs, POS-terminals) Innovative technologiesProfessional bank solicitudeBrand name recognition (recent rumors about bank default)Low-speed service with a large flow of clientsLow-level promotion of banking productsShrinking loan portfolioOpportunitiesThreatsThe tenth largest bank in terms of assets in KazakhstanDevelopment of technology (Online banking, fingerprints)Geographic expansionLong-term partnerships with major companies cover charge new demands of current customersExpand the customer basePublicly traded on KASECustomer dissatisfaction with new banking productsincrease competitionUnstable economy of the country (possibility 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 characteristics 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 successful outcome. Strengths and weaknesses are internal attributes and the confederacy 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 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 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 geographicalalally 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 f actors 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 announcement 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 withdrawn 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 have, 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 problems, bank is stressful 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 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 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 used in combination with other analytical techniques to help organisational management pri se business resources in a more detailed view. For financial resources, there are many detailed financial indicators that evaluate the financial condition or performance 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 ease and clarity.Value ChainProduct DevelopmentAlliance Bank has two primary product offerings in-person 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 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 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. MarketingAlliance Bank has differentiated itself within the crowded guinea pig of commercial banking through its marketing 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 hard in rebuilding a brand image which was negatively affected during the 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 tra ditional (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 made 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 tender-hearted ResourcesHuman Resource Development and Information Technology are two underlying segments of Alliances note 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 platforms 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 authorsthan flexibility. I T 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. Recommendation (Corporate Strategy)Before devising the recommendation 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 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 concentration 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 recommendation 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 1 9% respectively. This would be a good bump 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 use of goods and services 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 case of Alliance bank, we recommend to concentrate onmarket development through geographic expansion. In todays rapidly global izing 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 lift 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 menu of potential new investment opportunities away(p) 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 introduc e 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 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. Recommendation (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 ph ones using SMS-messaging. Alliance Bank already had implemented internet banking. Still, it is not widely used among its customers due to inconvenience 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 practical lotion that allows doing following operationsBalance enquiry record requestFund transfer to account numberFund transfer to mobile number authentic exchange rates information deposit interest ratesBank could spread new offerings, i.e. d o mobile marketing through the SMS-banking, which allows decreasing the amount of funds spent for marketing. Bank could also use one of the latest tools against cyber-fraud One-time word. OTPs are requested each time customer wants to perform transactions. 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 available 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, however, is also not easy to use, requires high speed of internet. pay is only withdrawn for SMS-requiries sent to the bank. However, customers do not find it useful. Therefore, we suggest d eveloping a new platform for the bank. Firstly, it will increase the safety 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 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 pensione rs to buy or order Internet transactions with lowest possible rate. pension off accounts will give Alliance Bank and additional opportunity to expand its network. 6. Recommendation (Functional strategy)The structural 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 write up/Finance realize serviceable 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 compactInsurance CompanyGeographic expansionSMS Banking subvention accountMarketingThink of appropriate way to deliver this message to customers omen efficiency of these alliance put on Push marketingThink of appropriate way to enter insuran ce market practise Pull marketingContact local advertising agency to plan their marketing campaign for submission 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 carry new personnel for new companySelect and send their specialiser to the new market carry new local people for different positionsTrain the local personnelHire appropriate IT specialistTeach marketing team the usage of the technologyAssign a team from existing supplyR&DMake research before the implementation of allianceMonitoring the efficiency of alliance expert leaderResearch about current market on insurance industryTechnological 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 fol lowerTechnological followerAccounting/FinanceCreate pro-forma statementFind 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 equity 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 responsible f or 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 showing the geographic type of organizational structure. General passenger car of both country branches will plangency 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 matrix types of organizational structure. It shows that implementing our recom mendations 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 pass 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 geographic 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 exponentiation 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 come up 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-busine sses-to-start/ Clardy, A. (2013). Strengths vs. Strong arrangement 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 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 Faced 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_kaz ahstana