Merrill Lynch Bank

1. Given the changes that have occurred in the international capital markets during the last decade, the strategy does Merrill Lynch in terms of international expansion makes sense? Why?
In a few decades the world has become a smaller place especially in the communication skills and ability to conduct business abroad. With the emergence of new management and control has become easier than ever, which allows companies to penetrate global markets present their products and services in different countries. Not only technical assistance gave such an increase for multinational companies, but also international policies of countries that were closed before foreign investment. For countries such as Japan and the former Soviet Union have opened their markets for large companies in the United States and other economically developed countries.

2. What factors make Japan a suitable market for Merrill Lynch to enter?
Being the leader of Merrill Lynch in the States and the acquisition of major fund companies, mutual economic giants such as Britain and Canada have at least theoretically to enter the Japanese market. On the other hand, it did not take into account the characteristics of purchase and regulations on the financial services industry. However, the removal of many restrictions and allow the Japanese to buy foreign bonds and shares in the mid-1990s had adapted to the Japanese market entry and establishment of foreign capital. In addition to their government understood the need for new "blood" in the economy that could be donated by foreign companies to increase competition and make more money.

3. Review Merrill Lynch in 1997, tucked into the Japanese market for private customers. Pay special attention to the timing and scale of entry and the nature of strategic commitments Merrill Lynch in Japan. What are the potential benefits associated with this strategy? What are the costs and risks? Do you think that the compromise between the benefits and risks and costs of common sense? Why?
The first attempt at Merrill Lynch to enter the Japanese market has failed as their market was not regulated to accept international players. In 1997, however the situation has changed under the WTO agreement to allow more foreign companies to sell financial services to their domestic investors. Regarding their previous experience, they were reluctant to enter the Japanese market, but it was clear that this time things have changed with the opening of the market and huge amount of assets held by Japanese households have been too tempting miss this opportunity. It was the perfect time for Merrill Lynch, there were a few other competing foreign companies and their prior experience in the private client market have made it even more appropriate. The failure of Yamaichi Securities in 1997 was an ideal occasion for corporate America to begin to penetrate the Japanese market. They first considered a joint venture that would allow minimal costs as they had a chance to use the existing distribution system of a bank known Japanese. On the other hand they do not see their presence in the market because of the company in the long term and they are reviewing the agreement and have been fortunate to hire workers to buy Yamaichi branches in 1997. Merrill Lynch won once in this situation when establishing their companies' position on the market without reports and coordinate their movements with another Japanese company. The risk they took when working on their own paid very quickly and significantly to their advantage, in an immense value of assets held by the company.

4. The collapse of stock prices in 2001-02 led Japanese unit of Merrill Lynch losses. In retrospect, the Japanese expansion was a costly mistake or simply did the company get hit by macroeconomic policies.