ScotiabankExecuting Strategy Globally Scotiabank is a multinational financial services provider and one of Canada's most international banks. Established in 1832 in Halifax, Scotiabank offers a broad range of financial services including personal and commercial banking, wealth management, and corporate and investment banking to more than 25 million customers globally. For Scotiabank, its historical and future success is predicated around three key fundamentals. A committed team of more than 97000 employees who work together to offer customers expert advice, guidance, and solutions relating to financial services and wealth management. A well-diversified and balanced portfolio of products and services customized to customer needs globally. A clearly focused strategy that revolves around the pillars of customer service, leadership depth, eective resource deployment, digital transformation, diversied business mix, and efficient and effective organizational processes and cost management. For Scotiabank, strategic success lies in its growing global diversfcation, which is designed to minimize potential revenue and earnings volatility associated with any one specific region of the world. Recognizing that economies will, most likely, experience uneven growth in the mid-to-longer term, Scotiabank will continue to look internationally for growth, particularly in those markets that possess young, under-banked and growing populations supported by a well-educated workforce and a growing middle class. One such aractive area that has been on Scotiabank's radar is the Pacific Alliance countries of Mexico, Peru, Colombia, and Chile, coupled with a secondary emphasis on the Caribbean and Central America. This regional area (Pacific Alliance) possesses more than 224 million people, has a combined GDP of approximately $2 trillion, and represents the eighth largest economy in the world. The recent acquisitions of Cencosud S.A.'s financial services in Chile, and a majority stake in Banco Bilbao Vizcaya Argentaria S.A.'s retail business in Chile, are good examples of Scotiabank's selective acquisition strategy to further grow its international presence in this region. The Pacific Alliance, where Scotiabank is the fourth largest banking operation, now makes up 70% of the bank's international profile, which accounts for 31% of its total business lines earnings and is supported by a customer base of more than 15 million customers. Latin Finance recognized Scotiabank as the 2018 bank of the year in Latin America and the Caribbean. Although focused internationally, this does not mean that Scotiabank intends to decrease its focus on Canada, which continues to represent approximately 50% of the bank's earnings (and 59% of its asset base). Now the third largest bank in Canada, and one of the 25 largest in the world (10th largest in the Americas), Scotiabank intends to continue to build on its solid footing in Canada. In fact, two recent key moves in Canada, the $2.6-billion (CAD) acquisition of MD Financial Management, a wealth- management company headquartered in Toronto, and the $950-million (CAD) acquisition of Jarislowsky Fraser Ltd., Canada's third-largest active money manager (located in Montreal), point to exactly that (both acquired in 2018). This follows earlier moves to further ingrain itself in the Canadian marketplace, such as the rebranding and launch of Tangerine (formerly ING Direct Canada, acquired in 2012), and a partnership with Canadian Tire Corporation to develop a cross-promotions program that will enable Scotiabank to oer new and expanded financial services to Canadian Tire customers. Underpinning this relationship was Scotiabank's acquisition of a 20% stake in Canadian Tire's financial services business (2014), as well as an additional $2.25 billion in credit card receivable financing. For Scotiabank, these types of deals offer an opportunity to attract new customers and to tap into the lucrative credit card business. Canadian Tire's financial services division manages an estimated $4.4 billion in receivables and has 1.8 million active customers. For example, in 2014 Scotiabank estimated that more than half of its new customers in Canada have come as the result of its active partnership expansion and indirect marketing channels strategieswhich, in addition to Canadian Tire, include such successes as the SCENE program with Cineplex, sports partnerships (Tangerine is now the exclusive bank of the Toronto Raptors), and expanded brokerage and auto-lending channel intermediaries. Going forward, Scotiabank's strategic focus remains unchanged. At its core, it intends to maintain and grow its presence in Canada while selectively looking to expand its presence in high-growth markets, particularly within the Pacic Alliance. The key pillars behind its growth ambitions lie in increasing its customer service focus, further enhancing the depth and diversity of its leadership, and continuing to reinvent the way it does business in order to beer serve customers while reducing structural costs. The key to this strategic focus lies in what it perceives to be opportunities in the areas of wealth management and insurance business growth internationally, increasing emphasis on automated transaction services and indirect banking (Tangerine), and accelerated emphasis on leveraging the organization's expertise in electronic transaction and credit card management. Having said this, Scotiabank does not intend to pursue growth just for the sake of growth. Part of the strategic decision-making process within any business is to assess the success of a company's current portfolio in addition to looking for new growth opportunities. At Scotiabank, CEO Brian Porter and his team are doing just that. In overseeing Scotiabank since 2014, Porter and his management team continue to rene Scotiabank's global reach and mix. This has resulted in the divestment or pending divestment of a number of businesses within its portfolio in approximately 22 geographic markets. Included in this "pruning exercise" based on growth and protability potential are banking operations in nine Caribbean countries, as well as a life insurance business presence in both Jamaica and Trinidad. Going forward, the bank's emphasis will shy away a bit from further large acquisitionsat least in the near to mid-term. Acquisitions require time to digest the new companies into the bank's operation. The value of these acquisitions lies in the ability to grow the organizations once the purchase is completed. For Scotiabank, this means a stronger emphasis on "organic" growth in order to leverage the opportunities perceived to exist within the markets the newly acquired companies serve.

Gary J. Bissonette. (2022). Business: Strategy, Development, Application (3rd Canadian Edition) [Texidium version]. Retrieved from http://texidium.com

Questions

1. How will this business strategy affect Scotiabank's decisions around the following?

a. Market

b. Resources

c. Products and Services

2. Also, what are the long and short term implications for these business objectives and strategy.