India I am extremely skeptical about this market. This
country probably possesses the greatest challenge in the entire region. Enticing
is the vast population (797 million) and enormous GNP ($222.5 million, both
surpassing every country in the case analysis. Perplexing is the high annual
inflation (9.8%), and the 5 year average inflation (8.2%). The political risk is
assed as fairly high, with specific comments about government instability and
corruption. In addition, 90% of the population earns less than 2,000 annually.
Conversely there is still room for market entry. Thirty percent of the existing
Diners Club card carriers are situated in the upper 3 levels of annual income.
American Express does not exist in this country. Break-Even Analysis: $2 mil +
$35 mil = 925,000 new credit card customers ƒö$65 - $25 ** (An additional $10
million to $15 million for each additional 250,000 credit card customers) ƒö=Joining
fee and annual fee estimated from Diners Club (Exhibit 9) Indonesia I also
assess Indonesia as a country I am least interested in entering. The country has
an extremely low GNP as compared to the other countries in the region ($63.4
billion), with a relatively high population. Inflation is relatively high and
the political risks is also a ¡§C¡¨, with political turmoil looming on the
horizon. Attractively, there is an above average savings rate (27.9%), a fairly
strong estimate of growth (4.2%). But like India, 90% of the population earns
less than $2,000 per year. From the outside, the market appears to be saturated
with credit cards, with American Express and Diners Club already existing in
this country. It would take considerable discussion to invest in entering this
market.
Break-Even Analysis: $2 mil + $35 mil = 435,294 new credit card
customers ƒö$110 - $25 ** (An additional $10 million to $15 million for each
additional 250,000 credit card customers) ƒö=Joining fee and annual fee
estimated from American Express Green (Exhibit 9) Malaysia This is not a country
that you correspond with financial prosperity, but several indications point to
a lucrative market with substantial growth possibilities. With a GNP ($34.1
billion) commensurate with it¡¦s population (16.9 million), this country possess
great inflation rates (2.0 %, with a 5-yrear average of only 1.6%). The middle
three earning categories comprise the largest group of the population (75%).
Only 17% of the population currently owns a credit card, with room for
considerable growth. Break-Even Analysis: $2 mil + $35 mil = 616,667 new credit
card customers ƒö$85 - $25 ** (An additional $10 million to $15 million for each
additional 250,000 credit card customers) ƒö=Joining fee and annual fee
estimated from American Express Green (Exhibit 9) Philippines I believe this
country has room for expansion in the credit card market. There are some
negative detractors to entry. A large portion of the population is in the last
three categories of earnings (82% of the population earns less than $12,500
annually). The estimated growth rate is a dismal 0.5% annually. In addition, it
possesses the lowest political and economic ranking ¡§D¡¨, with comments about
turmoil and communist insurgency. Impressively, the upper category of annual
income possesses 50% of the credit cards currently in circulation on the
Philippines. Socially, the Philippines places a great esteem on the financial
affluence, and the entry of a affluence credit cards such as Citibank, will have
great market attraction to the effluent portion of the population.
