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Running Head: SANTANDER

 

 

The Case of Santander Bank and its Incredible Investment Ventures: Discussi

 

 

 

The strategy used by Botin to buy off large banks in South America’s land was definitely a risky decision on his part; however, the fact that one of them was an out-of-pocket expense of only about 35% ($1.5 Billion out of the $3.5 Billion that it cost to buy in Brazil) definitely shows that it was not a major one. Botin understands that having all these franchises costs, but he also sees the potential in each bank in making billions of dollars annually (he himself only makes millions, under 10 annually). The risk of spreading will definitely create value, however.

 

Value comes with investment. If his foundational operations management is working everywhere else, then buying and transforming these South American banks, and other international ones, will not be a difficult task for Banco Santander. To get these banks operating satisfactorily and with great returns, the same organizational governance must be used in each new franchise or bank purchased. This is exactly what Botin does and this is why we can predict that there will be a valuable return for the shareholders. The creation of value will be through the activity of their money. This will ignite an ability to make even more money.

 

The acquisitions will make money after the inside and operational levels are worked with and transformed to fit the culture instilled by Botin throughout the years, as it is obviously working. The shareholders need to believe that it is an investment and much like mutual funds, they need to invest the money (which means lose the money), and then earn capital on that money (gain double or triple of originally invested capital). Hence, these bank purchases are definitely risky but because the business is very much aligned with automatic success (if well managed) and monopolies, then we can predict a good return on them.

 

Should Banco Santander increase its presence in the U.S. market? Certainly, it should. But, it should take possession of the market in Britain first, and then enter with further dealings in the U.S. Why? Because if the Botin family is able to conquer business in the British market, then it will almost a certainty (with some obvious years of risks) that it will be fine in the U.S. The customer in Britain is very much like the ones in the U.S. Much like his current customers is either traditional, old-school or just simply unaware of the change of times, Britain has a certain trend with their own consumers. These just happen to be very much like the insanely U.S. capitalists.

 

Assuming that Banco Santander decides to increase its presence in the U.S. market, it should do so by first coming to terms with what their clientele will need and making sure it can afford to do so at the highest standards. It will also need to invest a lot more money to make sure these banks are running up to standard in the region (and in the capitalist game). It needs to be on top of its marketing strategies, maybe making a Launch Party or something to the likeness of Hollywood to be different from its competitors that is something that Botin and whoever he appoints to manage the Americas will decide.

 

Inspiration, acquisition, expanding, innovative, and one of the things I most admired about his way of doing business: having his daughter work for someone else before becoming part of the team. The latter traits did make Botin most successful though. The inspiration from his father, the acquisition of different arenas, the expansion of his money into different, international circuits; and, the innovation of new developmental services such as loans and small home mortgages is what makes him successful until today. Even if his shares are at a low point today, they will definitely rise because money will multiply itself as soon as it is risked. This is something common for Botin.

 

Internal governance mechanism of ownership concentration in Banco Santander has definitely worked. The ability to maintain their investments, to continue profiting from them and to continue running profitably all over the world shows that the bank definitely has a niche understanding of the field and an amazing ability to govern itself. Corporate governance in Santander must be organized, independent from its departments, agreed upon and read about by all members of the company, and definitely there is a level of familiarity and comfort within it. This makes them work together and maintain its long term viability in the market.