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EconomIcs ProJecT

EconomIcs ProJecT. === Integration. Introduction. I n this project, we are going to present the concept of integration. We will use THE BANK OF CHINA as an example to illustrate this concept. Are u ready? Let’s start the journey!!!. -The 1 st station. Type of integration.

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EconomIcs ProJecT

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  1. EconomIcs ProJecT === Integration

  2. Introduction In this project, we are going to present the concept of integration. We will use THE BANK OF CHINA as an example to illustrate this concept. Are u ready? Let’s start the journey!!!

  3. -The 1st station Type of integration What is horizontal integration??? Horizontal integration— Horizontal integration takes place when firms producing the same product or at the same stage of production combine together.

  4. Bank of China VS Integration (Ⅰ) Bank of China enjoys a leading position among local banks, with a broad customer base and an extensive branch network. It is also one of the three note-issuing banks in Hong Kong, and assumes the role of Chairman Bank of the Hong Kong Association of Banks on a rotational basis. The ultimate controlling shareholder is Bank of China.

  5. Bank of China VS Integration (Ⅱ) In order to enlarge the scale of production and produce a larger output, Bank of china integrates with other banks. Wait... Wait… how did they integrate?

  6. -The 2nd station Method of integration Merger— Amerger occurs when a merging firm purchases all the assets of a merged firm. After the merger, the merging firm grows bigger in size but the merged firm is dissolved.

  7. Bank of China VS Merger Do u remember the news… Establishedon 1 October 2001, Bank of China (Hong Kong) Limited was a Hong Kong incorporated licensed bank which combined the businesses of ten of the twelve other banks in Hong Kong originally under the Bank of China Group. Let me show u who are they….

  8. The ten mergered banks • Bank of China Hong Kong Branch • The Kwangtung Provincial Bank • Sin Hua Bank Limited • The China & South Sea Bank Limited • Kincheng Banking Corporation • The China State Bank Limited • The National Commercial Bank Limited • The Yien Yieh Commercial Bank Limited • Hua Chiao Commercial Bank Limited • Po Sang Bank Limited

  9. -The 3rd station Motives For integration 1.Benefiting from economies of scale As the size of Bank Of China becomes bigger, integration helps to enjoy the scale of production. The bank then benefits from economies of scale. Its average cost will decrease.

  10. 2.Closing down some plants to reduce loss Bank of China is planning to close some plants to reduce loss. It can save labour costs as less manpower is needed. Inefficient plants can be closed to save rental and equipment costs.

  11. 3.Turning competitors into partners Banks are direct competitors as they provide similar services. Through horizontal integration, it often enables BANK OF CHINA to turn competitors into business partners.

  12. Conclusion: The establishment of the Bank and their decision to register in Hong Kong are significant in the development history of the local banking sector. It will certainly sustain and enhance the stability and growth of the local financial markets and the role of Hong Kong as an international financial center. Hence, the restructuring project of the former Bank of China Group has received the encouragement of the Government and the support of the people in Hong Kong.

  13. Do u guys enjoy the journey? Thank you very much! The enD

  14. By: 5A Michelle Yau 5D Antonia Cho Janet Yu Maria Tai

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