MAPFRE Co. as a Candidate for Global Expansion
The internationalisation process of MAPFRE could be a highly striking and appealing method of growing sales and profits. It could be the remedy to slow down market growth at home and a defence mechanism for MAPFRE that was under strong competitive attack. When an attack is coming from a foreign competitor, it might pay to take the battle to foreign territories, rather than fight exclusively on home territory. However attractive a global strategy might be, not all companies could survive in the global marketplace, or even need to. There is little point in pursuing a complex and costly strategy if the basic prerequisites for success were not present. If an internationalisation process takes MAPFRE’s eyes off a lucrative home market to the extent that MAPFRE loses more than MAPFRE gains, the effort is hardly worthwhile. To determine whether MAPFRE is a candidate for global expansion, answer the following basic checklist of questions:
- Did MAPFRE have the right motivation and attitude to be successful?
- Were MAPFRE’s services suitable for global markets?
- Did MAPFRE have the financial resources to sustain an internationalisation process?
- Did MAPFRE have the appropriate human resources?
- What changes need to be made to MAPFRE to support an internationalisation process?
In 2001, MAPFRE connected in a calculated partnership with Caja Madrid, the third prime Spanish saving bank, with a well-recognised existence in the Madrid area, with approximately two thousand branches. People used to say in Spain that in each town, even the smallest ones, there is a church and a branch of MAPFRE. By means of this strategic corporation, MAPFRE used Caja Madrid’s branches as its own offices and also vice versa. MAPFRE also presented its experience in Latin American countries to Caja Madrid while took considerable financial advantages from Caja Madrid.
Persistently conscious of the Chinese economic development and its market potential, MAPFRE fancies discovering a semi-virgin, vastly synchronised insurance market that is subjugated by local insurance organisations and a regulation that bounds the operating region of foreign organisations. At present People’s Insurance Company of China, Pin’An, Taikan and New China dominate the Chinese insurance market. AIG is among the few foreign companies in China. MAPFRE has opened two mercantile branches in Beijing and Shanghai. MAPFRE is no novice in the Asian market since MAPFRE has a subsidiary in the Philippines and Bahrain that have been operating effectively for almost a decade.