Analysis and Development Strategy of HSBC Bank

Introduction

In todays world the competition is getting intense in all the fields especially in the world of business. If all the organizations have to run in the competition and to achieve the success every organization has to follow the approach of strategic management. Different approaches have been guiding the industries to get the most out of the opportunities and to face the challenges which are quite common in the environment of business. The strategic management approach of any organization is mainly to help sustain and maintain the strengths of the organization and to help in achieving the goals and objectives of the organization. The main aim of this assignment is conducting an analysis strategically taking example of an organization. Different tools of the market like porter’s Five Forces Analysis and PESTLE will be used here. Also used HSBC competitors by using of SWOT analysis.

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 Overview of HSBC Bank

HSBC is well known to everyone as one of the largest banking services and financial industries in the environment. The headquarters of HSBC is located in London and has got networks at international level where there are more than 10,000 offices. These are located in more than 82 states in Asia, Europe, America, Middle East countries and Africa. HSBC Company has got approximately 200,000 shareholders in more than 100 countries. The network is connected by the use of technology and internet by which the company is able to provide a good range and also been able to reach financial services which also includes banking services in investment, commercial, financial services which could be personal and other services. HSBC believes in a philosophy which gives importance to principles and values.

Strategies used by HSBC

For HSBC to achieve success and to gain the advantages in the competition, it has been using various strategies. It has used one of the strategies called as ‘Managing for Growth’. This has helped for the company to develop more and has also helped to strengthen the organization. As the company has set up its main objective as to lead the banking and financial services, the organization used the strategy which tries to help and maintain the top position in the market.

HSBC was using the strategic HRM which gives comprehensive and intense values for the employees. If the employees are motivated and productive, they help for the organization to reach its goal. Also the company has implemented the relationship management between customers and the employer in order to make relations with the customers everywhere in the world. The main aim of CRM is to ensure that organization is all the time attached to demands and needs of the customers. By using the internet and information technology, HSBC managed to reach the customers all over the world and also given them satisfactory and quality services.

HSBC used strategic management in order to make sure that the business will help them to gain profits at local level and at international level. The company is well aware that possessing a good name in the industry will always help it to become more pleasing by the customers.

They also believed in implementing a responsibility at corporate level which helps to recognise the accountability to the customers. The organization makes sure that the principles of conduct are always aspiring the employees.

The HSBC business strategy focuses on the following customer groups. They are

• Private Banking
• Personal Financial Services
• Commercial Banking Services
• Corporate Sertvices
• Investment Banking
• Markets

To make sure about the demands of the clients and customers, HSBC also used other strategy for each of the customer group. The HSBC had a perception that with effective management, the external and internal reports of the customer group, the customers will be more satisfied. The other strategy used by HSBC is called as Branding. This is considered as one of the important strategies used by HSBC. Because of this, the organization managed to reach all the customers across the world and also managed to lead the position in the business market.

Competitor’s Analysis (SWOT Analysis)

Strengths

The rivals of HSBC were able to meet the needs and demands of the customers across the world. By using the internet and information technology, the HSBC competitors may use all the resources for development of new service and products which the customers would like. Apart from that the combining of the large companies were considered as one of the HSBC’s strengths. Their strength also lies in possessing image of a brand organization and leadership in the market.

Weaknesses

Lack of resources is considered as a weakness in the rival company of the HSBC. Because of this the organization will not be able to maintain the advantage in the competition. Also the HSBC rival companies lack the ability in order to reach number of customers due to the barrier of distance. Lack of good and effective management is also one of the weakness of the HSBC competitors. They may also have some weakness in view of poor marketing approach and the image as brand organization. Some of the small companies may have a weakness to gain loyalty of the customers.

Opportunities

• The HSBC rival companies may have the following opportunities.
• Favourable and productive conditions in the market.
• Altering the regulations in the market regarding competition.
• To build up good relationships between the client and the customer.
• To use the advanced technological support.

Threats

• HSBC rival companies have also been affected by some of the threats in the market. Some of them are as follows:
• Not so favourable conditions in the market which could set as an obstacle for the position of the company and to gain the advantages.
• When there are new entrants and new businesses which could give more competition for the organization.
• When the business runs slow compared to others.
• Because of the revision of the regulations of the government and policies and the changes in the technology.

There is no doubt that the environment of the market is very much complicated. The organizations have to consider a number of factors which are mainly dependant on the new settings and trends in the market. Most of the industries tend to use distinctive and a unique strategy to be able to cope up with the competition. A number of ways have been adopted by the companies on how the management will be able to build up a strategy. This has to be constantly analysed and evaluated and has to be updated in relation with the changes happening in the market.

HSBC is well known to be using a number of strategies in order to provide customers needs and demands. Critical analysis of the market has proven that this company has grown more than its competitors just because of using the strategies in order to be connected with the customers. If any company chooses the unique and correct strategy, there is a high chance of the organization to achieve success and reach the organizational goals and also to stand as a leader in the market.

Task 2

Vision, Mission, Objectives and Measures

Managing for Growth

HSBC maintains a strategy to grow which is used in various ways. An important part of HSBC to grow is acquisition.

To focus on enhancement of HSBC revenue culture of generation.

To develop the brand further

To maintain cost strategically

 To maintain a good risk stance in the market

To invest more in the people

Following the strategy of HSBC, the customers tend to remain at the centre using this special strategy, at five customer groups worldwide. Also HSBC maintained to position itself as world’s leading bank in order to approach every country mixing up the knowledge with the local and international.

The proposition of the customers will be calculated using a spectrum of intense management relations and other services. Taking HSBC as a whole it will take concentration on activities on the areas where the growth and mass are found out.

The strategy of HSBC is mainly focused upon the customer groups which comprises of of the following services.

Personal Financial Services which also includes Premier for HSBC.

Consumer Finance

Commercial banking which includes both medium and small enterprises and also includes Middle Market enterprises.

Investment and Corporate Banking

Private Group Banking

The management covers most of the country, Europe, America, Asia and also the Middle East countries.

Enhancing Products

HSBC has enhanced some of the products those are important to certain group of customers. Of those some are managed and coordinated with special interest. Especially cards are enhanced by exploitation of the experience and the platforms which the Household provided. The cash management considers the international and scale including the Funds administration, Insurance Management of Assets and also benefits for Retirement.

These sorts of enhancements will often help the group to make sure that the company will have the required capability to be able to satisfy the customers especially in certain cases where the products are often for sale at international level and to make use of the expertise of the product.

Using Different Marketing Tools to do Analysis.

As it has been already mentioned the HSBC organization is analysed by use of certain tools of Marketing. The Analysis used for this is PESTLE Analysis and the Porter’s Five Forces Model.

PESTLE Analysis

Political Aspects

There are certain rules, policies and regulations that have been formulated which serves the purpose of protecting the organization. These policies and procedures are designed by the respective governments where they are been operated. HSBC managed to adhere with the policies which were formulated by each of the governments to ensure that the organization can operate the activities of the business effectively and successfully. In addition to that the organization also designs its own strategies over the other government limitations and restrictions.

Economic Aspect

As well known to everyone as the largest and leading company in regards to finance and banking, HSBC achieved success and stability in the economic status. Even though HSBC faces dangers from various parts across the globe, the management makes sure that they will be able to overcome those problems and always tries to maintain the good economical conditions.  

Social Aspect

The situation in the society effects the HSBC organization where they are operated. Inspite of this the company tries very hard to ensure that all the societies are given same opprtunities in order to take advantage of the given resources from the company. The organization adheres with the society which they belong to have good relation and reputation.

Technological Aspect

The company has been making use of the advanced technology. It clearly depicts how the company has been operating since last few years by taking advantage of the Information Technology. With this the company has been able to reach the customers across the globe. This has helped to be aware of the latest things in the market. It has also helped in improving the operations and the productions.

Legal Aspects

The policies, procedures, regulations and the rules formulated to protect the company by different governments at local and international level always allow the organizations to be more careful in view of their business activities. In order to avoid such problems the HSBC makes sure that all the actions are to be legally proceeded and are maintained at high standard level.  

 Environmental Aspects

The Environmental protection is an important aspect which is considered by most of the businesses. If this is not given importance there is a chance of problems arising in the society. To avoid such problems HSBC has developed a strategy to protect itself and to adhere with this need. The company also tries to participate in many campaigns which are meant to be for protection of the environment. It also sponsors some of the organizations which have this sort of interest in environmental protection.

 Porters Five Forces Analysis

This analysis mainly explains the aspects of the external environment of the organization. Quite often these factors are able to affect various organizations in regards to competition. These are considered as the forces which drive the competition, as they ensure that the business is generated with the correlation of five different factors. These factors are as follws.

Rivalry/competition among the industries

Buying the power of the customers

Power of the supplier

Threats that could occur by new entrants

Introduction of substitute product or services in the market

With a clear understanding of above factors, the company manages to build up the strategies to achieve success.

Force 1: The Intensity of Rivalry

HSBC is said to have many rivals in the financial and banking sector. The amount of the rivalry has enabled HSBC to use different strategies which are very effective and helpful to maintain the lead position within the market. When its rivalries tend to improve their capabilities, HSBC managed to develop a strategic plan to ensure that they should be considered as the first choice by the customers in the banking industry.

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Force 2: The Threat of Entry

HSBC has the possibility of facing number of threats because of achieving many profits in the market. Having the threat from new entry enterprises can break an organization like HSBC. In regard to this, HSBC has managed in establishment of certain barriers to make sure they lead the market. The HSBC also makes use of the brand image to ensure the stability of its customers’ loyalty.

Force 3: The Threat of Substitutes

In the market there is always introduction of new services and products by the competitors. The substitute products could give a threat to the profits of HSBC and makes the organization to work even harder to maintain its top position. The HSBC strategy has focussed on 4 segments which have helped to meet the demands and needs of all the customers which decreased the influence of any other substitute products.  

Force 4: Buyer Power

The buyer power is considered as one of the most important forces which could affect the value’s occupation which has been established by the organization. The size and the concentration of the customer are the important determinants of the force. HSBC managed to satisfy its customers effectively which has also helped the company to gain the loyalty and satisfaction of the customers. The HSBC strategy helped the organization to lead the world in the banking sector.

 Force 5: Supplier Power

The buyer power is reflected by the supplier power. When the force is analysed in view of this, the focus is mainly on the size and suppliers’ concentration which could also be related to the customers. The differentiation degree is also given focus about the materials which are supplied by the organization. The company can be able to charge the market which they target according to the price difference for all the buyers. It is implified that the supplier power describes the audience.

VISION:

The vision of the HSBC Company is to stand as the greatest and special group in the banking sector which has been driven by the commitment to the values and core philosophies.

‘Enabling Excellence through Partnership’

The strategic objectives are achieved with the partnership from the associates and customers.

MISSION:

HSBC always provides a comprehensive range of services in financial sector, private finances services corporate banking, commercial, investment and private banking, and also other activities by the maintenance of network at local and international level, with the help of advanced technology and the rapid growth of e-commerce.

The company aims to provide quality service in a timely fashion and cost efficient way being in line with the standards of the company.

Strategic intent and mission/vision

Purposes of the firm

The intent of HSBC strategy is to be the customers’ first choice in the financial and the banking needs. The products and the services have been designed to give convenience to its customers.

What goals to be achieved?

Providing quality services in the banking and financial services to the market which they target whilst giving value to the employees of the company, its management and the shareholders is the main aim of HSBC. The company also aims to reach all the customers across the globe by the online activities and the websites.

Any formal mission/vision statement?

The mission statement of the company is being the greatest and specialized group in the banking sector which is run by a commitment by giving values and adhering to its philosophies. The company aims to lead the market and deliver a great service based upon the outstanding services, sales and solutions. In addition to that the company aims to achieve long term, superior and returns which are ethically based for the shareholders of the company, and to build a performance team which is motivated and which performs well. Also aims to create an environment which could be rewarding, challenging and convenient for the employees.

Task 3

Strategy implementation

a.    How does the firm implement the chosen strategies?

An intensive planning helps the firm to implement a strategy which they chose. This is done with the help from management and the leaders. In addition to that the efficient and effective leadership in the organization gives a responsibility to the team and the management networks as the total capacity of the performance in terms of activities and development is based upon it.

How effective?

On the basis of the analysis, it is understood that implementing the HSBC business approach has been quite effective because of the advantage in the competition and its position in the market. Making use of the planning helps to monitor the implementation strategically.

Evaluation of action plans/tactics (key actions)

The evaluation of the plans of HSBC has helped the company to lead the market. By taking this information, the organization should be able to continue to find an innovative program and relate effectively with the other companies in the market. The company also tends to maintain good relationships with the customers and the shareholders. This is done effectively and efficiently by the company for the operations to be done continuously. The company conceptualizes and implements approach strategically so that it will be able to set certain trends in the industry of finance and banking. Apart from development of the strategies, the company also focuses on building the customer and employee relationships. Customers are given high priority as they are the main reason for any business to be alive in the market.

The HSBC strategic contains of eight imperatives.

Brand: The hexagon symbol of the HSBC is one among the leading brands for the experience of the customer and the social responsibility at the corporate level.

Personal Financial services: the growth in the markets and with the help of different channels at appropriate timing to make HSBC the strongest company and to play across the globe in personal financial services.

Consumer Finance: to extend the reach of the business to already existing customers with a wide range of products and penetrate into new markets.

Commercial Banking: to make the most out of the company’s international base for the customers with effective management of the relationship and more improved offerings in all the market in all the groups.

Corporate Markets and Investment Banking: to increase the growth with the enhancement of the markets and capabilities focused on the service of the client in certain sectors where the company has critical strength and relevance.

Private Banking: to serve the highest value of the group and the personal clients of the company across the world.

People: HSBC tends to attract the people, motivate them and develop them helping the company to achieve success. and

TSR: To fulfil the TSR target by achievement of strong performances regarding earnings of the growth of the share.

The HSBC has developed to be the leader among the banking sector. It is the largest bank in the Hong Kong and in China it is the largest and first foreign bank. It gives importance to the value of the shareholders and also believes in the talent of the employees working for the company. The company wish to stay on the top facing the competition, maintains a good brand image, well established customer loyalty well controlled of the costs of the operations and the ongoing adjustment of the business to cater for the needs of the customer. By this success it was quite useful in evaluating the development of the strategy of the company. This is mainly to examine the strategies of the HSBC to be aware of the mission, vision and in turn to be able to apply for the developmental strategies for other organizations.

Global Development Strategy of HSBC

By end of year 2003, the company has launched the program called ‘Managing for Growth’ which was a strategic plan to provide the organization with a blue print for the growth. This helps to build up company’s strength and it addresses about the areas where the need for more improvement is required and which could be achieved.            

The core values of the company is integral for the strategy in order to communicate with the customers, employees, shareholders and to compromise on the long term, client relationships, increased productivity with a good team work, ambitious, to be international in its outlook and the character. Also there have been several elements in the achievement of the development of the objectives which includes the speeding up of the growth of the revenue, development of the brand, improving the productivity and maintainance of the risk management.

Development of the employees’ skills is given so much importance by the company to make sure that all the employees can understand how they can contribute for the achievement of the objectives set.

Strategic Marketing Perspective

A number of concepts are important taking into concern about the strategic marketing. These are important as they are the ones to determine the strategies of the company. These include the determining of the needs of the customers, focusing on the development of the product and the exchange happening between the consumers and the producers in the market. These concepts have become the basis of HSBC and helped to develop the strategies and to maintain the reputation across the world.

The very first strategy is to make the customers to be at the heart of the company’s strategy. They have got specific approaches for all the groups of the customers which are located in North and South America, Europe, Asia and Middle East countries. The second thing is to maintain the position as the local bank in the world which helps the company to approach all the countries and by mixing up the knowledge across the country. This is considered as a good approach as all the places are different from each other with different beliefs and cultures. The last approach is for the company to concentrate certain activities on the places where the critical mass and growth are located. Some of those activities are outsourcing strategy globally. The company managed to establish in all the call centers in order to provide the services in relation to the sales and checking the accounts. The main aim of HSBC in outsourcing is to focus upon the needs of the customers. The call centers take the responsibility to answer any queries from the customers.

As a response to the development of the product, the company has continued in enhancing certain products which were very important for the customer group offering of the company and some of the products to be managed at a global level. Some of these products include like HSBC cards, Management of the cash, insurance, Management of the Assets, Funds and Custody Administration and benefits for the Retirement. Also the improvement of the HSBC products makes sure that the company will have the best ability and will be able offer a great service to its customers.

The development and the improvement of the product is very important as it serves as a good source to gain profits and to keep up with the trust of the consumers. The company will be able to attract even more customers whilst maintaining the old ones as well.

With the improvement and development of the products, the company will be able to deliver the growth by enhancement of the culture which involves four aspects. These include the strengthening of the use of marketing as a key tool of management, which rewards the performance of the revenue, by focusing the investment on the businesses and localities where there is high potential for growth which can be achieved continuously when these aspects are implemented in an effective and efficient manner in the market.

       The brand image of the company has been affecting the relationship between the consumers and the producers in the market. Everyone knew that maintaining brand image brings success to the organization and HSBC was equally strong to get that image. It managed to accommodate the variety at the product at local an international level. This also helps in establishment of a reputation, which is quite essential for the company to be familiar and for the market to react favourably with the company. The brand image helps to hold associations which are strong, favorable and unique. It also helps in tying up with stronger companies and gain reputation globally.