HSBC BANK STRATEGIC ANALYSIS

Introduction

It is undeniable that the competition in the business world is very demanding and vigorous. In order for different organization to compete effectively and successfully such companies must be able to use strategic management approach. Accordingly, various management approaches are guiding industries relative to the opportunities and challenges which appears within the contingent business environment. The strategy and the management methods of each company are accountable for sustaining and maintaining the strengths and survival of the organizations. One of the responsibilities of the management systems implement in an organization is to be able to achieve the organizational goal of the organization. Principally, the main objective of this paper is to conduct a strategic analysis of an organization. In this report, different marketing tools will be used including PESTLE and Porters Five Forces Analysis. This paper will also analyse the competitors of HSBC using SWOT Analysis.

Overview of HSBC Bank

HSBC is known as one of the largest financial and banking services industries in the global environment. The company is headquartered in London and has an international networks which composes of over 10, 000 offices in more than 82 states and territories within Asia-Pacific Region, Europe, United States of America, Africa and Middle East. HSBC Holdings Plc are regarded to have around 200,000 shareholders in over 100 nations as noted in listings in countries like New York, Bermuda, Paris and Hong Kong. Because of the global network connects by the implementation of advances technology

like the internet and information communication technology, the company has been able to provide an intensive range and reach of financial services which includes commercial banking, investment banking and market personal financial services, and other banking and financial products and services. The business philosophy of HSBC gives important to values and principles in all aspects of everyday living.

Strategies used by HSBC

In order to compete successfully and reach competitive advantage, HSBC has been able to use different strategies. One of the strategies used by HSBC is the managing for Growth strategy. Such strategy enables the company to grow and develop even more. The strategy has been able to build the strengths of the company and adheres with the areas which are in need of further enhancement. Since the main objective of the company is to be the leader in financial services sectors, the company uses strategy that strives to protect and sustain a leading position among their target market.

HSBC has also been able to use a strategic human resource management which provides intensive and comprehensive values among their employees. For the company, an organisation that has employees who are productive and highly motivated will help them reach their organisational goal. In addition, the company also applies customer relationship management approach so as to maintain good relation among their target all over the world. The objective of using CRM is to make sure that the company is always adhering to the needs and demands of the customers. Through the use of the information technology, specifically the internet, the company has been able

to reach different customers from al over the globe and provide them quality and satisfactory products and services.

The company also uses strategic management to ensure that all their business practice will enable them to have a competitive advantage in both local and international market. HSBC is aware that having good reputation in the marketplace helps the company in becoming more appealing in their target market. With this, part of their strategy is to implement a corporate social responsibility which will is recognises its accountabilities within the society, The company sees to it that they are always aspired with the highest principles of conducts.

The strategy of HSBC gives emphasis on four customer groups. These include, Private Banking, Personal Financial Services, Commercial Banking, and Corporate, Investment Banking and Markets. In order to make sure that the specific needs and demands of these customers and clients, the company also uses different strategy for each customer groups. The management of HSBC perceived that by effectively managing its internal and external reports for each customer segments, customer satisfaction will be achieved. Branding is also considered as one of the most important strategy utilised by HSBC. With its brand reaching customers all over the globe, the company has been able to maintain it competitive and leadership position in the global business environment.

Analysis Using Different Marketing Tools

As mentioned above, HSBC will be analysed using some marketing tools. In this regard, the company will be analysed using PESTLE Analysis and Porters Five Forces Model.

PESTLE Analysis

Political Aspects

HSBC Banking has been protected by the regulations and policies formulated by different government in the countries where they are operating. The company has been able to adhere to the policies given by each government to make sure that the company will be able to conduct business operations successfully and effectively. Furthermore, the company also formulates their own protection strategies against any governmental restrictions and limitations.

Economic Aspect Being the worlds largest and competitive industry in terms of banking and finance, HSBC, is said to have a stable and successful economic stability. In spite of many dangers that they encounter in different parts of the world, the management of HSBC sees to it that they would be able to surpass such struggles and strives to have a better economic condition.

Social Aspect

HSBC is being affected by the situation of the society in which they are operating. Along with this, HSBC tries harder to make sure that each society is given equal chances to take advantage of the resources given by the organisation. The company adheres to having good reputation and relations in the society that they belong.

Technological Aspect

The emergence of information technology and internet affects how HSBC has been operating in the past years. The company adopts different IT/IS systems and used internet to reach their customer all over the world and to know the latest trends in the global business. Aside from these, the company also uses facilities which helps them improved their productions and operations.

Legal Aspects

The policies and regulations provided by the government, both local and international allow the company to be more cautious in their business actions. To avoid problems in line with their business practice, the company sees to it that all their actions are legal and aspired to highest standards.

Environmental Aspects

Environmental protection is one of the most essential aspects to be considered by many businesses. If an organisation will not be able to consider the environment in their

actions, there is a possibility of facing problems within the society. In this regard, HSBC develops environmental protection strategies to adhere to this worldwide need. In addition, the company are always trying to join in environmental protection campaign by sponsoring some organisations having this type of advocacy.

Porters Five Forces Analysis Porters Five Forces Analysis highlights the aspects in the external environment of an organisation. These factors have the ability to affect different organisations in terms of competing (Porter, 1980). Accordingly, these forces has been defined as factors that drive competition, making sure that the competitive business will be generated by the interaction of five various factors on a firm. These factors include rivalry among industries, buying power of the customers, supplier power, the possible threats of new entrants and the threat for substitute products or services within the market. By merely understanding the context of each force, enables the company to have important insights that will drive them to implement effective strategies to outgrow their competitors.

Force 1: The Intensity of Rivalry

It is said that HSBC has many rivals in the banking and financial sectors. The degree of rivalries among these firms enables HSBC to use efficient strategies to maintain its leadership position in the market. Furthermore, because of the capabilities of other rival companies, HSBC develops strategic plans to make sure that they are always be the number one choice of their customers in banking and finance industries.

Force 2: The Threat of Entry

With the potentials of having high profits in this kind of industry, HSBC is subject to several threats of market entry. The threats of these new entrants sometimes make or break an organisation like HSBC. In this regard, HSBC has been able to establish some entry barriers to ensure that their competitive advantage. The company also uses strong branding images to make sure that their customers will remain loyal to them.

Force 3: The Threat of Substitutes

HSBC is also aware that their competitors will provide new products and services in the future. The threat that these substitute products gives to HSBCs profitability allows the company to work hard to sustain its position. Through the strategy of HSBC in focusing on four different customer segments, the company has able to provide needs of each customer group which lessen the impact of other substitute products.

Force 4: Buyer Power

Accordingly, the buyer power is noted to be one of the two important forces which affect the occupation of the value established by an organisation. Herein, the vital determinants of this force include the size as well as the customer concentration. It can be said that HSBC has been able to manage their customers effectively which allows the company to gain customer loyalty and satisfaction. The strategy used by HSBC enables them to become the world leader in banking and financial sector.

Force 5: Supplier Power

It is said that supplier power reflects to the buyer power. In this regard, the analysis of this force commonly focuses on the significant size and concentration of suppliers which is also relative to the competitors. It also focuses on the degree of differentiation in the materials being supplied (Porter, 1980). It can be said that HSBC ahs the ability to charge their target markets different prices in accordance with the differences in the price formulated for each of the buyers. This usually implies that the audience is described by high supplier power. Competitors Analysis (SWOT Analysis)

Strengths

The strengths of HSBC rival companies include the ability to provide the needs and demands of different customers all over the world. Through the use of information technology, competitors of HSBC may outgrow the company by using all its resources to develop new products and services that will be appealing for the customers. Moreover, the alliances of larger organization may also be considered as one of the strengths of HSBCs competitors. The competitors of HSBC may also have strength in terms of having powerful brand image as well as strong market leadership.

Weaknesses

One of the weaknesses of the rival companies of HSBC is its lack of resources to sustain their competitive advantage. In addition, rival companies of HSBC may also lack

the ability to reach different customers because of distance barrier. Poor management systems may also be considered as one of the weaknesses of competitors of HSBC. The rival companies of HSBC may also have weaknesses in terms of having weak marketing approaches and brand image. Some rival companies, like those small enterprises may have weaknesses in gaining customer loyalty.

Opportunities

The opportunities of the rival companies of HSBC may include the following. Major productive and favourable market conditions. Alteration in line with regulatory or competitive market environment Changes and advancement of technological aspects and enhances buyer/supplier relationship.

Threats

Rival companies of HSBC are also affected by different market threats. These threats may include the following: Major adverse and unfavourable conditions in an indust rys market settings representing obstacles to the companys desire competition position and advantage. The threats of new entrants or new industries which will compete effectively in the market.

 The slow growth of the market in which the industry belongs Rapid technological changes and the existence of new revised policies and government regulations.

Conclusion

The marketing environment is without a doubt very complicated system. Companies need to be more considerate of many factors that will have to be integrated based on the trends in the market place. In general, a unique and distinctive strategy is highly adopted by most industries in order to have a competitive advantage in the business environment. There are many ways on how management can construct a certain strategy. This however, needs to be constantly evaluated and updated based on the constant changing market trends.

Being the leader of the banking and finance industries, HSBC is said to use different strategies that will meet market needs and demands. Analysis shows that HSBC has outgrown its competitors because of the strategies that they used which adhere to the current situation of the market environment. All in all, it is said that if the company has been able to choose the most appropriate strategy, there is a greater possibility of becoming a world leader in any industry,