PESTLE Analysis of HSBC Holdings

This report includes PESTLE analysis of HSBC Holdings to identify impact of various external factors on banking organisation.

Global Business
Environment

Table of Contents
Global Business Environment......................................................................................................1
INTRODUCTION.......................................................................................................................3
PESTLE Analysis........................................................................................................................3
CONCLUSION............................................................................................................................4
REFERANCES............................................................................................................................5

INTRODUCTION
This report includes PESTLE analysis of HSBC Holdings which is a British
Multinational Investment Bank to identify impact of various external factors on banking
organisation.
PESTLE Analysis
Political
This factor includes impact of political factors and government decisions make on its
operations. In this functions of the bank gets affected because of political uncertainties one of
the best example of such is Brexit. HSBC is a multinational bank and this requires that bank
identify political factors such as political deals, agreements and alliances which can affect its
long term profitability in certain country (Sanjeepan, 2017). Being a multinational bank HSBC
expose it to various type of risk at various countries. Some of the political factors which affect
HSBC are-
 Pricing Regulations.
 Taxation.
 Laws of countries related to banks.
 Tendency of local government of country for multinational and foreign organisation.
 Government interference etc.
Economic
Economy factors are those which are related to economy and monetary factors which
affect economic condition of the Bank. Such factors make significant impact on profitability
of the bank and this is why it requires that bank have adequate knowledge and strategies
related to such factors. These are, inflation rate, interest rate, Saving rate, rate of economic
growth etc.
Social
This is related with those who are customers and potential customers of the bank. This
factor makes impact on bank in the form of cultural factors of countries which affect actions
and choices of the people of that country. HSBC for this purpose needs to know about the
saving tendency of the people of countries (Perera, 2017). Factors in this environment are-
education level, demographic factors, class structure, attitude of people etc.

Technological
One of the key driver of change is technology and in this HSBC is required to identify
and understand technological development taking place in banking industry and in finance
industry as well. This includes impact of technology in the way of offering products. Cost
impact of technology advancement, impact of technology on customer service etc.
Legal
Countries have various separate rules and regulations which govern banks and its
operations. Legal environment includes all those laws which have been designed for banking
and finance industry. Change in this factor is very unpredictable and bank needs to be prepare
to change accordingly whenever change in this environment occurs.
Environmental
This refers to impact that environment makes on the functioning of bank. Though the
impact of environment is not very significant on the operations of the bank but some of the
factors are required to be considered by the bank in this are Weather, Climate and Laws
related to environment pollution etc.
All these are key drivers of change for organisation and identification and
understanding impact of these factors is important for bank and its management for their
deliberation in future direction of the firm.
Another important driver of change other than this is competitors of the HSBC, which
are other banks and financial organisations (Griffiths, Fenton and Fletcher, 2019). These are
also need to be taken into notice by management before future strategic planning.
CONCLUSION
On the basis of above analysis it can be concluded that before deliberation of its future
direction management of HSBC needs to notice impact of various macro factors so that it can
make strategies to deal with that.

REFERANCES
Books and Journals
Griffiths, M., Fenton, A. and Fletcher, G., 2019. 4.1 Competitor analysis. Strategic Digital
Transformation: A Results-Driven Approach.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Sanjeepan, N., 2017. Strategic Analysis and Strategic Planning for Commercial Banking. (An
Analysis based a Commercial Bank operating in Sri Lanka).