Business Strategy

Business Strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
LO1..................................................................................................................................................3
P1 Analysing the impact of macro environment on the organization and its strategies..............3
LO2..................................................................................................................................................6
P2 Analysing the internal environment of organization using appropriate frameworks.............6
LO3..................................................................................................................................................8
P3 Porter's five forces..................................................................................................................8
LO4................................................................................................................................................10
P4 Strategic management plan for the organization..................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business strategy is concerned with combination of several decisions taken in order to
achieve the organizational goals and objectives effectively and efficiently. Business strategy acts
as a road map for every organization and also helps the company in achieving competitive
advantage. It is imperative for every organization to have a planned business strategy or else it
will lag behind. As an analyst hired by HSBC bank I have to do extensive research on bank and
do SWOT as well as PESTEL on it. HSBC is leading bank in the world but now a day it is facing
varied problems in its business. On basis of PESTEL and SWOT I identify areas where bank is
weak and prepare strategic management plan.
The Hong Kong and Shanghai Business Corporation (HSBC) is a British multinational
investment bank that deals in financial services, investment banking, loans, wealth management
and other such activities. HSBC bank was ranked as the 7th largest bank in the world by its size
and operations and has 3900 offices located in more than 67 countries. As of 2018, HSBC bank
employs more than 235,000 individuals worldwide. The current study will highlight the
importance of business strategy in making HSBC a successful organization and also the use of
various tools like PESTLE analysis, SWOT analysis, Porter's five forces and VRIO model that
help a business in making strategic decisions.
MAIN BODY.
LO1
P1 Analysing the impact of macro environment on the organization and its strategies.
Business environment is and addition of both external and internal factors that affect the
working of an organization. The micro factors include customers, competitors, suppliers and
employees whereas the macro factors include political, economic, social, technological, legal and
environmental factors. The macro factors cannot be controlled by the organization and can affect
its working in both positive and negative manner thus its is imperative for multinational
companies like HSBC bank to analyse the impact of macro factors and take precautionary
measures in order to avoid any uncertainty in the near future (Albrecht, Holland and Peters,
2016).
PESTLE analysis of HSBC bank and its business strategies
 Political factors: Political factors are basically concerned with the tax rates, subsidy and
government policy that affect the working of a company. HSBC group operates in more

than 67 countries therefore it has been exposed to various political risks and instability. In
order to minimize the adverse effect of various political factors the company keeps a
close check on certain political aspects like growth rate of banking sector in a country,
pricing regulations and the rate of stability in the financial service sector. Although,
according to ElMassah, (2015) the BREXIT had a negative impact on the smooth
working of the bank as the company announced that relocating 1000 employees from
London to Paris would require legal charges which can cost the bank around $300
million. United Kingdom's exit from European Union will also hamper the smooth
working of the company as they need to modify their business strategies and change it
according to the future scenario.
 Economic factors: The economic factors include inflation rate, investment level, foreign
exchange rate and also the economic cycle that determine the aggregate demand and
aggregate investment in an economy. With the stability in the inflation in the United
Kingdom, the HSBC bank have opportunity to distribute more and more loan to the
business firms and individuals. Economy of UK is now on track but acceleration in the
economy is still required as its growth rate is low. With passage of time it is expected that
global conditions will improve which will lead to sharp growth of the UK economy
(Prajogo, 2016). Thus, in upcoming time period economic environment will be
favourable for HSBC. In 2008 HSBC observe increase in NPA which badly affect it at
that time. Still UK economy is coming on growth track and on basis of past experience
firm is cautiously distributing loan to the candidates so that NPA remain in control.
 Social factors: The socio-cultural factors include the beliefs, culture, values and attitude
of the public in the country. The major social factors that affect the HSBC group are the
demographic of the population as it helps in customer segmentation and also help the
bank in identifying their target customers. Also, it is imperative for HSBC to know about
the income level of the people because if the majority of the people in society belong to
the lower middle-class family then the bank would not be able to sell its premium
services to them and would have to mould its financial services and strategies. Social
factor to great extent affect banks. In order to understand thing just compare society of
two nations like India and USA. In India people believe in saving more and more money
specially in year 2008 and before that. On other hand, in USA people earn high and