Analyzing the Impact of Macro Environment on HSBC Bank's Strategies

Business Strategy (Unit 32)
BUSINESS
STRATEGY
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Business Strategy (Unit 32)
Table of Contents
INTRODUCTION ..........................................................................................................................2
MAIN BODY...................................................................................................................................3
P1 Applying appropriate frameworks analyse the impact and influence of the macro
environment on a given organisation and its strategies..........................................................3
P2 Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks.............................................................................................................................7
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market
sector for an organisation.....................................................................................................10
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organisation........................................................................................................13
CONCLUSION .............................................................................................................................16
REFERENCES..............................................................................................................................17
INTRODUCTION
External environment refers to a factor that forces company's performance from external
boundaries of an organisation. Such factors effects business operations from internal as well as
external manner and are also known as macro environment (Abraha and Hyder, 2021). Macro
stands for industry or market as a whole upon which no business firm posses its control or power
rather to accept and modify its strategies according to external forces. Macro environmental
factor comprises of forces from political, economical, social, technological, legal and
environmental components which can have either negative or positive influence on business
performance and its brand image. This also includes analysis of company's stakeholders who are
related with business and carries some interest in its working. Level of stakeholders depends
upon their share and degree of interest in company. The other is internal environment which is
related to inside affairs of business. Forces of such factors are easily controllable by management
team of business and harms operations at very low level due to which performance and brand
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Business Strategy (Unit 32)
image does not gets much affected. These are also known as micro environment and covers
analysis through VRIO or McKinsey's 7s framework. In current report various business
strategies of HSBC Bank is studied that covers PESTLE, VRIO, McKinsey's 7s model Ansoff
Matrix, porters Five Force, and many other frameworks are applied. HSBC bank is a global
financial private bank being established in UK during 1836. it has more than 7500 branches
across globe having a parent company of HSBC holdings.
MAIN BODY
P1 Applying appropriate frameworks analyse the impact and influence of the macro environment
on a given organisation and its strategies.
External environment refers to a factor that forces company's performance from external
boundaries of an organisation. Such factors effects business operations from internal as well as
external manner and are also known as macro environment (Ansoff and et. al., 2018) . Upon such
forces no business firm posses its control or power rather to accept and modify its strategies
according to external forces. Macro environmental factor comprises of forces from political,
economical, social, technological, legal and environmental components which can have either
negative or positive influence on business performance and its brand image. This also includes
analysis of company's stakeholders who are related with business and carries some interest in its
working. Level of stakeholders depends upon their share and degree of interest in company.
PESTLE ANALYSIS
PESTLE stands for Political, Economical, Social, Technological, Legal and
Environmental analysis that influences business organisation in positive and negative way.
PESTLE analysis in respect of HSBC Bank is conducted below:
Political Factor: The factor comprises of certain rules and regulations set by political
party which is ruling in central government of a nation (Gurcaylilar-Yenidogan and Aksoy,
2018). It includes taxation policy, fiscal policy, trade restrictions, and other policies that are need
to follow strictly by every business firm.
For HSBC Bank political environment sometimes creates a negative or unfavourable
influence in business operations due to its multinational reach. Bank has to abide by the political
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Business Strategy (Unit 32)
rules of each country which is not an easy task for company to apply. Another issue is of
political instability in country which brings several changes in set policies upon which acting
immediately is a tedious task for organisations and hard to have smooth functioning of business.
Economical Factor: This factor of macro environment talks about country's economic
condition and issues related to it (Hamilton and Webster, 2018). It discusses about poverty and
unemployment, inflation and exchange rate system, growth rate, purchasing power of country
people, etc.
HSBC Bank faces huge problem in policies related to interest and exchange rate
systems. Since every country is having its own policy in this regard which is different from its
headquarter country. This creates a problem in value of currency which bank does not gets at fair
rate. HSBC also gets affected from stock market which changes in every second across globe.
On the other hand some countries proves beneficial for bank in terms of growth synchronization
which helps to generate high revenue in their regions through commercial banking practices. The
concern for currency exchange also hinders the profitability of bank as due to multinational
operations the value of currency differs from country to country which is not static and hence is
hard to equate.
Social Factor: The next force from external environment comprises of society's
preference, ethics or morals, demographics, culture, tradition, etc. since every company survives
in a society so it creates a big impact on business image.
HSBC bank gets positive influence from society after launching of HSBC educational
program for public which is very well accepted by society people. On the other hand bank enjoys
government support as they promotes small and medium enterprises which are beneficial for
HSBC to generate higher revenues (Hamutoglu and Basarmak, 2020).
Technological Factor: Forces of technological environment such as changes in technical
software, equipments, innovation, enhancement of existing technology, etc. plays a major role in
business operations of a company because the world demands technological up-gradation or
innovation frequently (Hanifah and et. Al ., 2019).
HSBC always fights with technological change as it needs to indulge technique of
automation or digitisation into its business to compete with its competitors who are already using
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