Competitive Strategy for HSBC Bank: PESTEL, Five Forces, and SWOT Analysis

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Competitive Strategy
Essay
4/20/2018
Student Name

1 | P a g e
Companies use the strategic approaches of management to remain competitive in the
environment. HSBC is one of the companies which uses the approach to remain competitive
and active in market. HSBC Bank Plc is a British multinational banking and financial
services holding company. HSBC originates from the Hong in Hong Kong. HSBC is the
seventh largest service provider of banking and financial services. HSBC has made its
existence all over the world by providing the quality services to its customers (HSBC, 2018).
To remain competitive in the market, HSBC is doing the scanning of the environment. By
scanning of the environment, the external opportunities and threats is come to know to
managers. The company tries to avail the opportunities at the maximum and try to reduce the
possible threats which can harm the organization. To survive in the competitive and dynamic
environment, business has to perform analysis to know the market conditions and situations.
These analyses include the PESTEL analysis, five forces, and SWOT analysis.
PESTEL Analysis
HSBC has made its existence in many countries and has to follow the rules and regulations of
different governments where they are working. The company tries to agree to terms and
policies of the government (Australian Government, 2018). In Australia, the government
follows the easy and flexible policies for banking and financial sector.
In terms of economic point of view, HSBC has performed extremely well because of its
uniqueness in the product and services. In Australia, HSBC have a good reputation in the
market and has prime and loyal customers. In spite of many dangers that they have
encountered in many countries, the company is able to maintain its stability in the economy
(Smets, 2014). Biggest danger in Australian economy is facing the increase in interest rates.
It will ultimately impact the buyers and investors purchasing power.
HSBC has many competitors like Bank of America, Citi Bank etc. but then also the company
is performing well in the market. The company is using the resources (human, capital) of the
country, so to bestow upon the needs of the society; company is offering employment and
good lending policies in the country. HSBC is also providing the low carbon economy in
which environment financing, is also including. As the use of low carbon technology in the
economy, HSBC is beginning investment in the climate and clean tech results (Jaber,
Elkarmi, Alasis, and Kostas, 2015).
In the purview of legal factors, the rules and regulations followed in Australia seems to be
increased for operating the business in the market. Increased high governmental regulation

2 | P a g e
leads to the high capital requirement as well as new anti-money laundering act requirements
which lead to increase in the cost and time of the company (Australian Government, 2018).
HSBC tries to recognize the climate change in Australia and reduce their carbon footprints.
Footprints can be reduced by the recycling the waste, transport emissions etc. (Soliman,
Mourits, Lansink and Van der Werf, 2010).
Michael Porter’s Five Forces Model
Michael Porter's five forces try to determine areas where to develop the business and nature
of the industry. These five forces are analyzed and assess the market position and competitive
strength. The first force talks about the competitor intensity to operate in the market. There
have been many competitors in the banking and financial sector. HSBC is facing high
competition in the market from Barclays, Citi group. Competitors are working in the same
segment in which HSBC is operating (Brunnermeier and Sannikov, 2014). HSBC tries to
develop those strategies and policies in the Australian market that they always remain at the
number one preference in the minds of consumers.
HSBC is aware of the fact that its competitors are offering the new products and services in
future. This will give a chance to the company to work at their highest level and achieve
sustainability in the market (HSBC, 2018). HSBC tries to find out the requirement of the
consumer and then makes the product and service accordingly.
Nowadays, consumer’s wants and needs are increasing day by day. They want to buy the
best products and services available and paying the lowest amount as possible so it becomes
difficult for the company to provide all this. The profitability goes on declining because of
this type of customers.
Similarly, the powerful suppliers are also negotiating the higher prices from the firms. The
overall impact of higher supplier bargaining power is that it lowers the overall profitability of
HSBC. In Australia, buyer and supplier do not have much-negotiating power in their hands,
so it will be easy for HSBC to maintain its profitability standards (The write pass journal,
2018).
SWOT analysis
SWOT analysis is done to know the company’s internal and external strengths, weakness,
opportunities, and threats for the company. HSBC is considered to be the biggest bank in
Europe in terms of lending of assets and market capitalization. The company has