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Concepts and Theories of Strategic Management

   

Added on  2021-06-17

22 Pages5321 Words130 Views
Running Head: STRATEGIC RECOMMENDATIONStrategic Recommendation: HSBCName of the Student:Name of the University:Author note

1STRATEGIC RECOMMENDATIONExecutive Summary The purpose of this assignment is to understand the concepts and the theories associated withstrategic management and to align it with an organisation. The company that has beenselected to conduct the study is HSBC, which is one of the leading financial institutions in theworld and the company has over the years employed efficient strategic management decisionsin order to accomplish the objectives. The assignment analysis both the macro and microenvironment of the organisation in order to understand the position of the company and whatare the capabilities and lastly has provided strategies to gain competitive advantage using anacademic model.

2STRATEGIC RECOMMENDATIONContents1.Introduction.........................................................................................................................31.1Overview HSBC..........................................................................................................32.External Environment of HSBC.........................................................................................42.1Industry overview and analysis...................................................................................42.2 Pest Analysis....................................................................................................................52.3 Porter’s five force Analysis..............................................................................................73.Internal environment of HSBC...........................................................................................93.1Value Chain analysis...................................................................................................94.Strategic analysis of HSBC...............................................................................................12SWOT analysis.....................................................................................................................125.Strategic Recommendation...........................................................................................165.1Ansoff Matrix (competitive advantage)....................................................................165.2Other recommendations.............................................................................................176.Conclusion........................................................................................................................187.Reference list....................................................................................................................19

3STRATEGIC RECOMMENDATION1.IntroductionStrategic management in business organisations are essential to formulate policies anddecisions. Over the years there have been several theories and models that have been coinedby many scholars to help and guide managements of organisations. The success or failure ofan organisation depends upon the ability of the company to achieve the objectives that hasbeen set (Senge 2014). In order to set the objective and to deliver those companies undertakestrategic management decisions. In order to understand the concept of strategic managementbetter, the organisation that has been chosen to complete the assignment is HSBC. It is one ofthe largest financial organisations in the international market. The assignment will focus onproviding the organisation with strategic recommendations based on the analysis with thehelp of various tools. It will focus on overcoming the barriers and achieving competitiveadvantage. 1.1Overview HSBC Hong Kong Shanghai Banking Corporation or HSBC is the world’s seventh largestfinancial institution in the world. The company was established in 1886, and is amultinational organisation that operates in the sector of banking and financial services.Originating from Hong Kong the company is based and headquartered in Britain, UK and islisted with the London Stock exchange (Hsbc.com 2018). Over the years of operation thecompany has been through several ups and downs. HSBC has its operation in more than 80countries with the help of offices in 7500 locations. The functions of the business can bedivided in four broad categories: Global Private Banking, Retail banking, Commercialbanking as well as Global Banking (Hsbc.com 2018). In the years of operation theorganisation has become a forerunner in the industry by setting several benchmarks in termsof economic, employment facilities, setting trends in the consumer behaviour, updated

4STRATEGIC RECOMMENDATIONtechnology with a greater communication system as well as recognise the duties the companyhave towards the society and the environment (Hsbc.com 2018; Alvesson 2012).Thecompany focuses on Europe, Hong Kong, Asia-pacific region, Australia and America as thearea of operation. Asia-Pacific region is recognised as an emerging market for the company. 2.External Environment of HSBC 2.1Industry overview and analysis The finance industry has evolved over the years, the companies that operate in theindustry has incorporated technology in the process of service. The industry helps thecustomer take care of their financial aspect as well as helps them get financial back up as well(Senge 2014). One of the major barriers of this industry is credibility, after all these years there arecustomers that lack their trust in the industry and do not recognise the advantages associatedby doing business with a financial institution like HSBC. For long-term economic growth anddevelopment it is important for people to save, investment and make use of the other financialservices that the companies in this industry has to offer (Weforum.org 2016).The finance industry is important to the economic development of a country as it isdirectly associated with the savings rate, investment rate which in turn provides the countrywith financial stability, improvement in the rate of poverty and provide job opportunities inthe long-run. The industry is crucial as it helps the country in raising capital; improving theforeign trade, the transfer of liquidity, it also provides higher level of integration for globaltransactions. Some of the direct competitors of HSBC are Standard Chartered Bank, Citibank,Deutsche Bank. The industry has intense competition and is strictly bound by rules and

5STRATEGIC RECOMMENDATIONregulations. There are several international authoritative organisations in the finance sectorthat behave as a check on the companies that operate in the industry like the World bank andIMF (Jaber and Al-khawaldeh 2014). 2.2 Pest Analysis The external environment of an organisation factors impact the strategies and decisions ofthe organisation. Organisations have to keep monitoring the external environment as thedynamics of the factors are not under the control of the management of the organisationtherefore decisions must be taken to understand and determine the opportunities and in orderto overcome the threats and weaknesses. PEST analysis will help in determining the externalbusiness environment of HSBC; this will further help in proving strategic recommendations.Political: A business organisation has to agree with the government of the countries in whichthe company runs it s functions. As HSBC is a financial organisation the company has tokeep up with the framework of the government of the country regarding the financial rulesand restrictions (Worldbank.org 2016). Political stability index must be considered whileexpanding the business. In order to successfully achieve the objectives of the organisationaligns the interest with the interest of the customers and the country of operation the company(Senge 2014). The encouragement of trade and business by the government of the countryprovides support to the mode of entry and operation for HSBC. As a multinationalorganisation that operates in the international market HSBC follows the international politicalcodes and regulations as well (Jaber and Al-khawaldeh 2014). Economy: The economic development and the current condition as well as the predictedoverview of the country helps an organisation take decisions to use the situation in its benefit.The company has faced several setbacks and has been able to combat the situation based onstrategic management decisions taken during the depression of 2008, HSBC had faced severe

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