Business Strategy for HSBC Bank: Analysis of Macro and Internal Environment, Porter's Five Forces Model and VRIO Analysis

Business Strategy

Table of Contents
Introduction................................................................................................................................3
Main body..................................................................................................................................3
Analysis of the macro environment to determine and inform strategic management
decisions.................................................................................................................................3
Evaluation and analysis of the internal environment.............................................................5
Evaluation of the competitive market using Porter’s Five Forces model..............................6
Theories, concepts and models used for strategic management plan ....................................7
Recommendations................................................................................................................10
Conclusion................................................................................................................................11
References ...............................................................................................................................12

Introduction
Business strategy is a kind of plan of action that assist in understanding various
factors such as market, competitors and business environment to achieve the set objectives
and provide effective decision making process to improve the financial position of an
organisation and stability in the competitive market. This assists a business concern to
provide a vision for the future in accordance with the objectives are set. Business strategy
enables the organisation to determine the threat and opportunities prevailing in the industry
so that it can take effective action to prevent the risk and avail openings(Liu and Kong,
2021). In this report, HSBC bank has been taken into consideration which is a British
multinational universal bank. It serves customers by providing banking and financial services
across the globe. The report will discuss the macro environmental factors in order to
determine the impact on the business of an organisation. Further, it will demonstrate internal
analysis to determine the strength and opportunities available for the organisation to make
financial position strong. Moreover, it will evaluate the market in order to determine the
competition prevailing in the market. Furthermore, the report will discuss the theories,
concept and model related to the business strategy for effective decision making. Thereafter
the strategic direction will be provided to improve the performance and financial stability of a
concern.
Main body
Analysis of the macro environment to determine and inform strategic management
decisions.
PESTLE analysis
It is an strategic framework which is used by the marketers to track and monitor the
external environment factors and its impact on the organisation and its business strategies.
This tool assist HSBC to understand the growth and decline in the market and make it enable
to know the strengths and weaknesses so that it can come up with an effective strategy for the
future growth(Tseng, and et.al., 2022). So here are the factors of the external environment
that can impact the business of HSBC bank are described in such ways:
 Political factors: This factors refers to the involvement of the government that may
influence the business of an organisation. It may include the tax policies,
environmental regulations, trade restrictions, reforms, tariffs and political stability. In

relation to HSBC bank, there are many regulations and policies that are made by the
different government in different countries where HSBC bank has been sheltered.
Therefore, the bank has to follow the regulations so that it can operate the business
successfully without any restrictions. Thus, it has to remain with the policies that are
made by the government of the country. But it can be affected when the government
changes as the new government brings its own rules and regulation that must be abide
by the bank. This factor impacts the firm by imposing the various rules and
regulations on the company and impacts its profitability. Differenent rules and
regulations which are applicable to HSBC sometimes hamper its smooth
functionality.
 Economic factors: This is a factor which refers to the economic growth of the
company and its profitability. This may include interest, exchange rates, inflation,
wage rates and so on that directly impact to the organisation(Eierle, and et.al.,2021).
As regard with HSBC bank, it is one of the leading bank of the world that must have
secure and successful economic growth. But this can be impacted by the higher
interest rates and exchange rates because the customers can be affected when they are
charged with the higher interest rates and the financial services of the bank can be
impacted and may get reduced. This also increase the employment rate which can be
very expensive for the bank to hire talented and skilful employees but help in bringing
more customers. Any change in the rate of inerest impacts the borrowing capacity of
consumers which also impacts the business profitability.
 Social factors: This factor related to the preferences and behaviour of the customers
which include their expectations, cultural trends, attitude changes and so on. With
reference to the HSBC bank, the marketer has to understand the needs of the
customers so that it can satisfied the wants accordingly. The bank provides chances to
each society so that they can get the benefits of the resources that are provided by it.
Therefore, the bank make good relation with the society so that it can provide better
services to the customers and all the transaction that are made by the bank according
the policies of the bank that are under control. Different social factors affect the firms
functionality as they work in the society.
 Technological factors: This is a factor which refers to the innovation and
automation, research and development that may influence the operation of the