Strategic Management: HSBC Case Study

This report provides an in-depth analysis of strategic management in the context of HSBC. It covers the market position, structure, and size of the organization. The report discusses the role of strategic innovation, corporate social responsibility, and ethics. It also explores the internal and external environmental tools used by HSBC. Additionally, it examines the resources and competitive forces faced by the company. The report concludes with insights into market positioning through SWOT and PESTLE analysis.

Strategic management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Strategic management is defined as a series of managerial decision & action which
determines long-run performance of an organisation. In addition to this, it consist of
environmental scanning, strategy development, implementation and control as well (Ansoff,
2018). It is analysed that strategic management helps an entity to attain competitive advantage
over its rivals. In the present report, HSBC (Hongkong and Shanghai Banking corporation) is
taken into consideration. It is a multinational investment bank which was established in the year
1865. The report will cover market position, structure and size of chosen organisation. In
addition to this, there is discussion about internal and external environmental tools. Moreover,
Strategic innovation, Corporate social responsibility and ethics of company is described
properly.
MAIN BODY
Background of the company
HSBC is a British multinational bank & financial service holding organisation that was
established in the year 1865 by Neol Quinn. It is a public limited company which head office is
located in London, UK. It is the 6th largest bank in the world that consist of more than 2,36,000
employees who perform all activities and one of its reason of success. The products and service
offered by HSBC are investment banking, private banking, retail banking, wealth management,
finance and insurance, corporate banking, credit cards and many more (Aragrande, 2020). If it is
taking about the industry structure, HSBC is mainly organised with five groups that is global
private banking, commercial banking, retail banking and investment banking a well. HSBC has
around 4,000 offices worldwide that is it offer services in more than 65 countries. The
organisation focuses on providing quality service to its customers which is the main reason of its
large customer base that is around 38 million customers. It is the second largest company which
listed in London stock exchange and Hong Kong stock exchange. The company has over
2,20,000 shareholders along with a revenue of $ 57 billion as of year 2019.
Innovation plays an important role in every organisation as it help in offering something
new in market and attracting large number of customers that has positive impact on performance
and profitability of an entity. Strategic innovation is a process of redesigning and reinventing

corporate strategy in order to generate value for customers and attain higher growth at
marketplace. In 2019, the higher authorities of HSBC has announced that it opened two
innovation labs in Toronto and London with an aim to accelerate creation of innovative data,
robotics and cloud solutions to its clients. Development of labs are an innovative global strategy
that enhance bank's technology (Bell, 2018). In this labs, the young professionals and students
were introduced to the career at the time of exploring business themes for economic payment
trends. Another innovative technology that is initiated by HSBC is global hackathons. This
hackathons help company in bringing all the colleagues together from all of its branches and also
giving the chance to experiment by re-imaging journeys of client. In order to improve and
develop better payments for its business client, the company is going to launch Treasury APIs
that are designed to speed up payments for large corporate clients and small businesses as well.
This treasury APIs allow customers to make payments at their own workstations that is without
logging into a proprietary platform that is bank. In addition to this, clients receive confirmation
that shows payment request were received and also they can track payments which is from their
accounts to recipients. Moreover, the company has also offer all its services through digital
platforms to its customers. All such innovation assist company to provide quality and effective
service to its customers and gain their trust towards brand. Further, it help in attracting large
number of customers that has a positive impact on its productivity and profitability as well.
Corporate social responsibility is basically a management concept and herein
organisations integrate social as well as environmental concerns with in their business operations
& interactions with its stakeholders. In context to Hongkong and shanghai banking corporation
Ltd, it is analysed that the company is focuses mainly on two themes as a CSR activity that is
promoting education and environmental sustainability as well. In addition to this, the company
operates various range of programmes in order to support and improve the condition of
communities as well. The company is partnership with three non-governmental companies in
order to provide sanitation and safe water to people that is with Water Aid, Earth Watch and
WWF. Moreover, the company make use of sustainability approach that is mainly emphasis on
various areas that is sustainable supply chain, sustainable finance and the last is employability
(Carayannis, 2018). All such activities help company to develop a positive brand image in mind
set of customers and in market also which in turn aid in attaining competitive edge and enhance
performance of the organisation.

The higher authorities of HSBC has adopted Global Sullivan principles as a corporate
governance statement that main aim is to support social, economic and political justice through
companies where they do business. In addition to this, it state that company provide equal
opportunity to its staff members that involving gender diversity on decision making
commitments. Along with this, the company also follow various policies and acts that is health
and safety act, remuneration policy, employment act, discrimination and disability act and
equality act as well (Crabb, 2018). Following of all such act and applied various principles at
workplace will assist company to motivate its staff members and developing an effective
connection or relation with them so that they can work with full potential towards attainment of
organisational objective. Along with this, it also assist company to offer quality and on time
service to customer which in turn leads to attainment of competitive advantage at marketplace.
An organisation required to be provided with a number of resource that will successfully
enable them to survive in the industry. The resources of HSBC can be categorised into four
different kind of resources that are intellectual, human, financial and physical resources. Even
after a number of resources if the organisation is not effectively providing competency in market
than the use of resources in the business cannot be made up to optimum level. In order to deeply
learn about competitors of HSBC there are five forces that could be studied efficiently. It is
required by company to tackle the threat from new entrants that they are facing in market place.
They need to keep on bringing innovations in order to make sure that they are building a
competitive edge and safeguarding it as well (Holloway, 2018). The bargaining power of
suppliers are very less as there are a number of suppliers present in market. HSBC have
effectively build up a supply chain to deal with suppliers. They are also taking initiation in
experimenting with designs of products so that company can shift their suppliers. When
considering bargaining power of buyers. The bargaining power of buyers when considering
HSBC is very high. The customers are demanding who are wishing for best offers at minimal
prices. HSBC is looking in to build huge customer base in order to deal with these problems. In
order to deal with threat from substitutes it is required by to develop their own unique value
proposition. They can effectively do it by setting up service oriented industry rather than just
focusing on products. They also need to increase the switching cost for customers so that
customers would not switch to other company soon (Trâm, 2019). However, when considering
the rivalry between existing players in market than HSBC have to face intense competition. This

intense competitiveness is leading to bring down the profitability in industry. It is also necessary
for HSBC to sustainable differentiation and also build a scale so that company can effectively
compete in market.
Market Positioning is essential for every entity to determine because with help of this
entity is able to make decisions regarding the products as well as services. In reference with
HSBC, they access their market position by analysing SWOT & PESTEL analysis. HSBC have
been able to maintain their privileged position in high growth markets. SWOT analysis is a tool
which is used by organisation to identify internal capabilities of firm. It is helpful for business as
it assist them in implementing strategy for weak areas (Naheem, 2018). Main strength of HSBC
is that they follow CSR strategy. For example- they are always in ahead of protecting
environment like by plantation, etc. This creates a goodwill in market at larger scale. Weakness
of organisations are operating cost of chosen company is rising due to which it is difficult for
them to expand business. Opportunities with bank has broader market in Asia which is
beneficial for expansion of branch. There are many threats such as financial crime via banking
websites in illegal way and this can affects the bank image and also it become difficult for
customers to trust on bank (Williams, 2019).
PESTLE Analysis is framework which is used for analysing external factors which
affects business environment. It include several components which are discussed- Political- In
this element, it involves environmental law, tax policy, trade restrictions etc. In context with
chosen entity, they also have been affected by these factors as due to political uncertainty of EU
region, it is difficult for them to carry out organisational structure. In economical, it involves
variables like inflation & deflation rate, tariff and non-tariff, etc. In relevance with undertaken
entity, there is growth synchronization of major economic regions. Social- In this, it includes
attitudes, beliefs, behaviour etc. In reference with selected firm, they have been able to follow
social factors as they provide work life balance in organisation, provide benefits and incentives
to society for their interest in bank services (Konovalova, 2018). Technological is one of most
crucial element of analysis because without this chosen bank cannot operate their activities
properly. In relevance with undertaken bank, they require regular update for their technology
sites, also launch of move money & links-Screen has widen their scope of online facilities. Then
further, environmental which involves variables like climate change, occupational hazards etc.
The bank has focused on this element as they have sustainable operations & initiatives, green

finance. It is essential for firm to focus on this element as it directly affects the goodwill of
business. Legal factor in which it comprises of contracts, agreement, etc. which are governed
by law. In relation with selected enterprise, they faced many legal issues like PPI have claims
that they have mis-sold a lot of payment protection insurances without even getting permission
from customers. This is creating a big problem as many end users are closing their account &
bad publicity is rolling out in market. So, after examining these two analysis it is stated that
market positioning is essential for accomplishing goals or objectives properly (Jeong, Lee and
Lim, 2019). With the help of above description it can be justified that there are a number of ways
in which external factors can prove to be opportunities as well as threats for an organisation. It is
necessary for HSBC to keep a check on all these external factors and accordingly bring changes
in their strategies to take maximum advantages of such situations (Okumus, 2019).
CONCLUSION
From the above study, it is concluded that strategic management assist an entity in
conducting environmental analysis due to which an effective strategies were developed that leads
to enhancement in performance and productivity of company. Along with this, it help an
organisation to fight with their competitors and attain competitive advantage at marketplace. In
order to analyse the level of competition prevailing at international market, Porter's five force
model were applied by the organisation.

REFERENCES
Books & Journal
Ansoff, H.I., and et. al., 2018. Implanting strategic management. Springer.
Aragrande, G., 2020. Case Study 3: The HSBC Scandal and Its Reporting Across Europe.
In Fascinating Transitions in Multilingual Newscasts (pp. 165-183). Palgrave
Macmillan, Cham.
Bell, and et. al., 2018. From the guest editors: Opportunities and challenges for advancing
strategic management education.
Carayannis, E., 2018. Strategic management of technological learning. CRC Press.
Crabb, J., 2018. What banks need for the digital transformation. International Financial Law
Review.
Holloway, S., 2018. Changing planes: A strategic management perspective on an industry in
transition. Routledge.
Jeong, C. Y., Lee, S. Y. T. and Lim, J. H., 2019. Information security breaches and IT security
investments: Impacts on competitors. Information & Management, 56(5), pp.681-695.
Konovalova, and et. al., 2018. Forming approaches to strategic management and development of
tourism and hospitality industry in the regions. Journal of Environmental Management
& Tourism, 9(2 (26)), pp.241-247.
Naheem, M. A., 2018. Illicit financial flows: HSBC case study. Journal of Money Laundering
Control.
Okumus, F., and et. al., 2019. Strategic management for hospitality and tourism. Routledge.
Trâm, T. C. M., 2019. Solution to improve sales performance of thrid-party sales agency channel
in HSBC Bank VietNam.
Williams, D. A., 2019. Marketing Blunders. In International Business Blunders: Lessons for
Future Managers. Emerald Publishing Limited.