HSBC Strategic Marketing Plan Analysis

This assignment delves into a comprehensive analysis of HSBC's strategic marketing plan. It begins by conducting a thorough SWOT analysis to identify the bank's strengths, weaknesses, opportunities, and threats. Subsequently, it explores HSBC's future scenarios, values, vision, mission, and strategic goals. The analysis culminates in outlining future initiatives and developing a concrete strategy for HSBC based on its identified objectives and market landscape.

Strategic Management

Table of Contents
INTRODUCTION ...............................................................................................................................4
TASK 1.................................................................................................................................................4
1.1 Critically evaluate business strategy development and implementation. .................................4
1.2 Identification of outcomes.........................................................................................................5
TASK 2.................................................................................................................................................7
2.1 Identification of strategic direction............................................................................................7
2.2 Justification of actions.............................................................................................................11
TASK 3...............................................................................................................................................11
3.1 Discussion and justification of implementation challenges.....................................................11
3.2 Justified recommendations......................................................................................................12
CONCLUSION..................................................................................................................................13
REFERENCES...................................................................................................................................14

Illustration Index
Illustration 1: Porters Genreic Strategies............................................................................................10

INTRODUCTION
Strategic management is a continuous process which refers to the formulation and
implementation of strategies for the achievement of goals and objectives. It consists of planning,
motoring, analysing and implementing the appropriate strategies for meeting organisational goals
and objectives. Generally, strategies are formed by the companies for improving their performance
and position in the market (Debrah, 2013). These are formed by analysing internal and external
strengths of the firm which helps in formulating proper action plans and executing them at the right
place.
In the present study, HSBC bank of UK is taken into consideration. The headquarter of this
bank is situated at London in UK. It is a multinational bank and provides various financial services
to the people. The services provided by HSBC are consumer baking, corporate banking, investment
banking, private banking and many more (Heinz, 2013). This study consists of critical
understanding of concepts, techniques, theories, functional areas in respect to the strategy formation
and implementation. Along with it, file also consists of various ways for taking strategic decisions
in the context of culture and other sectors, analysis of strategic issues and designing of appropriate
solutions. In the end, the study is concluded with key findings and meaningful measures.
TASK 1
1.1 Critically evaluate business strategy development and implementation.
Hirsch and Gschwandtner said that “A good strategic plan helps in proper allocation of
resources along with their utilization ” (Hirsch and Gschwandtner, 2013). Similarly Huemann,
Keegan and Turner has stated that “HSBC plans its strategies carefully for getting a unique position
in the UK banking industry” (Huemann, Keegan and Turner, 2007). In respect to this statement, it
is found that proper development and implementation of strategies results HSBC to achieve position
of world's fourth largest bank. On the other hand Joanicjusz has asserted that “Recession in UK
make banks to suffer most due to the inappropriate development and implementation of strategies
for overcoming from that situation” (Joanicjusz, 2010).
Johnson, Scholes and Whittington, has concluded that “Proper strategy formulation results
to improve the performance and internal processes of the organisation” (Johnson, Scholes and
Whittington, 2005). In the favour of thisJones, has found that “Use of appropriate tools and
techniques can makes strategy development more simpler and easier process and results to improve
performance in more effective way” (Jones, 2009). In respect to this, HSBC is using Value at risk
(VAR) tool for monitoring and controlling the risks that occurs during the work processes. This tool
helps bank in planning and developing right strategies by keeping the work related issues in mind.
In contrast of the above statement Kambil, has demonstrated that “Consumer expectations

and demands should be taken into consideration at the time of strategy development” (Kambil,
2008). Similarly Kang and Snell, has found from his research that “Strategies formed by keeping
customer needs, demands and desires in mind results in achieving firm's objectives effectively and
efficiently” (Kang and Snell, 2009). As per this statement, the corporate level strategies of HSBC
are being affected by the changing demands of market and customers. After recession, bank is not
getting full trust and loyalty of its clients but it is continuously trying to achieve it by providing
value added services to them.
Lee, Kim and Park has identified that “ By focusing on the organisational capabilities,
constraints and environment at the time of strategy development and implementation firm can
achieve its goals and objectives ” (Lee, Kim and Park, 2012). On the other hand Lynch, has said that
“Successful strategy implementation is more important than strategy development as best strategies
remains ineffective if they are not implemented properly and successfully ” (Lynch, 2006). In
respect to this, owner of HSBC said that “The bank implements strategy by ensuring its
sustainability and actions” (HSBC, 2016). In continue to this, he stated that for bridging the gaps in
work processes, bank uses operational, commercial and technological information during strategy
development.
HSBC uses Porter's generic strategy model for effective development and implementation of
strategies. In respect to this McDonald has asserted that “Porter's Generic strategy model is
appropriate for developing and implementing strategies for the achievement of planned objectives”
(McDonald, 2012). Similarly Hirsch and Gschwandtner has stated that “Porter's generic strategy
model consists of cost leadership strategy, differentiation strategy, and focus strategy ” (Hirsch and
Gschwandtner, 2013). As per this statement, HSBC focus on the diversification of the products and
services such as cheque outsourcing services, smart cheque, priority payments and many more.
These diversified products and services helps bank in meeting the customer demands and needs.
On the other hand, Joanicjusz has said that “By following the Cost leadership strategy, firms can
easily achieve a good market position” (Joanicjusz, 2010). In favour of this Johnson, Scholes and
Whittington has concluded that “Use of cost leadership strategy in banking sector requires low
overheads, cheap labour and proper procedures for providing training to the employees” (Johnson,
Scholes and Whittington, 2005). As per this statement, HSBC relies on cost leadership strategy for
achieving competitive advantages. It decides the cost by proper researching the strategies used by
its competitors.
1.2 Identification of outcomes
HSBC uses Porter's generic strategy model for achieving its goals and objectives effectively
and efficiently. Bank gets many befits by using this model for developing and implementing
strategies at right place and in right manner, This strategy helps HSBC in identifying its value-chain

which results to control all the cost related drivers in more effective manner as compare to its
competitors (Kambil, 2008). The low cost strategy results to increase in number of customers and
use of services and products. This strategy results in customer satisfaction and creating value of the
bank. HSBC uses diversification strategy for inviting customers from various fields. It provide
various types of products and services to the people which results to improve the performance of the
bank. The brand loyalty of clients tends to decrease in sensitivity towards price. Bank satisfies its
customers by improving the quality of its products and services which also helps in improving the
performance. By the help of Cheque outsourcing services, HSBC provides facility of online
querying, rationalization of work flows, outsourcing of instruments, etc. Similarly, advising
solution helps in delivery to multiple recipients by the help of emails, and fax. It also supports to
cashier orders, demand drafts, inter-account transfers, corporate cheques and many more. All these
services helps HSBC in satisfying its client and increasing its market share (Proctor, 2014). This
strategy also helps in improving the management and working of HSBC which at the end leads to
effective work performance. The reputation of this bank is also very good among the people due to
its excellent services. Through this strategy, company is taking steps for increasing the availability
of its products and services in various countries. Company is opening more branches at various
places for reaching to more people by various services. The strategy of HSBC is to engage with
wide rage of business ventures for enhancing its business in other areas also. It is not only providing
its services in banking and financial sector but also in other applicable industries. By using Porter's
generic strategy, company is achieving its target of providing quality and valuable services to the
customers. Through this strategy, it is also taking care of its employees needs and expectations.
Various training programmes are conducted by the firm for enhancing the skills, opportunities and
abilities of the members (Moon and et.al., 2014). By implementing strategies at right place HSBC is
providing its services to the people at global level. It is making strategy for expanding its business
at small and medium level by providing value to internal stakeholders of the company. Porter's
generic strategy is providing various opportunities to the HSBC by developing and maintaining
good relationships with customers.
Strategic management is a continuous process which refers to the formulation and
implementation of strategies for the achievement of goals and objectives. It consists of planning,
motoring, analysing and implementing the appropriate strategies for meeting organisational goals
and objectives. Generally, strategies are formed by the companies for improving their performance
and position in the market. These are formed by analysing internal and external strengths of the firm
which helps in formulating proper action plans and executing them at the right place.

TASK 2
2.1 Identification of strategic direction.
Strategic Direction is the planning of a particular goal or objective of the organisation. It
requires formulation of steps in order to achieve a strategy for the organisation. Strategic direction
can also be termed as the vision and mission of the companies policies. It can be done by analysing
the present scenario of the company with the future requirement. Direction's guides the
management of an organisation in identifying the loophole which is hampering the growth of the
company. HSBC is among the leading bank of United Kingdom (HSBC, 2016). The bank provides
various financial and wealth management services. Although it is a strong competitor in the banking
industry it is still facing greater issues related to achieving enhanced market share. The bank is
forced to develop news strategies that will support the bank to achieve competitive advantage over
its competitor's. It is very important for the bank to formulate new strategy to stand out among its
competitors and to maintain sustainable advantages for the future. In order to ascertain future
requirements steps have been evaluated for the bank. They are as followed.
In order to formulate strategies for a company SWOT analysis is done to identify the
strengths, weakness, opportunities and weakness of the company. This analysis is helpful in
evaluating the present capacity as well as the future potentials of the company (Seven steps to a
strategy for your organisation, 2016). It is done by first identifying the internal capacities i.e.
strengths and weakness of the organisation. After that the external environmental affect is accessed
through the threats and opportunities. SWOT analysis is helpful evaluating the present position
which assists the management in formulation of strategies for the bank. The SWOT analysis for
HSBC is done as followed.
Strengths-
HSBC is a well established bank both in United Kingdom and the international market. The
bank has a good reputation in the market for providing extra ordinary customer services to the
consumers. The company have successfully designed different types of product to facilitate
consumer's choice (Moore and et.al., 2009). The company abides by all the government regulation
formulated by the political and legal framework of United Kingdom.
Weakness-
HSBC biggest weakness is the increased vulnerability of risk and shortening of profits. The
financial scandal of 2012 has spoiled companies brand image and reputation among the customers.
The consumers have lost their faith and loyalty with the company. Another weakness is the lowered
STEP 1: Conducting SWOT Analysis

employee participation and write-off's in the employee structure (Nestle, 2013).
Opportunity-
Expansion in the global market is the biggest opportunity for HSBC bank. The company has
a better chances to stand out from its competitors in the international market. Along with this HSBC
can create product development to attract more customers to the company (Proctor, 2014). The
major advantage by achieving these opportunity will help the company in achieving greater market
share from its customers.
Threat-
In order to acquire these opportunity company has a risk to loss finances as expansion is
considered as a expensive process. The threats of the global market and fluctuation may create
problems for the company (Robertson and Wardrop, 2012). There are many regulation in the foreign
which the company will have to abide by. In order to follow all the regulation company might faces
greater challenges.
HSBC has opportunity to increase consumer base and market share in the market. The bank
wants to formulate strategies that will help the organisation in achieving competitive advantages
over its competitors. These strategies will provide future direction to the company in increasing its
earning and profitability (Rynes, Giluk and Brown, 2007). The main aim of the company is to
achieve competitive advantage over its competitors.
HSBC core values are presented under.
 To perform excellently on the commitments with clients and customers.
 To create positive work culture in order to improve decision making within the organisation
(Our values, 2016).
 To build consumers loyalty and create connections to achieve customer satisfaction.
To integrate creativity and cultural significance in the environment if HSBC (Our Vision,
Mission and Goals, 2016). By focusing on the needs and demand of the customer achieve
competitive advantage in the banking industry.
 Developing the present capabilities and potentials of the organisation.
STEP 2: Identifying Future Scenario
STEP 3: HSBC's Values
STEP 4: Vision
STEP 5: Strategic Goal

 To create value by delivering premium as to raise the standards of the industry (Nijssen and
Frambach, 2013).
 Enhance market share by achieving competitive advantage from the customers.
 Become a valuable brand for the customers, clients and employees of the bank.
 To protect and safeguard the interest of customers.
 To achieve market share by creating competitive advantages (Our Vision, Mission and
Goals, 2016).
 To assist the employees in raising customer's satisfaction.
The future initiative of HSBC bank is to formulate a strategy that will help the company in
achieving competitive advantage over its competitors. This initiative will motivate the management
to find a selective strategy that will help in achieving greater market share in the international as
well as in United Kingdom. Porters Generic strategy, Blue Ocean strategy and Global strategy are
helpful in formulation of strategy (Schosser and Wittmer, 2015). Among these strategies the bank
can choose Porters Generic strategy model to create relevant strategy to increase earning and
profitability.
The Porters generic model is used to identify the competitive advantage of the company
after analysing the market in order to implement this strategy in the organisation. This will be done
in order to reduce the cost of the product and increase revenue. In order to achieve this good
expertise is required with the management. And regular employee participation will increase the
outlook of this strategy. For example, company can lower the financial and insurance products
process. As already it does not have to invest a large amount in these strategies (Solomon, Russell-
Bennett and Previte, 2012). Better technology can be employed that will allow the customer to
access the features of the products without coming to the bank. Cost cutting can be done by
eliminating human personnels. The bank can recruit fresher and trainees instead of hiring expertise
professional. This way cost cutting can be done and better revenue margin can be generated. The
model is elaborated in four different parts i.e. differentiation strategy, cost leadership strategy, cost
focus strategy and differentiation focus strategy.
STEP 6: The Mission
STEP 7: Future initiatives and developing a strategy

In differentiation strategy the company tries to develop the product or services which is
being offered to the customers. The company has to develop the current product in order to make it
more attractive to the customer. Although company can increase the price of the product as the cost
will increase. The company can use resources like heavy research and innovation in technology to
achieve development criteria of the products. The focus strategy requires the company to focus on a
narrow market. In this the company tries to certainly focus on the specific needs of the clients' as
the market size is small (Van Buren, Greenwood and Sheehan, 2011). Generally low cost products
are created in this strategy thus the customer has low bargaining power. The other strategy is a
combination of above two. In the cost leadership strategy the company focuses on increasing the
market size by decreasing the prices of its products. The company may charge below the industry
rate to raise its profit percentages. Company only tries to lower the cost and not the selling price of
the products. This way the organisation is able to create better profitability.
In order to achieve competitive advantage in the market, HSBC must follow cost leadership
strategy. This will enable the company to create a differentiated image among it's competitors. The
bank will be able to achieve greater profits as sale will increase. To do so HSBC will incorporate
technology that will enable it to create low price products (Debrah, 2013). Although heavy
investment will have to be levied in order to design technology specifically for this task. The return
on investment is expected to be good, as profit percentage will increase the invested amount will
Illustration 1:
Porters Genreic Strategies
Source: (Mindtools, 2016)

automatically get recovered. This strategy also allows the company to increase its market share. The
company will make profits as low price products attract a large share of consumers. Also only the
costing is lowered and not the selling price of the products or services,. Thus company can decide
as to what percentage margin it wants to achieve.
HSBC bank will become the leader of the market as more and more customers will buy
companies products. This will be the competitive advantage over its competitors. The company will
have to maintain its cost policies in a way that competitors do not copy or steal it. Cost cutting will
have to be done by the company in order to implement this strategy in the organisation. This will be
done in order to reduce the cost of the product and increase revenue. In order to achieve this good
expertise is required with the management (Heinz, 2013). And regular employee participation will
increase the outlook of this strategy. For example, company can lower the financial and insurance
products process. As already it does not have to invest a large amount in these strategies. Better
technology can be employed that will allow the customer to access the features of the products
without coming to the bank. Cost cutting can be done by eliminating human personnels. The bank
can recruit fresher and trainees instead of hiring expertise professional. This way cost cutting can
be done and better revenue margin can be generated.
2.2 Justification of actions.
The above applied strategy i.e. Porters generic strategy is feasible and applicable to the
current situation of the company. The model is designed in a way to achieve competitive advantage
in the market. HSBC will be able to implement this Strategy to the companies framework and can
evaluate the major threats. The skills of the employees will also increase as they will be motivated
to perform better for the organisation (Nestle, 2013). The bank will get technologically advance as
the new technology will be employed that will reduce the cost of the products. Cost advantage is
always favourable for any organisation. As a part of banking industry there is not much
manufacturing expense required by the company. The customers satisfaction is generated in the
form of monetary advantage. Thus it is viable for the company to use this strategy in order to gain
market share and ham per the growth of its competitors.
TASK 3
3.1 Discussion and justification of implementation challenges.
While formulating strategies, there are risk of challenges that may occur at the time of
implementation of the strategy. In order to implement the strategy, HSBC may face various
challenges, they are as followed.
 Resistance to change- The main problem that management will face is making the
employees resistance to change. A strategy brings along with it various change. It may be
difficult to convince employees while implementing these changes in the organisation. The

change regarding cutting off employees may be a tedious task for the company to implement
(Robertson and Wardrop, 2012). The employees may not agree to the same thus many
internal conflicts may arise for the management.
 Access to the budget- The management may not have an increased access to the budget.
Implementing a strategy which requires development the product is expensive task. Along
with this the strategy required to bring in advanced technology also requires huge funds.
Although the return on the investment will be generated after sale starts (Solomon, Russell-
Bennett and Previte, 2012). But meanwhile it may be a problem for the company to mange
the increased requirement of funds.
 Time issue- Another issue while implementing the strategy is related to the time. The
company will have to create a deadline which will help in reaching the target in a better way.
Formulation and implementation of strategy requires time and effort. Thus the manger may
fall short in completing the targets ion the given frame of time . It is important to keep a
track of the deadline as disrupting may hamper the viability of the strategy.
 Cost reduction- Cost cutting is another challenge that will have to managed by the
organisation. In order to create a low priced product the bank will have to certainly reduce
the cost of its resources, like the human resource personnels. The bank may decide to recruit
new individuals like freshers and trainees who agree to work on a lesser pay then the
experienced individuals.
 Lack of Expertise- In order to implement change the management will require human
resource personnels who have great skills and expertise. It will be a challenge to properly
access these skills of the employees. There will be instances where the employees might not
be able to present up-to their best capabilities (Proctor, 2014). Each instance the
management or an expertise personnels might not be available in critical time. The
management will also have to pay attention on the recruitment process while hiring new
individuals. The qualifications required to perform job specification might not be fulfilled
by the individual. This will create problems in implementing the strategy.
 Operational issues- Then flow of current work may be interrupted while introducing a
strategic change in the organisation. The employees might be miffed which will hamper the
positivity of the work environment. The operations performed in the bank might be
discontinued. In introduction of news products through the strategy will also be a issue. The
employees concentration will be discontinued by the hampered work environment of the
organisation.
3.2 Justified recommendations.
As there are many challenges faced by the organisation while implementing strategies,

recommendations are been presented. These recommendation will assist the management in
resolving the implementation challenges. Planning- The management of HSBC requires to efficiently plan the changes and strategies
to be implemented in the organisation. Proper assessment must be done by the management
in order to find out the issues that may be faced while implementing strategies (Lee, Kim
and Park, 2012). Planning will help the organisation in achieving the future goals and
targets in a managed way. Continuous improvement- In order to achieve competitive advantage over the competitors
company will have to constantly bring innovation and improve the performance of its
logistics. As the cost leadership strategy requires the company to formulate low cost
product. Their is a risk of the competitors stealing the ideas of the company (Michael,
Duane and Robert, 2004). Continuous improvement will help in bringing innovation thus
the issue will be resolved. Allocation of responsibility- The management will have to properly allocate the
responsibility the employees. This will help them to understand the relevant change. The
organisation must motivate and inspire its employees so that they responsibly work in
achieving the goals and objectives of the organization.
 Follow up- In order to eliminate quarrel and negativity from the work environment the
management must regularly monitor the employees (Nijssen and Frambach, 2013). This will
help the management to keep an eye on the employees which will highlight the
accountability of the work done by them. Follow up will also let the management to identify
any loophole that may occur in implementing the strategy.
CONCLUSION
It can be analysed from the research that strategic management is a very important aspect of
the organisation. In order to do this strategic direction have been created to identify the correct
strategy for the company. The above research finds that HSBC must formulate a cost leadership
strategy to achieve competitive advantage over its competitors. It can be said that implementation
process of strategy may face various challenges. The organisation must do properly planning before
formulating any strategy. Thus it can be said that the development and implementation of strategies
helps in achieving cost advantage over the competitors.

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