Detailed Report: HSBC Bank's Strategy and Change Management Approach

This report provides a comprehensive analysis of HSBC Bank, focusing on its strategic planning and change management processes. It begins with a background of the company, including its market size, fintech app usage, the impact of COVID-19, and sustainability targets. The report critically explores the bank's strategy planning process using William’s strategic management model, covering elements like mission, analysis, choice, implementation, and evaluation. Furthermore, it analyzes the McKinsey 7S change management model in the context of HSBC, detailing the importance of strategy, structure, systems, style, staff, skills, and shared values in implementing organizational change. The report also includes a Porter's Five Forces analysis and PESTEL analysis to assess the external factors affecting HSBC Bank, such as political, economic, social, technological, environmental, and legal influences. Finally, the report offers recommendations based on the analysis.

Change management

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Section 1..........................................................................................................................................1
1.1 Background of company........................................................................................................1
1.2 Critical exploration of strategy planning process along with using William’s strategy
management model......................................................................................................................2
Section 2..........................................................................................................................................3
Critical analysation of McKinsey strategy change model in context of HSBC..........................3
Section 3..........................................................................................................................................5
Recommendation.............................................................................................................................8
CONCLUSION................................................................................................................................9

INTRODUCTION
Change management is one of important component that allow business to implement change in
business in effective manner. This project report includes HSBC bank which is a UK based
financial organisation that was first identified in the year 1865 in UK. It is a business that
provide different types of financial information about business (Akhtar and Palagiano, 2018).
This business is providing different types of banking services like commercial banking, retail
banking, global banking, wealth and personal banking to customers. It also allows business to
manage wealth of individual in effective manner. This project report includes background
information of HSBC bank along with market size, impact of covid-19, fin tech apps and other
things. It also critical analysation of Mckinsey change management model in business. It also
includes analysation if PESTEL and porters five forces model.
MAIN BODY
Section 1
1.1 Background of company
Market size of bank: Market size of HSBC bank is large as it is consider as 2nd largest bank in
UK in context of total assets possess by business. It has around 6.75% of marketing share in
business. This bank has around 681.15 billion GBP assets that allow them to develop strong
position in business (Market Share and Rank (among banks in the United Kingdom), 2022).
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Figure 1: Market share of HSBC Bank in UK
Fin tech use apps used by bank: There are different types of technological application use by
HSBC bank for purpose of running their operation (Do and Lyle, 2022). It is accepting different
payment method like paytm, Google, pay, Apple pay, Amazon pay and many other methods.
This business is also using different application for purpose of carry out their operation like HR
software, financial accounting software and many more.
Impact of covid-19: Covid-19 create impact over business of HSBC bank as due to this, many
businesses has faced loss and due to which it does not allow this bank to sell their products to
them. It is also identified that profitability share of company has also reduced dur to this
pandemic (Buschow and Suhr, 2022).
Net zero target sustainability: NetZero is a term that is used to attain a balance among emission
produced by business and also removed from atmosphere in order to reduce global warming.
HSBC is also contribution for attaining this term by offering funds to business who are
protecting to environment.
1.2 Critical exploration of strategy planning process along with using William’s strategy
management model
Strategic planning can be described as process in which leaders of an organisation define vision
of company for future period of time an also identify goals and objectives of business. It is a
process that consist development of sequence of different goals attain by HSBC Bank to reach to
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its vision. It is a process that represent long term goals of business that allows them to divide it in
short term goals and prepare budget to attain these goals.
Strategic management model is one that was introduced by William F. Glueck that assist a firm
in order to make effective decision making (Dumas and Beinecke, 2018). It consist different
phase of strategic management model that create opportunity for business. Explanation of
different phase of this model in context of HSBC bank is mentioned below:
Strategic management element: In this stage, manager of HSBC bank needs to identify
mission, values and goals of business. It is also important for business to make different
decisions in business.
Analysis and diagnosis: It is a stage in which managers of HSBC bank needs to diagnose their
environment in order to identify various threat and opportunity for business. In this, managers of
HSBC bank need to identify what are opportunity and threat present for business.
Choice: In this stage, managers of HSBC bank need to consider different alternatives to
overcome of threat present in business and also develop an effective strategy for business.
Implementation: It is a stage in which, it is important for managers of bank to match plan,
structure, policies and resources along with strategy of company.
Evaluation: In this stage, managers of HSBC bank needs to ensure that strategy implemented in
business is meeting to objectives of firm.
Section 2
Critical analysation of McKinsey strategy change model in context of HSBC
McKinsey model is one of change management model that was introduced by McKinsey and
their consultant in the year 1980. There are different types of difficulties faced by business and
with adoption of this model, managers of HSBC can successfully solve the root cause of
problem. It is a model that consist several component including strategies, staff, structure, style,
share values, systems as well as skills (Galli, 2018). There are different changes occur in
business due to covid-19 as in order to handle this situation effectively, HSBC Bank needs to
adopt different technologies in business. With adoption of McKinsey model, business is able to
implement changes in organisation in effective manner. It allows them to assist to both
individual employees as well as upper management of company to understand change in
effective manner. It also helps them to understand their roles in process of change in
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organisation. On basis of this model, managers of HSBC bank can also motivate employees to
implement changes in business. In order to implement this change management model in
business, manager needs to adopt all seven components of model which are divided among
category of hard and soft. Explanation of this model in context of HSBC bank are mentioned
below:
Strategy: It is an element that work as foundation for implementing change in organisation. It is
difficult for business managers of HSBC bank to convince employees and stakeholders for this
but with cleanly defined strategy, managers can make these stakeholders to implement changes
in business (Kadobera, 2018).
Structure: Organisation structure of a company should be set right in order to define clear roles
and responsibility of different person. It consists different roles, division and department of
organisation. It is important for HSBC bank in order to under role of each employee in order to
implement change in business. In order to implement strategy, business needs to define all
responsibility to employees in order to avoid confusion.
Systems: In order to implement change in organisation, it is important for business to view
organisation system as it helps to assess management of projects, work flow available in
organisation and other things. This organisation system will directly create impact over
functioning of HSBC bank as it is important for manager to ensure impact of change
management process does not occur in current operation of business.
Style: In this component, managers of HSBC bank will analyse that they need to made change in
different department of business. Leadership style is also depended on extend workplace culture.
It is important for managers of HSBC bank to create culture in which it is easier for them to
implement change in organisation (Kaur, Agrawal and Chaudhari, 2022)
Staff: It is one of important element as these staff members are directly working in an
organisation. In this, managers of HSBC bank need to assign right employees for right position
in organisation to implement change. For this, they also need to find out whether company needs
to hire more employees to fulfil their requirement.
Skills: There are various skills are required by a person in order to manage and implement
change in business. It is also important for HSBC bank to improve skills of employees to
understand how to use these technologies in business.
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Share values: It is one of component that is related to culture of business. It helps employee to
understand how to interact with one another. It is also important for business to understand what
type of values to be share by organisation. In order to complete the work in organisation,
business needs to take various initiatives that allow them to understand flexible schedules in
business.
Section 3
Porters five forces model
Porters five forces model is of industry analysis model which can be adopted by firm in order to
analyse environment of identify in which they are operating (Limna, Siripipattanakul and
Auttawechasakoon, 2022). It helps business to identify threat for business and allow them to
develop timely strategy important for making decisions. Some of these strategies adopted by
HSBC bank are mentioned below:
Threat of substitute: Products and service offered by HSBC bank has various substitute
as different companies are also offering same type of service. It creates threat for business of
company as customer can easily swich to other products and its results in negative impact over
organisation. There is moderate threat of this factor in business.
Threat of new entrants: New entrant enter in industry with new strategy that capture
market share of existing company. HSBC hank is a well-established bank in UK and there is less
threat of new entrant to this business. So, this this threat creates less threat for business.
Bargaining power of supplier: There are various suppliers of HSBC bank in market like
central bank of UK and other financial institution. Due to this, it creates less threat for this factor
over business of HSBC bank.
Bargaining power of buyer: Bargaining power of buyers are less in this industry as it is one of
multinational organisation which has number of customers available in all over world. These
customers can create much threat for bargaining in business (Love and Matthews, 2019). So,
HSBC bank has less threat of this factor in business.
Rivalry inside industry: Competition inside business is also one of threat for business
which create negative impact over profitability of business. These factors create negative impact
over business and its marketing share. There are various competitors providing same service in
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UK that create negative impact over business of HSBC bank. Therefore, there is high threat of
this factors for business.
PESTEL analysis
PESTEL analysis is one of external analysis which allow business to identify factors that create
impact over business. It identifies factors like regulation of government over business, changes
in technology, change in legal requirement of country, economic condition, changes in needs of
customers and environmental regulation. All these factors create impact over business of HSBC
bank in many contexts. Explanation of these component in relation of HSBC bank are mentioned
below:
Political Factor: It is one of important factor that consist regulation of government over
business operation. Government of UK has made various changes in their rules and regulation
due to which business of HSBC bank needs to face problems in market (Paquibut and Al
Naamany, 2020). Due to covid-19, government of UK is also made changes in their rules and
regulation. It also creates threat for business of HSBC bank in UK.
Economic Factor: Economy of UK has face situation of recession during pandemic situation. It
also creates loss for business of HSBC Bank as people does not have sufficient amount of money
in order to invest in products and service of business. But now situation is going back to normal
and government is providing support to business in order to helps them to overcome of loss. It
creates opportunity for HSBC bank.
Social Factor: Covid-19 pandemic create impact over people in many contexts due to which
habit of saving occur in minds of people. It creates opportunity for business of HSBC bank as
people are using baking services in order to save money.
Technological Factor: UK is developed country which has various technological resources.
HSBC Bank during the pandemic used these technologies as competitive advantage in market
(Pohl, 2022). These technologies help them to permit customer to conduct banking transaction
from other home. It also increases demand of Paytm, phone pay, Apple pay and other software
that allow customers to pay to other person in cashless mode.
Legal Factors: Legal factors are those factors which consist laws and regulation in business.
There is different regulation made by legal authorities due to Brexit and pandemic situation and
all these rules are consider by HSBC bank in order to carry out smooth operation in business.
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Environmental Factors: It is one of factor that consist environmental regulation, pollution,
sustainability and corporate social responsibility. HSBC bank is one of bank that is making
efforts to reduce use of paper for transaction of business. It is also following all environmental
regulation of business (Ratana, Raksmey and Dumitrascu, 2021).
Identification of threat and opportunity
Strength Weakness
 HSBC bank has strong position in
marketplace. This bank has good
financial position in banking sector.
 It is presently providing different
business groups like financial services,
private banking, investment baking and
commercial banking.
 This business has also diversify its
customer based in order to reduce risk
present in market (Simanová and
Stasiak-Betlejewska, 2018).
 It is one of large organisation as it is
providing its service in around 87
countries and has 275000 employees
working in its organisation.
 This business market in US is declining
that create problem for them.
 Retail banking of this bank is
comparatively low which create threat
for business.
Opportunity Threat
HSBC bank can also expand its operation in
some other countries that provide them
opportunities to expand its marketing share.
This bank can also diversity its portfolio to
expand its business operation.
It can also reduce its interest rate that allow
them to increase its marketing share.
There are various changes occur in government
regulation that crate threat for business like
covid-19 pandemic.
There is various financial crisis occur in
Economy of UK due to recession.
There is increasing competition in international
market that create problem for business of
HSBC bank.
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Porters generic strategy
It is one of model that was introduce by Michel porter in the year 1985. These strategies help a
business in order to gain competitive advantage. These strategies can be applied by business for
their offering in all industries. These generic strategies of Porter include cost leadership,
differentiation, focus and others. These strategies can be adopted by HSBC bank for purpose of
expansion of business. Explanation of these strategies in context of business are mentioned
below:
 Cost leadership: In order to gain competitive advantage, HSBC bank can adopt cost
leadership strategies. It is one of strategy which allow leaders to get competitive
advantage in market and also to increase sales of business (Thakur and Srivastava, 2018).
On basis of it, HSBC bank also complete with leader in effective manner. In order to take
advantage of this situation business needs to reduced cost for increasing profit and also
by increasing marketing share by charging lower prices.
 Differentiation: It is one of strategy adopted by business of HSBC bank that allow a
person to differentiate its products from competitors. In order to adopt this strategy in
business, HSBC bank can conduct research and development, needs to produce higher
quality of products and also to increase effectiveness of sales.
 Focus strategy: It is a strategy in business needs to focus on specific niche market
through understanding of market dynamics and also unique needs of consumer. It can be
done by HSBC bank through low cost and well specified products in market.
On basis of above discussion, it can be recommended to business of HSBC bank to focus on
focus strategy as it allows them to differentiate its products from its competitors (Zheng, Chen
and Shang, 2019). It is also important for business in order to reduce cost of business that allow
them to increase number of customers in business. On basis of this strategy, HSBC bank can take
competitive advantage in business.
Recommendation
It is recommended to business managers of HSBC bank to monitor external environment
carefully in order to identify threat on timely basis. It is important in order to identify changes
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occur in regulation of government. Monitoring of external environment allow managers of
business to be prepare to accepting challenges occur in business. It is one of important
component for a business that assist business to face challenges. There is various threat occur in
business for which managers of company needs to prepare whole team to face it in effective
manner that allow firm to maximise benefit of situation instead of getting loss.
It is also recommended to business for purpose of implementing effective change
management business. There are different changes occur in business environment related to
change in needs of customer, consumer trend and other things. All these create impact over
business and in order to overcome of it, business needs to prepare to accepting change. Managers
of HSBC Bank needs to provide proper training and development opportunity to employees for
this that allow them to implement changes in organisation in effective manner. It allow business
to take opportunity occur in market by implementing changes in business.
It is also recommended to business managers of HSBC bank to adopt various technological
changes in business as it allows business for purpose of taking competitive advantage. On basis
of technology, business can differentiate its products and service from those of competitors. It
also allows business to offer something new to customers that are according to their needs and
expectation. Due to pandemic, government made different restriction over people to going out
home. In these situations, technology helps business to allow customers to proceed transaction
from their home.
It is also recommended to business managers of HSBC bank to adopt effective leadership. It
allows them to provide guidance to team members in various manner. It is also important for
business of HSBC bank to influence action of team in order to implement new policies and
procedure in effective manner. It provide opportunity to firm to get more profit in business and
also get success.
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