Strategic Management Plan for HSBC Bank: An In-Depth Analysis Report

This report provides a comprehensive analysis of HSBC Bank's business strategy, focusing on both the external and internal environments. It begins with a PESTLE analysis to evaluate macro-environmental factors like political, economic, social, technological, legal, and environmental influences on HSBC's operations. The report then delves into an internal SWOT analysis, identifying the bank's strengths, weaknesses, opportunities, and threats. Porter's Five Forces model is used to assess the competitive landscape. The report also discusses relevant strategic management theories and concepts, leading to strategic recommendations aimed at improving HSBC's performance and financial stability. The analysis considers HSBC's global reach, capitalization, workforce diversity, and technological advancements, alongside challenges like competition and regulatory changes, to provide a holistic view of the bank's strategic position.

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

organisation. In context to HSBC bank, there is tendency of the organisation to focus
on the development by adopting the digital technology so that it can improve their
services but consideration must also be given to the distribution method. Therefore,
the bank uses the internet so that its services are reachable to the customers and also
make them aware with the latest trends that prevail in the global business. Special
facilities are used by the bank to advance their production and operations to get the
goals of the business. New technology which come in the market are used by the firm
which cost them more and they have to change working according to it.
 Legal factors: These are the factors which refers to the employment legislation and
customers laws and so on. With reference to HSBC bank, an organisation is required
to kno0w the legal and illegal framework in order to continue its business operations
successfully. A firm carefully evaluate the market before entering into it so that it can
gain the competitive advantage. The HSBC bank considers the discrimination law,
customer’s protection law, health and safety law, data protection and so on in order to
protect the intellectual property rights of the company.Different laws are applicable to
the firms which they have to follow. All these laws are applied to the firm as
government monitors and controls the firms.
 Environmental factors: There are different markets which have different
environmental standards that may impact the profitability of the organisation. The
countries have environmental laws and liability laws to protect the environment
(Shergill, and et.al., 2022). HSBC bank evaluate the environmental factors in which
the operations are being functioned and can impact the business which includes the
factors related the environmental pollution, waste management in financial sectors,
attitude towards and support for renewable energy. In such ways the bank can
contribute in saving the environment by supporting to the use of renewable energy.
Every market has its own issues of environment which firm has to follow and work
according to it.
By considering all the above factors, HSBC bank can make the effective strategic
decision in order to prevent the negative impact of the external environment and continue
business operations without any restrictions.
Evaluation and analysis of the internal environment
SWOT analysis

This is an internal analysis which assist the organisation in knowing their strength,
weaknesses, threat and opportunities that can help in gaining the competitive
advantage(Ancla, 2021). In relation to HSBC bank, the swot analysis have been done
as under:
Strengths Weaknesses
Global reach: The bank has various
branches across the world and provides its
services to the customers to meet their
financial needs. It has offices in 64 countries
and territories across the Asia Africa, Europe,
and south America north America and so on.
Highly capitalised: HSBC bank is
considered as highly capitalised company
and beneficial to all customers as well as
government of the nation. It do not rely on
the government for finance for the future
crises and considered as financially strong.
Diversified workforce: The organisation
have hired the highly skilled workforce from
various location who have different
perspectives, ideas that help the company in
building the brand image by providing
effective services(de-Madaria, and et.al.,
2022). This dedicated workforce share their
opinions so that the goals of the business can
be achieved easily. The organisation also
invest in the resources for the development
and mentoring of the employees.
Return on capital expenditure: The
projects of HSBC bank are executed
successfully which assist in building the
Cannot face challenges: HSBC bank cannot
tackle the new entrant in the market because
it products are not so innovative and
attractive that can encourage the customers to
get their financial services. So the bank can
lose its market share due the new entry
therefore, it is required to build the internal
feedback in order to deal with such kind of
situation.
Name changes: The HSBC bank set up its
branches in different countries with different
names which show the lack of branding as
the customers are not aware with the name
and offerings of the organisation. This
weakens the brand position of the bank.

revenue for the company. This enable the
company in getting the higher return on the
capital expenditure.
Hybrid working model: HSBC bank has
adopted the working model which provides
effective collaboration among the employees
and focuses on their wellbeing as well.
Opportunities Threats
Advance digitalisation: The HSBC bank
make huge investment in order to build an
online platform so that it can provide its
services through internet which assist in
enhancing the customers base and increase
the profitability of the organisation. This is
an opportunity for the bank to know their
customers better so that it can be able to meet
their needs accordingly.
Work on building strong position: The
organisation can build strong image by being
a safest bank for the depositors and set up
branches in its own name so that the
customers get remain aware with the services
of the bank.
Competitors: The organisation have many
competitors such as Citi group, standard
chartered bank, deutsche bank, bank of
America etc. which provide higher
competition to the bank. They bring new
technology in order to get more customers
and encourage them to switch for their
services and products. This can reduce the
market share and the profitability as well of a
business concern.
Changes in laws and regulations: This is
also threat to the bank because the laws and
regulations that are made by the government
can changed when the government changes
which may affect the profitability of the
bank.

VRIO Analysis- Every company builds it to offer some specific advantages to its target
market . This framework is an inner analysis which helps business point out the advantage
and supplies that give them a competitive contour. It is an acronym for the various
management of success which relates to the business itself. VRIO includes value, rarity,
imitability and organization.
 These 4 are explained below with the context of HSBC organisation.
Resources &
Capabilities
Valuable Rarity Imitable Organised Competitive
implications
Financial
Resources
Yes No No Yes Temporary
competitive
advantage
Brand
Awareness
Yes Yes No Yes Sustainable
competitive
Advantage
Leadership Yes Yes No No Temporary
competitive
advantage
Market
Dominance
Yes No No Yes Temporary
competitive
Advantage
 Financial Resources – It refers to the special needs that handle your product and
services and competence you provide . HSBC invested its funds in a merger between
HSBC and idea and now they are providing providing facilities to the people together.
Money is not rare every organisation has its own financial management. It is not
imitable because every co-operate has its own way to manage its funds. Yes it is

organised as these are invested in other types of resources like making network more
reliable. Thus its is a temporary advantage for the organisation.
 Brand Awareness – It means to which range the consumers are aware of the brand
name and what it specialises in which sector of market segment. HSBC has its brand
awareness among its customers because it is a old organisation among the new
players in the market. It is a very rare and important component for a brand to
maintainthe3 aided recall in the open market. It is imitable by the other brands and
organisation. It is organised in the terms of how to retain its customer and giving them
various type of offers in a specific time range. Thus it is a sustainable type of
competitive advantage.
 Leadership – It shows how it can maintain leadership in the market with other
competitors . HSBC has the leadership in the market in terms of its loyal customers
and in today's market the consumer is the king. Yes it is rare because in open market
no one can pull this off easily. No it is not imitable because it cant be maintained by
every organisation. No it is not properly organised by the company because after the
merger people are constantly changing from HSBC to other companies like Jio ,
Airtel . Thus it is temporary competitive advantage.
 Market Dominance – It shows how much or what amount of market is captured by
the organisation. It is valuable because it is maintained by a very few companies like
jio, airtel , HSBC It is rare because it can't be created and maintained easily. It is
imitable because some examples given above are maintaining its market dominance
for several years from now.
Evaluation of the competitive market using Porter’s Five Forces model
HSBC bank is the biggest financial service providers which make porters five forces
analysis to know the financial position of the organisation. It helps the organisation in
enhancing the profit through various strategies and gain the competitive advantage by
analysing the external environment (Voukkali and Zorpas, 2022). In relation to HSBC bank,
there factors are described as under that may impact the company in such ways:
 Competition in the industry: This indicates the competitors present in the industry
with their number of equivalent products and services. When there are less

competitors in the market so the company have an opportunity to charge the higher
process from the customers in order to gain profits. With reference to HSBC bank, the
organisation have various competitors in the industry such as citi group, standard
chartered bank, deutsche bank, bank of America etc. which create intense
competitions to get the attention of the customers(Wen and et.al., 2021). The rivals
engages in the competition for gaining the position and becoming market leader of the
industry. Therefore, an organisation should adopt the product differentiation strategy
in order to minimise the impact of the competitor’s action.
 Threat of new entrant in the industry: The power of the company can be affected
by the new entrant in the market because they bring innovation and new ways of
doing things. In context to HSBC bank, the new entrant can put pressure on the bank
through having a lower pricing strategy, reducing cost and provide new value
proposition to the customers. HSBC bank is required to manage all the challenges by
innovating new products and services that bring new more customers. The products
and services should be highly differentiated so that the customers are encouraged to
choose the new products. Currently the new entrants are Tesco, Sainsbury and other
organisation which provides the same services to the customers which force the
customers to switch for their produces and services. Therefore, the bank should make
effective research and development so that it can provide effective services to the
customers.
 Power of supplier: It refers to the cost of input of the goods and services that are
provided by the supplier to an organisation(Choi, Jeong, and Kim, 2021). The
suppliers of the HSBC bank includes the depositors and employees of the firm which
provide capital and services. The bargaining power of the suppliers are high because
all the operations of the bank are depend upon the revenue that are provided by the
customers such as larger companies and others. The supplier are powerful in the
financial sectors because they have high negotiation power to extract the higher
prices. The bank can tackle the bargaining power of the supplier by building effective
supply chain with multiple supplier. The bank also experiments with the products
with different material so that when the process are increased by the suppliers so it
can switch for another suppliers.

 Power of buyers: It refers to the power of negotiation for the lower prices and better
deal by the customers. This may affect the competitive strategy of the company as the
buyers have power to switch for another product when they are not satisfied with the
price of the products. With reference to HSBC bank, the profitability can be affected
as the bargaining power of the customers because they have higher ability to seek
discount and offers (Tanrıverdi and Lezki, 2021). Therefore, the bank can handle the
bargaining power of the customers by providing them innovative products and
services on the discount process. This enable the bank to get more customers and lead
the competition.
 Threat of substitute products: There are many products which are offered by the
HSBC bank to the customers such as financial services, advice for investment etc.
But, they are hardly replicated and have low threat for substitute. The needs of the
customers can be fulfilled by providing them products at lower prices with greater
efficiency. Therefore, the customers can switch for the products which provides such
kind of benefits. Thus, this problem can be sorted by the bank by being service
oriented rather than just product oriented. It should understand the needs of the
customers so that it can provides services accordingly to meet their needs.
Theories, concepts and models used for strategic management plan
Concept of strategic management plan
Strategic management is the process of managing the resources of a business concern
such as planning, monitoring, analysis and assessment in order to accomplish the goals of the
organisation. It assist the organisation in determining the vision, mission and values so that
the business can be run constantly and successfully(Cheng, and et.al., 2021). The
organisation makes various strategies by priorities the goals and allocation of the resources in
order to successfully completion of the operation of a business organisation. After making a
strategic plan, an organisation is required to implement the plan and then evaluate the
outcomes in order to identify the achievement of goals. This strategic plan make the
origination proactive which assist it analysing the situation before occurring any event. It also
provide the sense of direction to grow the business and get success in getting goals. The
strategic management plan is kind of roadmap that provide insight on the market trends so
that it can offers the process accordingly. The organisation is able to increase the market
share and profitability by providing effective services to get the positive outcomes. It assists

the organisation in enhancing their operational efficiency by determining the resource and
analysing the requirement of the budget to accomplish the objectives of the organisation.
Thus, it can make the business more durable and helps the organisation by managing their
strategic and operational plan.
Theories of the strategic management plan
Strategic management theories are the opinion, suggestion or the ideas that explain
the principles and applications of the strategic management. There are some theories of
strategic management plan which assist the organisation in taking the effective decision. The
theories are depicted in context to HSBC bank which are described as below:
 Resource based theory: This is a theory which helps the organisation in gaining the
competitive advantage by distinguishing the strategic resources from the other
resources. The strategic resources are considered as an assets which is valuable, rare,
difficult to imitate and non-substitutable(Büyüközkan, Mukul and Kongar, 2021). In
relation to HSBC bank, the company have valuable resources whether physical,
human capital and organisation capital resources. All the resources assist the
organisation in improving the effectiveness of the organisation so that it can overcome
the competition. But HSBC don't have rare resources so it can be imitated by the
competitors. The substitute are also available which can provide higher competition to
the bank.
 Agency theory: This is a theory which is used to understand the relationship between
the agent and the principal. For example the shareholder of the organisation are
considered as the principal and the executive of the company is considered as agent.
When the interest of the principal and agent are not same so this may arise conflict
among them and the disagreement between them leads to many problems. Therefore,
the organisation is required to minimise these situation through an effective corporate
policy. In relation to HSBC bank, the company is required to maintain the principal
and agent relationship for effective operations of the organisation.
 Contingency theory: This is a theory that focuses on the personality of the leaders
and the situation in which that leader operates. This theory provides the best way of
doing things and effective decision making upon a particular situation(Singh, Chhetri
and Padhye,2022). All the policies and practices that are made by the manager can be
effective and adjust with the changing environment. In relation to HSBC bank, the