BUS4001 Report: In-depth Analysis of HSBC's Business Environment

This report provides a comprehensive analysis of HSBC's business environment. It begins by explaining HSBC's market structure within the financial services industry, highlighting its international network and diverse product offerings. The report then defines stakeholders, stakeholder analysis, and shareholders, applying these concepts to HSBC by identifying key stakeholder groups and evaluating their influence and needs. Furthermore, the report employs PESTEL analysis to identify critical issues facing HSBC in both domestic and international markets, considering political, economic, social, technological, environmental, and legal factors. The analysis examines the impact of these factors on HSBC's operations and strategic decisions. Finally, the report concludes by justifying suggestions for improvement based on the overall analysis, offering insights into how HSBC can navigate the challenges and opportunities within its complex business environment.

UNDERSTANDING THE
BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................................3
TASK-1.........................................................................................................................................................3
Explaining the market structure under which the organization operates..................................................3
TASK 2..........................................................................................................................................................4
Defining stakeholder, stakeholder analysis and shareholder terms..........................................................4
TASK-3.........................................................................................................................................................6
Identify critical issues facing the organization both in the domestic and international market................6
Environments..........................................................................................................................................6
TASK 4........................................................................................................................................................10
Justifying answer and provide suggestions for improvement................................................................10
REFERENCES..............................................................................................................................................13

INTRODUCTION
Business environment is defined as collection of all conditions, and influences that
surround and affect it in two different manners such as positive and negative. It encompasses key
factors whether internal or external that affect environment of specific company or business. The
current study will be based on HSBC, which falls under list of the biggest and most successful
banking services organizations in the world. The assignment will define an overview of chosen
company, including its legal structure, purpose/operation, main objectives and market structure,
which affects organizational behavior in looking to achieve competitive edge. It will explain how
firm apply stakeholder analysis procedure to determine its stakeholder groups and to evaluate
their influence as well as needs. Furthermore, the report will highlight selection of appropriate
business analysis framework or tools to determine problems facing by company in international
and domestic market environments. Lastly, the assignment will justify suggestions for
improvement based on overall analysis of this study.
TASK-1
Explaining the market structure under which the organization operates
The market structure of HSBC is that they provide financial services and products that are
related to governments, corporates an institution worldwide (Ngibe and Lekhanya, 2019). The
products and services of the company focuses on offering different career opportunities in
different areas that are banking, market operations, and global research market and security
services. The structure of the company focuses on building partnerships with a different
corporate and government clients which will help them to achieve consistent along with long
term performance. they sent of international network is it helps in connecting emerging and
mature markets along with it also covered key growth areas. The product and services that are
served by the company includes prime services, research and analyzes, security services,
transaction banking and sales and trading. They believe in serving their customers by building
team of relationship manager and product specialized along with this they also work that is to
build comprehensive understanding between their each client’s exports their financial
requirement and by developing services to meet different needs. The marketing structure of the
banking sector keeps focusing on understanding how it can be measured by the market
concentration. The market structure of the company helps in understanding what is the industrial

lifecycle, strategic behavior of individual banking firm, technological changes, government
regulations and supervisions plays an important role in the company that needs to be considered.
Structure of the company behavior at the time of achieving the competitive advantage that is
because of different types of ideas and behaviors of different people who are working in the
organization along with this the company also have to face different issues that is at the time of
operating his business in new markets as different customers or the individual have different
culture who live in other countries. The competitive advantage of the company is its innovation,
customer convenience which is very important for achieving all the objectives that are related to
competitive advantage along with this the strength of the companies is strong global presence
that is across several countries (Bilan, 2019). The services and the products that are offered by
the company are very unique along with this they have global features that accepted across the
world.
TASK 2
Defining stakeholder, stakeholder analysis and shareholder terms
Stakeholder-
This term is defined as a group or individual that has a high interest in any activity or
project of a company. They impacted by the results of a project and have interest in their success.
The primary stakeholders in a corporation are their workers, customers, investors and suppliers.
Shareholder-
This term is utilized to denote any company or person that has ownership of minimum
one share in specific organization stock or in mutual fund which help to make them a partial
owner (What is a Shareholder, 2021). Shareholders play vital role in the context of business
growth and success.
Stakeholder analysis-
This term is quite different from above two, as it described as procedure of determining
those people who are interested in particular task or influence it in varied manner. With the help
of this process, marketer may systematically collect and analyze qualitative information to

identify whose interests and needs will be taken into consideration while developing and
implementing a program, strategy or policy for business success & progress.
Implication of stakeholder analysis in regard to HSBC-
Here, this strategic concept is use to determine stakeholder’s groups of company and to
evaluate their needs & influence (About Stakeholder Analysis, 2021). It applies in form of table,
which define four category of stakeholder groups and then interpret their influence and needs
related to HSBC success and growth.
Keep satisfied-
 Government
 Owner
Manage closely-
 Investors
 Manager
Monitor-
 Workers
Keep informed-
 Customers
Keep satisfied (High power and interest)-
As discussed in above table, government and business owner are those stakeholders, who
are highly interested in success of HSBC business and its growth in market or all over the world.
The needs of this stakeholder group is almost similar as they both seek to make organizational
projects more successful, which in return provide valuable benefits to them in term of increasing
GDP, sales and profitability (Sapapthai and et. al., 2020). With the help of offering financial
services through organization, government has taken initiative to enhance living standard of local
people.
Manage closely (High power and low interest)-
Business investors and managers are those stakeholders of HSBC, who hold high power
to manage business practices and to take decision at behalf of owner. They need to grow
company even better in its sector, which is quite important, but still they may have low interest
in success of it, because investors & manager have great opportunity in market, which enable
them to obtain more benefits than now. There are many brands exist in financial sector, who may
provide advantages to investors in term of increasing their investment rates.
Monitor (Low power and high interest)-

Employees within any organization including HSBC have low power related to decision
making, strategy formation and other areas, but they are interested to perform for longer with
well reputed brands, like chosen one. Just because of having low power, still having interest to
work with company, many people quit their jobs, which put negative influence upon brand in
term of maintaining and balancing operational efficiency that is quite hard to do, without having
strong workforce.
Keep informed (Low power and interest)-
Some stakeholders of company may influence not that much upon business growth,
because they obtain benefits from it. But some stakeholder may influence negatively and impact
sales of company, because they hold low power which give them change to switch and also have
least interest. It is not beneficial for HSBC growth in market when its customers chosen another
brand for obtaining same services which their earlier firm offer to them.
TASK-3
Identify critical issues facing the organization both in the domestic and international market
Environments
It is very important for the HSBC to analyze the business environment it faces which is
All the factors that come under external business environment create a unique set of challenges
and opportunity for the company. Business environment helps the company owners and
managers so that they can deal good control over internal environment of the business along with
it also covers day to day decisions.
The analysis of business environment is very important because it also helps the company to
know different types of natural disasters which will result in having direct or major impact on the
businesses at the time of performing different activities.
PESTEL Analyze help the company to deal with the different types of operating challenges
which is says by the company that our macro environment other than competitive forces.
Political factors
HSBC holding company has to face different types of factors that directly impact the long term
possibility in both international and national countries and markets. The companies operated in
several countries and have to face different types of political system risk an environment. The

different political factors the company had to face at the time of entering on investing into new
countries or certain markets are
• Different types of risk data related to military invention
• Different Paris and trade regular shatter related to financials.
• Antitrust loss data made for the banks
• Pricing regulations and wage legislation
• Mandatory employee’s benefits.
Economic factors
This is the other factors that impact the operation of the company data based on both national
and international markets. On the national ground the company do not have to face so much
impact because he know what are the needs and desires of its customers but on the other hand on
the international countries there are different opinions of the customer and for fulfilling it the
company had to make different types of strategies. The economic factors the company had to
face up
• The company had to keep focus on what type of economic system in countries I required at the
time of its operations (Cordeiro, 2019)
• Inflation and interest rates
• Different business cycle stays that includes prosperity, recession and recovery
• Different styles of education level in the economies
• From competitive advantage off national and international sectors in a particular country
Social factors
It also affects the company on the basis of both national and international markets as today's
world there are different culture of the organization in the environment (Nord and et.al., 2020).
the beliefs and attitudes how the population plays an important role that how the marketers of the
company plays an important role in understanding the customers of different countries or the

markets along with this how they make strategies that are based on designing the marketing
message for the bank industry consumers. The analysis of social factors is
• They have to select different demographics and skill level of the population on both
international and national markets
• Different class structure, power and hierarchy structure in the society.
• They have to keep focus on cultural data related to gender roles and social conventions
• Leisure interest.
Technological factor
It also have impact on the company on the international national markets as in national the
company uses the technology which is passed descriptive an various industry across the board
but on the other end the technology used by the companies are also banned because they in their
company that types of technology are not allowed. They have to face the issues that are related to
technological factors are
• Different types of impacts on the value chain structure in financial structure
• Several countries have different rates of technological diffusion
• Technologies impact upon the product and services that are offered by the company
Environmental factors
In this the impact data faced by the company on the international national grounds are related to
different seasons and law (Namdarian and Naimi-Sadigh, 2018). As different countries have
different rules and regulations for the different product and services data offered Weather
Company. At the time of entering new market the company have to focus on the environmental
standards that are required to operate in that market data related to
• Air and water pollution regulation
• Waste management
• Ecofriendly attitudes toward green or ecological products

• Weather in climate change and law regulation data related to environment pollution (Feldmann
and Teuteberg, 2019)
Legal factors
At different countries the company had to face different types of legal framework that is to
protect their intellectual property rights in the organization. Before entering the new markets the
company had the face related to legal factors are
• Discrimination laws
• Different types of employment and health and safety laws
• Data protection
Porter 5 forces of HSBC Holdings are
Bargaining power of buyers
There are many types of suppliers in the company who compared the forms according to the
product and services better offered that means that the buyers have few options to buy and have
no control on the prices whether that is international or national markets. The company has to
make sure that he has huge customer base it will result in more customer loyalty factor and
weakness the bargaining power of them.
Bargaining power of suppliers
The company had to keep focus on expanding and growing their business on the international
markets as suppliers are very low in some countries like bank capital which are named as
depositors when they compare the financial products with the other farm that is at the time of
making decisions better related to drawing out capital (AlSharji, Ahmad and Bakar, 2018). And
in the company the bargaining power of suppliers is medium end they are more likely to expect
the high prices
Threats of new entrants
In this industry the threat of new entry are very weak because of different economies of scales
which are very hard would you buy the banking sectors. The company has to see what are the

scales at the time of expanding their business from national to international business as for the
new firms it result in making the production process costlier.
Threats from the substitute products
The company had to keep focus on this because at the time of expanding their business to the
new markets the company will face different types of banks who are giving the services same.
Let us substitute for HSBC holding company is very high (Popovič and et.al., 2018).
Rivalry of existing players
For the company their rivals are very low and very big games that result in clearly showing what
the action is taken by the firms along with this which is also noticeable to everyone. Whether it is
national or international markets the company always focus on appreciated products and
strategies that will help them to minimize the effects that are suffered by rival’s actions and
retain the customer base along with its market position.
TASK 4
Justifying answer and provide suggestions for improvement
Key performance indicators (KPIs) are one of those strategic frameworks or techniques
that has been used by many brand or organizations to gauge their overall long and short term
performances (Amrani and Najab, 2020). It helps to identify organizational financial, strategic
and operational achievements, especially support to make a comparison with those other firms
that has operated within similar industry.
By considering the annual report of HSBC, in which it has used many key performance
indicators, it can be evaluated that development of its venture with reference to short and long
term performance, grows little bit slower. According to its financial performance indicator, in
2019 firm’s basic earnings per share is 0.19, which is not really good for company as it makes it
unable to beat their rivals and give touch competition to them.
It uses capital ratio, profit margin and earning ration as KPIs to show their business
success and financial performance in sector. These indicators define that company may require to
conduct more attempts to perform effectively and successfully in market, which is quite
essential. Its venture development towards success may get slow that is not really good for its
brand image in market.

In term of business development, HSBC has taken initiative to overcome gender
diversity, increase customer’s satisfaction and to conduct sustainable business practices, which is
actually quite essential to do for any brand. These type of initiatives may contribute to its venture
development and enable management to enhance longer term performance. But still there is
something lack, for instance, the financial and non-financial measures of performance in regard
to HSBC is not balanced. As firm earning is less than its investment.
 It recommends in the context of firm that it can use new and existing approaches to
increase its productivity, profitability and performance level, more than competitors in
market. Its management can develop strategy and plan to make huge investments in
technology, which enable them to grow and enlarge customer base, which is really very
important for any brand to have as it put positive impact on brand image and market
share (Rashid and et. al., 2020).
 When HSBC make investment in technology, it can enhance its operational efficiency
and capability, which allow workers to cater satisfactory services to each customer in
effective and systematic manner.
 Another approach, which company can use and apply for their benefits and long term
success is that they can engage its key stakeholders while taking decision for managing
business practices into global level, where firm faces a lot of challenges due to intense
competition and regulations. With the help of stakeholder’s engagement, management
can obtain many ideas which enable them to grow their venture even better than last few
years and make it successful in market, where changes have been taken place due to
COVID-19.
 For further success and progress, HSBC can build up a strong workforce, under which
each applicant is able to perform effectively by making flexibility in their nature as it
helps to lead market and serve the best to customers. With strong and skilled employees,
firm can identify market needs, factors in external business environment and any kind of
change that will take place and affect venture in negative manner.
 All above suggestions in form of techniques and methods are beneficial and important for
development and progress of brand, which it will take into consideration and obtain
benefits from these for longer time period in term of gaining competitive advantages,
increasing profits margin and revenue.

CONCLUSION
By summing up above analysis, it has been identified that company has obtained a lot of
advantages while operating into public sector. It has achieved its business objectives and gained
competitive edge, by working according to market structure that has affect brand behavior in
positive manner. Along with this, firm has taken initiatives to consider their stakeholders needs
and expectations, which enable it to overcome their negative influences and allow to enhance
positive that help to increased customer base and profitability. Furthermore, from above analysis,
it has been concluded that management has developed appropriate strategies and plan that assist
overcome key issues in term of intense competitive environment and legal problems that it has
faced while operating at national and international level. Organization has increased its
productivity and performance extent, by following suitable and appropriate recommendations
that has been stated above in the context of its growth.