A Detailed Report on HSBC's Entry Strategy in Global Markets

This report provides a detailed analysis of HSBC's market entry strategies, focusing on its expansion into foreign markets. It begins with a company background, highlighting HSBC's global presence and diverse services. The report then examines HSBC's expansion strategies, including concentration and the adoption of a universal banking model. The core of the report evaluates HSBC's foreign market entry strategies, particularly joint ventures and acquisitions, providing specific examples such as the joint venture with Qianhai Financial Holdings Co Limited in China and the acquisition of Royal Bank of Scotland's operations in India. It also explores the factors motivating these strategies, such as competition and the need to fill business gaps. The report concludes by summarizing the key findings and reiterating HSBC's successful approach to global market entry.

Running head: ENTRY STRATEGY FOR HSBC COMPANY
Entry Strategy for HSBC Company
Name of the student
Name of the University
Author note

1ENTRY STRATEGY FOR HSBC COMPANY
Table of Contents
Introduction................................................................................................................................2
Company Background................................................................................................................2
Expansion Strategy of HSBC.....................................................................................................3
Foreign market entry strategy of HSBC.....................................................................................4
Factors motivating entry strategy...............................................................................................5
Conclusion..................................................................................................................................6
References..................................................................................................................................8

2ENTRY STRATEGY FOR HSBC COMPANY
Introduction
Market entry strategy refers to planned distribution of the goods or the services to the
new target market. It is indicative of import along with export of the services that can help a
company in building its presence in the foreign country. The business can get the increased
sales in the event of entering a new market. HSBC is the largest banking services
organisation within the world which have the operations within 64 countries along with the
territories (Hsbc.com 2020). It helps the business in thriving and it ensures the prosperity of
economy that can help the people in fulfilling the hopes. This report elaborates on the
activities of HSBC and the expansion strategy of the company that have helped the company
in establishing its presence in the international arena. This report evaluates the foreign market
entry strategy of the company and the factors that have motivated the company to take
recourse to the strategies.
Company Background
HSBC is the British multinational investment bank which is the seventh largest bank
in the world. It is the largest bank within Europe that have assets amounting to US $ 2558
trillion that have established its reputation in the world. The company traces the origin to the
hong within Hong Kong and the present form had been established within London by Hong
Kong and Shanghai Banking Corporation.
HSBC helps the customers in taking care of the everyday finances which can help
them in growing their wealth. The company have the international network that have enabled
it offering support to the business, owners along with investors across the world. The
company provides various kinds of services like Personal Banking, Global Private Banking
and Financial Planning that have increased its popularity among the people. The company is
instrumental in providing diverse kinds of the personal services like current accounts and

3ENTRY STRATEGY FOR HSBC COMPANY
loans to the customers of the target markets. The company provides investment along with
the wealth management solutions that have helped it in supporting the clients so that they can
achieve the ambitions. The company works with the small enterprises along with the large
multi-nationals so that they can function in the effective manner. The company possess
financial strength which can help them in supporting the customers with the working capital
that can work to the benefit of the customers (Watson et al. 2018). The company have the
relationship managers who provide the financing for the buyers along with the suppliers
across the course of the trade cycle. It helps in providing the valuable advice to the business
that can help them in retaining the greater control over the cash that can help them in
managing the liquidity in the effective manner.
Expansion Strategy of HSBC
HSBC have depended on the aspect of the concentration that have helped it in
maintaining its hold in the market in different countries of the world. The company have
undertaken the cross-asset collateral management solution that have helped it in expanding
the presence in various countries of the world. It have improved the visibility of the bank that
have helped it in earning the profit margins in the market. It have been successful in bringing
the inventory in different business together that have helped the company in managing the
aspect of funding (Globalinvestorgroup.com 2020). The company have acted in the dynamic
manner pertaining to the business model that have helped it in implementing the changes for
satisfying the demands of the customer. The company have provided the international
network that have helped in connecting the developed markets. The company have developed
the retail banking business within the markets where it can achieve the profitable scale. The
company have the unrivalled global presence that have helped it in offering the help to the
clients so that they can take the part in the global growth opportunities. The company have
adopted the universal banking model that have helped it in meeting the diverse functional

4ENTRY STRATEGY FOR HSBC COMPANY
needs of the clients. The company have strengthened the business in Mexico along with US
that have helped in rebuilding the profitability of the firm (Eiu.com 2020). The company have
grown the revenue with the help of transaction banking products which includes the 9 %
increase in the Global Trade and Receivables Finance. The company have increased number
of the clients who carry out business in NAFTA area. The company have increased the
productivity in the UK branches with the help of online customer support along with the
appointment banking. The company is in the leading position for capturing the growth within
Asia. The company have accelerated the business growth within China’s Pearl River Delta
and developed the asset management so that it can reap the benefits from the growing
middle-class of Asia (Scmp.com 2020). It have helped the company in the area of market
penetration that have helped it in attracting the new customers. The expansion of HSBC have
helped the company in getting the frontal competitive advantage that have helped the
company in getting ahead of the competitors. The company have strengthened the financial
crime detection along with the investigation abilities that have helped it in providing the
superior service to the customers. The company have implemented the robust anti-money
laundering compliance programme that have helped it in gaining the competitive advantage
(Chinadaily.com.cn 2020).
Foreign market entry strategy of HSBC
The foreign market entry strategy that have been adopted by HSBC is joint ventures
that have strengthened its position in the foreign soil. The company have operated the
securities joint venture with that of Qianhai Financial Holdings Co Limited which is a
financial services form within China. It have helped the company in augmenting the strategic
focus in China that offers diverse kinds of services like equity research, debt underwriting
along with the brokerage solutions (Marques, Lupina-Wegener and Schneider 2017). The
company offers the structured financing along with the asset backed securities that have

5ENTRY STRATEGY FOR HSBC COMPANY
helped the company in bringing various kinds of services within China. The advantage of
HSBC exists on account of the fact that it owns the banking subsidiary based in Hong Kong
called The Hong Kong and Shanghai Banking Corp Ltd. HSBC Qianhai Securities Limited
would engage in the aspect of equity research and provide the valuable advice on the aspect
of corporate mergers. The establishing of the joint venture would help the company in
delivering the strategic commitment to grow the business within the framework of mainland
China (Tomy 2019). The 51 % ownership of HSBC have been found to be the maximum
percentage of the aggregate shareholding for the Hong Kong funded institution within the
framework of joint venture securities company.
The company have also made use of acquisitions that have helped in the arena of
expansion of company in the world. The company have acquired Royal Bank of Scotland’s
select operations within India that have helped in expanding scale of operations of the
company. It have acquired the retail banking business of Royal Bank of Scotland that have
increased the scope of the company (Chen and Yao 2017). The merger and the acquisition
have helped the company in the implementation of the corporate strategy that have increased
the value of the company. The company have experienced Merger & Acquisition (M & A)
banker in the main markets of the world that have aided to a great extent in the expansion of
the company. The company have on-the-ground M & A bankers in various countries like
Argentina, Indonesia, Japan, South Africa and Spain that have increased the reach of the
company in various parts of the world. The Doha Bank QSC which is based in Qatar have
merged the Indian business with that of HSBC Bank Oman SAOG that have further
strengthened the position of the bank among the other rivals present in the modern age
(Trudeau and McLarney 2017). Board of Directors of the Doha Bank have approved Scheme
of Amalgamation that have enabled the company in taking over and combining banking
business of HSBC Bank Oman with that of Doha Bank.

6ENTRY STRATEGY FOR HSBC COMPANY
Factors motivating entry strategy
There are various kinds of factors that have motivated the entry strategy of HSBC that
have helped it in engaging with the various kinds of markets in the world. It can help the
companies in the combination of the resources that can help them in gaining a strategic edge
within the market. The contractual agreement taking place in between the parties can help the
companies in sharing the profit and the loss that can help the company in the area of getting
security. The parties who are involved in the venture contributes certain part of the initial
capital to the project that aids in furthering the interest of the companies in the present age. It
can help in the alleviation of the financial burden for the banks that can help them in getting
the success on the world stage (Lasserre 2017). The external factor that have compelled
HSBC to take recourse to joint ventures is that it faces the increasing amount of competition
in relation to the traditional product markets that have made it to adopt the foreign entry
strategies. The competitors have made the in-roads in the traditional base of the banks of
deposit that have made HSBC to take recourse to the joint ventures. The emergence of the
new kind of technology have stiffened the competition for the banks which have compelled
the banks to make use of the strategy of the joint ventures (Lopes, Hoffmann and Amal
2017). The internal factor that have made HSBC take recourse to acquisitions is for filling the
business gap that can help in improving the performance of the company. The banking
operations is an important aspect that made HSBC make use of acquisitions that can help in
increasing the efficiency of the firm. It can help in consolidating and administering the
operational infrastructure that can reduce the institutional risk on the part of the company.
Conclusion
HSBC have made use of the expansion strategy of concentration which have enabled
the company in maintaining the grasp within the framework of the global market. HSBC have
made use of cross-asset collateral management which have expanded presence of company in

7ENTRY STRATEGY FOR HSBC COMPANY
different parts the world. It have been instrumental in improving visibility of bank which
have enabled the company in earning profits in the market. The business have strengthened
business within Mexico and US that have rebuilt profitability margin of company. HSBC
have conducted securities joint venture with Qianhai Financial Holdings that have helped the
company in increasing the business in China. It have helped the company in providing
various kinds of services like brokerage solutions along with equity research that have helped
in providing the benefits to the company.

8ENTRY STRATEGY FOR HSBC COMPANY
References
Chen, X. and Yao, L., 2017. Foreign Banks’ Entry and Local Banks’ Strategies in
China. Asia‐Pacific Journal of Financial Studies, 46(4), pp.635-660.
Chinadaily.com.cn, 2020. HSBC Plans JV With Shenzhen Qianhai - Business -
Chinadaily.Com.Cn. [online] Chinadaily.com.cn. Available at:
<http://www.chinadaily.com.cn/business/2015-11/03/content_22354818.htm> [Accessed 13
April 2020].
Eiu.com, 2020. HSBC Receives Approval For Securities Joint Venture In China. [online]
Eiu.com. Available at: <https://www.eiu.com/industry/article/1775643961/hsbc-receives-
approval-for-securities-joint-venture-in-china/2017-07-03> [Accessed 13 April 2020].
Globalinvestorgroup.com, 2020. [online] Globalinvestorgroup.com. Available at:
<https://www.globalinvestorgroup.com/articles/3691979/hsbc-collateral-concentration>
[Accessed 13 April 2020].
Hsbc.com, 2020. Global Banking And Markets | HSBC Holdings Plc. [online] HSBC.
Available at: <https://www.hsbc.com/who-we-are/our-businesses-and-customers/global-
banking-and-markets> [Accessed 13 April 2020].
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Lopes, A.L.A., Hoffmann, V.E. and Amal, M., 2017. Internationalization Strategies
Underlying the Performance of Foreign Banks in Latin American Markets. Latin American
Business Review, 18(2), pp.91-120.
Marques, J.C., Lupina-Wegener, A. and Schneider, S., 2017. Internationalization strategies of
emerging market banks: Challenges and opportunities. Business horizons, 60(5), pp.715-723.

9ENTRY STRATEGY FOR HSBC COMPANY
Scmp.com, 2020. HSBC China Securities Joint Venture To Quadruple China Research
Coverage. [online] South China Morning Post. Available at:
<https://www.scmp.com/business/companies/article/2176428/hsbc-china-securities-joint-
venture-quadruple-china-research> [Accessed 13 April 2020].
Tomy, R.E., 2019. Threat of entry and the use of discretion in banks’ financial
reporting. Journal of Accounting and Economics, 67(1), pp.1-35.
Trudeau, C. and McLarney, C., 2017. How can banks enhance international connectivity with
business customers?: a study of HSBC. IUP Journal of Business Strategy, 14(2).
Watson IV, G.F., Weaven, S., Perkins, H., Sardana, D. and Palmatier, R.W., 2018.
International market entry strategies: Relational, digital, and hybrid approaches. Journal of
International Marketing, 26(1), pp.30-60.