HSBC Bank: Business Environment Analysis, KPI Evaluation, and Strategy

This report provides a comprehensive analysis of HSBC Bank, examining its market structure, stakeholder relationships, and the influence of macro-environmental factors. The report begins by identifying HSBC's market structure, which is described as a matrix organizational structure, highlighting its benefits and drawbacks. It then defines and differentiates between stakeholders and shareholders, followed by a stakeholder analysis to identify key groups and their interests. The report applies PESTLE analysis to assess the impact of political, social, technological, legal, and environmental factors on HSBC's operations. Furthermore, it evaluates the bank's development using key performance indicators (KPIs) to assess its long-term performance and strategic decisions. The report concludes by summarizing the key findings and implications for HSBC's future business strategies.

Understanding the business
environment

TABLE OF CONTENTS
.........................................................................................................................................................1
INTRODUCTION...........................................................................................................................3
TASK -1...........................................................................................................................................3
Identifying and explaining the market structure of the HSBC bank (600).................................3
TASK -2...........................................................................................................................................4
Defining the term stakeholder, shareholder and stakeholder analysis........................................4
TASK -3...........................................................................................................................................6
A. Explaining five macro environmental factors that impacts the working of the organization 6
B Explaining importance of the porter five forces model...........................................................7
TASK -4...........................................................................................................................................8
Evaluating the development of the business through using KPI.................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment is one that consist of several external factors that needs to be
monitored from time to time so that better functioning of the business might be assured for the
long run. Further, present report is based on the HSBC bank that is well-known bank for
providing variety of services across various regions. Also, the report will discuss briefly about
various types of business organizations and will outline the functions of each of them so that
better understanding might be gained. Also, the report will analyse in detail about stakeholder,
shareholders and will apply the stakeholder analysis so that the people need and influence might
be found out in detail. Moreover, the report will identify the impact of external environment
through applying the Pestle analysis. Lastly, the report will identify certain key performance
indicators through the annual report and identify the performance of the firm for in the long run.
TASK -1
Identifying and explaining the market structure of the HSBC bank (600)
HSBC bank is one that is known for providing various financial services and products so
that customers are able to live happy and stable life. Also, it is known for providing services
through online banking app and thus its has increased the market share in most of the areas in
most efficient manner (Ślusarczyk and UL HAQUE, 2019). Moreover, the purpose of the bank
is to provide large opportunities to the world through providing unique expertise and services.
Also, it aims at uniting the people, capital and ideas together for the growth and progress thus
creating the better place of living.
Furthermore, in context of legal structure it can be said that HSBC bank is private bank
that is operating in various regions and is systematically controlled by government authorities
and laws so that no things are conducted illegally. Moreover, the business are organized in way
that aims to provide the maximum benefits to the owners and is focused on increasing the
operational efficiency (Gogokhia and Berulava, 2021). Also, main objective of the bank is to
become the global leader across the cross border and to provide outstanding customer services
across various regions
Also, when market structure of the organization is been looked that it can be said that it
follows matrix organizational structure where there are separate chains of commands and
employees at the workplace need to report more than one boss in the organization. Furthermore,

the major benefit of HSBC bank while using such type of structure is that it is able to retain the
expert teams through the overall life of the project and all type of project structures tend to
develop team spirit and morale on the highest level. Moreover, this structure seems to be best
when there is requirement of efficient use of human resources across various levels. Also, the
structure tends to build collaborative working environment and provides greater flexibility in
various business operations. Furthermore, this structure requires that all functional and project
supervisors are communicated directly in the best manner (Abu-Rumman, 2021). Even though,
HSBC bank is able to maintain the bets brand image using this type of structure in spite of it this
structure might not prove useful because there are higher chances that there would be lack of
clarity among the various role and responsibilities of the employees that will further cause
wastage of resources and inefficient working of various banking operations. Furthermore,
chances of conflicts between the functional heads and project managers are also very high that
will create negative working environment that is not good for the growth of the company in long
run.
HSBC banking services due to this structure are very low as the decision-making process
is very slower and hence due to this reason things are delayed most of the times. Thus, it can be
said that this structure is essential for the bank like HSBC that is operating on the large scale as it
helps in increasing the efficiency through ensuring proper work management and reporting
across various departments (Moktadir and et.al., 2020). Moreover, in cases like pandemic when
there was the remote working this structure would be helpful as it would assure that there is
greater transparency in all the working structures and also corrective actions if required might be
taken on time. Furthermore, it had made the organization more flexible and due to this reason it
is able to easily adapt to the changing business environment and take strategic business decisions
in the best possible manner. Moreover, all employees of the HSBC are motivated enough to take
all assigned responsibilities and challenges in positive manner without having much resistance.
TASK -2
Defining the term stakeholder, shareholder and stakeholder analysis
Shareholder is person or the company that owns certain amount of shares of the
company and are subjected to have share in profits within the company (Korcsmáros and
Šimova, 2018). Moreover, there are large number of shareholders of HSBC group and these have

made company reach to greater height of success from the amount in from of shares invested by
them. On the other hand it can be said that stakeholder is the ones that are having interest in any
decisions or activity that is ben conducted within the organization during the specific period.
Also, shareholder analysis is one best tool that helps any business for the future planning and this
is been described in detail as follows:
Thus, from the above chart it can be said that shareholder analysis helps in identifying all
the important people that are part of organization and helps in analysing how these might be kept
satisfied with the business and policies in the long run. Furthermore, it is part of the stakeholder
management and is described through four elements where power is depicted on y-axis and
interest on x-axis. Moreover, the four categories are ben described as follows:
Keep satisfied : These are the group of people that have high power and low interest
groups and HSBC bank need to ensure that they are keep updated from time to time. Also,
people are mainly the existing customers the bank (Calabrese, Iandolo, Caputo and Sarno,
2018).
Managed closely: These are the ones that have high power and high interest within the
business and further they need to be fully engaged and collaborated within the business.
Moreover, it consists of the owners of the HSBC bank that needs to be looked upon.
Monitor: It consists group of people that have quite low power and low interest with the
company and these just wants the basic information and details about the business and its
working. For instance : the creditors of HSBC bank falls under this category.
Keep informed: These are low power and high interest stakeholders group that are
capable of offering great insights and ideas about the project. For example: potential investors of
the HSBC bank.

Thus through classifying stakeholder under various groups it is able to conduct various
activities that would satisfy maximum needs of these individuals and also it will allow the bank
to diversify its operations into newer regions. Moreover, when one's needs are closely identified
than bank thinks on developing strategies that would maintain the satisfaction for longer time
period (Akpoviroro and Owotutu, 2018). Also, through these analyses the firm is able to
anticipate the potential problems that might occur in the future an also able to prepare proper
action plan in advance so that it does not harm the working of the bank and create negative
working in the future. However, too much dependency on the stakeholder analysis would only
cause the problems for the bank and will slow down the decision-making process. Also,
sometimes grouping of shareholder might be done in biased manner that will further decrease the
efficiency and will result in wrong results
TASK -3
A. Explaining five macro environmental factors that impacts the working of the organization
The five macro environmental factors that have impacted the working of the HSBC bank
on the large level might be analysed through applying PESTLE and these are as follows:
Political factors: These are the factors that impact working of the bank both positively
and negatively depending upon the situations. Moreover, to achieve the success in the changing
banking industry it very much required that there is political stability within the business. Hence,
in times of political instability it has been seen that banking operations of cited firm are affected
on large scale as services might not be provided in times of any political crisis. Moreover, there
are various activities that are suggested by the political parties in context of consumer protection
and thus such restrictions might also affect the working of the business in any particular market
regions.
Social factors : Society culture and way of carrying out certain things have also impacted
HSBC on the large scale (Vrbka, 2020). Moreover, in the current times it has been seen that
people are more interested in spending money in leisure activities and thus based on that HSBC
understand the market needs and design marketing message so that more people are attracted
towards the bank. Also, society encourages the entrepreneurship and hence to create the positive
impact HSBC provides funds at lower interest rates to the individual for promoting development
of society and providing the best opportunities.

Technological factors: Technological factors are ones that need to be considered by each
company that aims to expand and sustain in target market for longer time period. Also, due to
continuous technological developments the bank has also tired to conduct all it operation's
online rather than offline (Belas and et.al., 2019). Thus, due to some extent it helped HSBC bank
to conduct the operations even in those regions where the reach is limited. Furthermore, bank has
installed digital technologies at its various branches such as ATMs, artificial intelligence,
chatbots etc. Moreover, thus technological advancements had provided ease in working of bank
as more data might be stored and accessed easily anytime and anywhere. Also, the cost of
working had also been reduced to the larger extent thus allowing the bank to invest in other
important areas of the business.
Legal factors: There are various legal factors that not only impact the banking operations
but also create stressful working culture. Also, legal laws such as employment law, health and
safety law, discrimination laws etc. need to be followed in strict manner and decisions need to be
made accordingly so that it does not create negative working environment (Kiseľáková and et.al.,
2019). Furthermore, HSBC has clearly stated such policies within its official website and in
paper properly so that better transparency might be maintained for longer time period. This will
also help in building the customer loyalty and will help bank in gaining competitive advantage in
all its target markets
Environmental factors: It is known that different markets have certain environmental
standards and hence it needs to be properly followed so that profitability of bank is not impacted
in any way. Also, HSBC takes special research while entering into any new market so that
environmental standards are completely known such as recycling methods, climate change, air
and water pollution, waste management etc. so that working is not impacted. Thus,
environmental factors are positive for any business if these are evaluated before only.
Thus, it can be said that these are the external factors that have to be analysed while
planning to bring any kind of change within the current banking services.
B Explaining importance of the porter five forces model
Porter five forces is model that helps in analysing the competitive forces that affects the
industry and further analyse the industry weakness.
Threat of entrants: Strong brand image of the firm is developed in the market and hence
the bank is not affected by the entrance of new entrants within the industry on large level. Also,

small banks that are existing in UK does not have enough facilities that are provided by the
HSBC bank.
Bargaining power of customers: It can be said that this factor is very low of the
company as there are various banks in UK that claims to provide specialized services but even
though they are not able to do so because of the limited customer base. Hence, due to the
enhanced customer loyalty and brand image it is able to rule in the market in most efficiency
manner
Bargaining power of suppliers: It is very low for the quoted firm and Currently the
bank is involved in using the special facilities for various external agencies so that it is able to
develop the best company culture for its employees and also learnt how to work effectively.
Hence, HSBC is charging different prices in various markets.
Rivalry in the market: This factor is medium to high as there are various competitors
that are operating in UK market and are providing similar services as of HSBC bank (SWOT,
Porter and PESTEL analysis of HSBC Holdings Plc, 2022).
Threat of substitutes: There is greater possibility that similar service and products of
HSBC bank are available in the market but chances are low that they are same prices.
TASK -4
Evaluating the development of the business through using KPI
KEY PERFORMANCE INDICATORS
Financial Metrics
Revenue 49552 million
Expenses 1.8 billion
Assets 2957939
Loans and advances 1045814 million
Customer Metrics
Client Satisfaction score 6/10
New Accounts 9123

Deposits in bank 101152
Process Performance
Total accounts 157 million
Operating profit per employee 1.96 million
Sales per Branch 83.42 million
Thus, from the above report it can be said that short term performance of the HSBC bank
is goods in terms of the increase in loans and advances to the customers by eight billion in 2021.
Also, the cash balance increased by the 32% from the previous year that is goods sign of success.
Furthermore, liabilities had also been decreased by the 2% thus current growth of bank is on
consistent basis that is also positive sign for success of the company. However, for the long term
performance it is recommanded that HSBC need to consider opening more rural branches in
rural area and innovative services so that more people might be attracted for deposits and
purchasing of other banks.
CONCLUSION
From the above report it can be concluded that HSBC has strong business and
organizational structure that has helped it to achieve various long and short term objectives.
Moreover, the study had identified in detail role of the stakeholders and its impact on the
business through applying the stakeholder matrix in detail. Furthermore, study had described
several macro environmental factors that influence the working of business in long run. Also, to
analyse how to gain competitive advantage in the target market both nationally and
internationally porter five forces analysis had been conducted under this report. Moreover, the
study had analysed significance of measuring continuous success in various business operations
through analysing key performance indicators from the annual report. Lastly, certain
recommendations will also be provided to the bank so that it is able to increase financial
performance in future and maintain the brand image among large number of customers.

REFERENCES
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online
SWOT, Porter and PESTEL analysis of HSBC Holdings Plc. 2022. [Online]. Available
through:<https://phdessay.com/swot-porter-and-pestel-analysis-of-hsbc-holdings-plc/>.