BM461 Global Business Environment CW1: HSBC PESTLE Analysis Report

This report provides a comprehensive PESTLE analysis of HSBC Holdings, a UK-based multinational financial services company, examining the external factors impacting its global operations. The introduction defines the global business environment and its impact on organizational decision-making, setting the stage for the analysis. The main body delves into each component of the PESTLE framework: political, economic, social, technological, legal, and environmental factors. For each factor, the report identifies key drivers of change and their implications for HSBC, such as governmental policies, economic stability, social credit perceptions, technological advancements, legal regulations, and environmental concerns. The report concludes by emphasizing the importance of regularly analyzing these macro-environmental factors to ensure HSBC's long-term operational success. The report is well-structured, providing insights into the challenges and opportunities HSBC faces in its global business environment, with references provided using the Harvard format.

MB461 GLOBAL BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................................3
MAIN BODY..................................................................................................................................................3
CONCLUSION...............................................................................................................................................4
REFERENCES................................................................................................................................................5

INTRODUCTION
Global business environment refers to those factors of external environment to the business
prevailing in different countries where an organization has expanded its operation to and such factors
cannot be controlled by the organization. These factors either directly or indirectly impact the decision
making activities of the organization (Perera, 2017). Also, it can have an impact over the resources used
and capabilities of the organization to cope up with the challenges coming their way. The present report is
based on discussion over these global environment factors through PESTLE model. PESTLE is an
acronym for Political, Economic, Social, Technological, Legal and Environmental factors of the business
environment. These factors will be discussed with reference to HSBC holdings, a UK based multinational
organization in the provision of financial services.
MAIN BODY
Here in the context of HSBC holdings, various external factors affecting the operations
and decision making of the company will be discussed and by doing so, various key drivers will
be identified for consideration by the management in their future decision making (Shtal and
et.al., 2018). PESTLE model of HSBC holdings is as follows:
Political factors: Being a multinational corporation, HSBC holding can have impact of various
country’s governmental policies, laws and regulations. Such governmental differences can affect
their profitability. So it is necessary on the part of management to have protective strategies to
function effectively and successfully to have win - win situation in different financial systems
(Barik and Kumar, 2018).
The various key drivers arises from this factor are Importance of banking sector in the economy,
interference of government in the banking operations, trade related tariffs and regulation for
financial sector and tax rates for banking corporations.
Economic factors: Growth of HSBC holdings is highly affected by the stability of economic
factors in UK and other countries where it has expanded its operations. More specifically the
growth rate of financial sector in home and other countries. The management should consider
many key drivers arising from this factor such as stability of exchange rates, skill level required
in the banking sector along with inflation, interests and unemployment rates in the home country
and other countries of operations (Hamilton and Webster, 2018).
Social factors: The various social factors to be considered by HSBC holdings are desire by
different people living in different countries regarding credit requirements. People in different
countries have different level of perception about leading their luxurious lifestyle on credit.
Technological factors: Technological factors act as a biggest factor of worry for management as
changing technology has changed the banking operations of many countries at a large extent. As
a player in financial sector they are worried about customer's confidential information as this has
create much problem with the latest technology. So the management need to consider the impact
of technology on product offering, value creation and cost structure associated with it.

Legal factors: The various law related to intellectual property, consumer protection, e
commerce, employment and data safety in different country must be considered by the
management in their decision making.
Environmental factors: Air and water pollution related regulations for banking industry and
other environmental related laws and regulations must be considered by HSBC holdings before
entering into new country or expanding their business into new market. They are necessarily
required to reduce carbon footprints by utilizing efficient technology in their operations.
CONCLUSION
From the above report it has been concluded that the management of any company like
HSBC holdings here, should appropriately analyze the macro environmental factors on a regular
basis to ensure smooth operations on a long term basis.

REFERENCES
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Shtal, T., and et.al., 2018. Methods of analysis of the external environment of business activities.
Barik, B. and Kumar, S., 2018. Macro Environment of Indian Life Insurance Business: A
PESTLE Analysis. Bimaquest, 18(3).
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.