Strategic Management Report: HSBC's Business Strategy and Analysis

This report provides a detailed analysis of HSBC's business strategy, examining its operational activities within the financial sector. The report begins by exploring the impact of the macro environment on HSBC, considering economic, demographic, and technological factors through a PESTLE analysis. It then delves into HSBC's internal environment, utilizing VRIO and SWOT analyses to evaluate its strengths, weaknesses, opportunities, and threats. The report applies Porter's Five Forces model to assess the competitive landscape of the market and proposes strategies to enhance HSBC's competitive edge. Finally, it presents a strategic management plan with tangible priorities and objectives, drawing on various theories and models. The analysis covers strategic management decisions, internal capabilities, and the formulation of plans to navigate the complexities of the banking industry. This comprehensive approach allows for a thorough evaluation of HSBC's current position and future strategic directions.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
TASK 1............................................................................................................................................3
P1 Impact of macro environment on a given organisation and its strategies..............................3
M1 Analyse macro environment to determine strategic management decisions.........................6
TASK 2............................................................................................................................................6
P2 Analysation of internal environment and capabilities of chosen organisation using
appropriate frameworks...............................................................................................................6
M2 Evaluate internal environment to assess strengths and weaknesses of an organisation's
internal capabilities, skill set and structures................................................................................7
TASK 3............................................................................................................................................9
P3 Application of Porter's Five Forces model for evaluating competitive forces of a given
market sector for an organisation................................................................................................9
M3 Appropriate strategies to improve competitive edge and market position based on various
outcomes....................................................................................................................................10
TASK 4..........................................................................................................................................10
P4 Application of various theories, models and concept with regards to organisational context
...................................................................................................................................................10
M4 Strategic management plan which has tangible and tactical strategic priorities as well as
objectives...................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
Books and journals........................................................................................................................13

INTRODUCTION
Business strategy is a vital concept considering various operational activities of the
business firm. A business organisation is a combination of various departments coordinating
together for achievement of pre decided goals and objectives of the workforce. Managers and
leaders of various business enterprises formulates various business strategies and plans in order
for effectively attain business goals and objectives, ensuring effective utilisation of valuable
resources of company. Presented report is based on operational working of HSBC Bank plc. It is
a multinational banking and financial sector, that delivers investment and finance facilities to its
customers. Respective company has a huge market presence in domestic as well as international
marketplace of about 7,500 offices around 80 countries as well as covering some territories of
Europe, Americans, Middle East, Africa and Asia-Pacific region. The business firm is
headquartered in Birmingham and was founded in 1836, which is 184 years ago and was
rebranded 6 years ago in 2015 as HSBC UK. The present report will analyse various strategies
formulated by management department of the business firm in order to deal with its external
environment and various tools, model and theories will be taken into consideration for evaluating
competitiveness of the business firm.
MAIN BODY
TASK 1
P1 Impact of macro environment on a given organisation and its strategies
Macro environment: It is a condition that exists in economy as a whole, rather than being
in a specific region or an area. Manager or leader with an objective of overall growth of the firm
keeping in mind effective utilisation of resources, considers both micro as well as macro
environment. In context to chosen organisation i.e. HSBC bank, as it is a financial institution,
operational working of workforce has to deal with high uncertainties in its external macro
environment.
In view point of James Emmett, who is also the CEO of the organisation, macro
environment is basically termed as the environment that directly impact on internal operational
working of a business firm. Various macro environment factors in relation with chosen business
organisation includes;
Economic factors

They are those factors, that affects operational working of the firm and also sometimes might
lead to change in decision making process of company as a whole. It includes;
 Interest rates
 Exchange rates
 Recession
 Taxes
 Demand/ Supply
 Inflation
Demographic factors
Almost every type of business organisations is affected with these types of factors. It
includes;
 Income groups of people living in that area
 Age composition
 Education level
Technological factors
These types of factors are an inclusion of availability of technical means, which is to be
used by production department of an organisation. By using updated and innovative
technologies, management department of concerned business firm is able to extract best efforts
being produced in an organisation. Some of technological factor includes;
 Automation
 3D technology
 Wireless charging
 Availability of Wi-Fi
Managers and leaders of selected business firm i.e. HSBC bank, considers these factors and
formulates various operational plans as well as strategies for countering the effect of such factors
in effective working of the business firm. Concerned department of the firm conducts PESTLE
analyses for analysing firm’s external environment. PESTLE analysis of HSBC bank are as
follows;
PESTLE analysis is a strategic tool, which helps management of the firm to analyse
macro environment of the firm and advances firm towards its effective working for achievement
of company’s desired goals and objectives.

Political: As with light to the fact that, HSBC has branches of its institutions across
various countries of the world. Concerned department of each branch has to work as per political
rules and obligation. This might be the reason for setting up different management department
along with different strategy making in various branches of the company.
Economical: This element is an inclusion of inflation or recession rates as well as foreign
exchange rates in given marketplace of the company. Managers and leaders of the business firm
considers various economic factors along with conduction of various operational activities of the
business firm. As different region has difference in their economic policies, hence, plans and
strategies are being formulated by looking at various factors existing in given market of the
organisation.
Social: Society acts as an important part in operational working of the business firm.
HSBC ensures fulfilment of various social objectives of company along with completion of
respective operational objectives and goals of the business firm. Company can make its better
goodwill in its given operational market by fulfilment of various social objectives of the
workforce.
Technological: It refers to taking use of advanced technologies in respective operational
activities of company. This element covers availability of technological means to a business firm
for effectively operating its business activities in given marketplace and also allows firm to
produce more efficiently i.e. produce more with comparatively lesser amount of input. This
factor highly impacts on growth of a business firm, as by using technical means, a company can
boost up their operational working and shape efforts towards expansion of business firm.
Environmental: It includes considering resources of the firm along with profit
maximisation objective of a business firm. In context to chosen firm i.e. HSBC, managers of the
firm consider effective utilisation of resources along with completion of operational task of the
workforce. In addition to that, it includes factors such as climate, weather, laws regarding
pollution control etc.
Legal: It is an inclusion of various legal rules and policies being imposed by governing
body of a respective region. Strategic decision and plans of an organisation is highly impacted by
legal factor, as a little offset of company’s policies might lead to legal formalities against
operational working of the company.

M1 Analyse macro environment to determine strategic management decisions
In order to deal with various micro environment factors managers and leaders of HSBC
bank formulates various flexible plans as well strategies in order to ensure smooth conduction of
respective operational working of the business firm. Various strategic management decision
formulated in the workforce are as follows:
 Developing good networks: By developing good networks of markets in respective
operational area of the business firm, helps management department to analyse current
trends of marketing situation ongoing in given marketplace.
 Innovation: Respective management department of the workforce, uses various
innovating techniques in regulating their operational activities. Pure aim of production
department of concerned business firm is aimed at providing unique products and
services company’s valuable customers.
 Using updated technologies: By using up to date technologies in production function of
the business firm, managers and leaders of respective organisation are able to operate
effectively in given marketplace of company.
TASK 2
P2 Analysation of internal environment and capabilities of chosen organisation using appropriate
frameworks
An internal environment of a business firm in an inclusion of different competitors of a
company and also analysis internal strengths and weaknesses of an organisation with respect to
current marketing trends in given business environment of the workforce. Spreading light to the
fact that, an operational department of various business firms has to deal with different types of
uncertainties while operating its respective business strategies in given marketplace of the
company. With relation to chosen organisation i.e. HSBC bank, it is a financial institution and is
highly impacted by its internal as well as external environment. As by growing opportunities in
financial sectors, wherein, customers are benefited with various types of schemes and offers
introduced in this sector. It makes it hard for operational department of the firm to offer its
business activities along with delivering respective products and services of the company.
Managers of the firm for ensuring company’s effective usage of resources conducts market
research on regular basis. It helps in developing effectiveness of work being produced in the

business firm and also enables firm to grasp trending needs and demands and also helps in
acknowledging behaviours and reaction of any respective strategy by company dedicated
towards its target audience. Concerned management department of the business firm uses VRIO
analysis for analysing internal environment of respective business firm.
VRIO analysis of HSBC
The VRIO analysis of HSBC is aimed at evaluating and managing valuable resources for
providing competitive advantage to the business firm. Managers and leaders of the firm by using
this analysis, build strong potential for competing in given marketplace of the workforce. It
includes;
Valuable: This includes dedicating efforts of respective individuals working in an
organisation towards saving as well as optimum utilisation of resources of the firm. It is to be
analysed by VRIO analysis of HSBC that, management department of firm considers financial
resources as the most valuable resource and dedicate pure efforts of respective individuals in an
organisation for using it to its maximum potential.
Rare: It suggests taking care of rare resources that are used in an organisation. As per
VRIO analysis of chosen firm, highlights human as well as finance resources as the rarest
resources in the organisation. Managers of the firm ensures effective usage of these resources to
ensure effective working of the operational firm.
Imitable: It refers to ability of others to copy certain business plan or strategy. As per
VRIO analysis of HSBC, it is being analysed that, financial resources of the company are costly,
thus is hard to imitate. With addition to that, respective company covers all its operational
activities under patent and copyrights, which protect unique working of the workforce and helps
in delivering innovative products and services to valuable customers in given marketplace.
Organisation: It suggests that all activities in an organisation is taken place with proper
utilisation of resources and also ensures every activity is taken place with good organized work.
It is to be analysed by VRIO analysis that distribution network of the firm is well organised.
M2 Evaluate internal environment to assess strengths and weaknesses of an organisation's
internal capabilities, skill set and structures
Concerned departments of chosen firm i.e. HSBC perform SWOT analysis to evaluate
firm’s operational environment. This tool helps in analysing both micro by strengths and

weaknesses as well as macro environment by evaluating future opportunities and threats to a
business firm in the given marketplace. SWOT analysis of HSBC bank are as follows;
SWOT analysis of HSBC
Strengths
Share market: HSBC is one of the leading
banks in capital stock market. The net annual
profits and turnover of the company attracts
investment from different stockholders in
shares of company. It enhances capital of the
workforce and allows company to innovate in
its respective operational activities.
Good Market presence: Respective bank has
its established branches in more than 69
countries in including several territories. With
addition to that, bank has 4 global businesses,
Commercial banking, Wealth management,
global private banking as well as Global
banking and markets respectively.
Weaknesses
Fall in Share prices: In recent times fall in
share prices and daily fluctuations has resulted
in causing loss of investors to HSBC bank.
Past controversy: Bringing into light past
controversy in which due to glitch in computer
systems of company, which resulted in
delaying up of 275,000 payments. The firm
still is unable to recover from that controversy
and also sometimes experience related issues
with the same.
Opportunities
Expansion: HSBC bank with its excellence in
operational working and huge capital has a
good opportunity for expanding its business in
India, China.
Online presence: Company has built its good
presence in online market. Marketers of the
firm has developed attractive applications and
promotes services offered through various
means of online marketing techniques.
Threats
Competitors: HSBC has to deal with huge
competition in its given marketplace. Some of
its competitors in UK origin are; Barclays,
Lloyds, Santander and many more.
Macro environment: Due to various factors
present in operational working of the firm,
managers and leaders of the firm has to deal
with various macro environment.

TASK 3
P3 Application of Porter's Five Forces model for evaluating competitive forces of a given market
sector for an organisation
Porter’s Five Forces
It is termed as a holistic strategic framework that help in building better decision making
of the business firm towards various strategic
Threat of new Entry: It refers to threat that relates to any new entry of a company or an
organisation that deals in similar product or service which is offered by company in same
marketplace. In regards to chosen business firm i.e. HSBC bank, concerned department of
business firm always go through various challenges of competition in operational working of the
business firm.
Bargaining power of Suppliers: It refers to ability of suppliers of company to change
prices of various raw material delivered to the company. If there are high number of suppliers of
the firm, this power tends to be low and on the other hand, if number of suppliers of a firm is
low, this power tends to high. In regards to chosen organisation, company has high number of
suppliers that supplies raw material to company. Therefore, bargaining power of suppliers tends
to be low in case of selected business firm.
Bargaining power of Buyers: It refers to ability of buyers of the firm to make changes in
prices of products and services offered by workforce in given marketplace. In context to selected
business firm, as company offers repeated services to its customers, bargaining power of buyers
of the company tends to be high.
Threat of Substitution: It refers to availability of similar product or service in given
marketplace of the company. As in respect to chosen workforce, the institution offers quite basic
financial services to its customers. Therefore, there is a high risk of substitution of company’s
product or service in given marketplace of the workforce.
Rivalry amongst competitors: In a business environment, there is always impact of
competition. It is being said that, sometimes competition in a business environment helps in
boosting up of company’s efforts and increases satisfaction provided to its customers. There are
various competitors of chosen firm, that impact decision making of the firm, with addition to that
various operational decision making and strategies are being formulated along with considering
necessary factors of competition in the market.

Therefore, by applying porters five force models, authorities of business firm are able to
analyse external environment and competitiveness of the firm. By analysing and focusing on
respective analysed factors, management department of respective firm is able to innovate or
change respective policies of the business firm as per trending needs and demands of valuable
customers in given marketplace.
M3 Appropriate strategies to improve competitive edge and market position based on various
outcomes
For dealing with various external factors of the firm management department of HSBC
introduces various strategies and plans, which shapes efforts being produced in the business firm
towards attainment of desired goals and objectives of the firm.
Innovative products: By innovating various products and service of company,
management of workforce is able to overcome threat of new entry in given marketplace of the
company.
Effective supply chain: By improving supply chain, managers and leaders of the firm
finds slights of the way to maintain bargaining power of respective suppliers in favour of
company.
Large base of customers: Management department of selected firm, uses strategy of
increasing customer market of the firm to overcome issue of increased bargaining power of
buyers of respective company’s products as well as services.
Service oriented: Rather than being only product oriented, management of the firm
delivers quality of service along with delivering respective products of the company. It helps
management of the firm to overcome threat of substitution of company product in given
marketplace of the workforce.
Increasing market size: By increasing market size of company, firm built better potential
towards competition among with respective competitors of business firm in given marketplace of
the firm.
TASK 4
P4 Application of various theories, models and concept with regards to organisational context
An organisation is defined by functioning up of various departments towards attainment of
one desired and pre decided objective. Organisation consists of various individuals working in

the firm carrying various individual objectives and dedicate their respective task towards
completion of respective organisation goals and objectives of the business enterprise. Managers
of the firm i.e. HSBC, uses various motivational theories to keep working environment of the
business firm boosted and motivated and also ensures completion of desired objectives of the
firm in given time period with optimal usage of valuable resources of the business firm.
Maslow’s Hierarchy of Needs
This theory as presented by Maslow which aims at providing basic needs and wants to
various individuals working in an organisational structure. It includes;
Self-Actualisation needs: This need refers to a desire of becoming on top of one’s
abilities. In regards to chosen organisation i.e. HSBC bank, managers of the firm take care of
such needs for ensuring effective working of the company.
Esteem needs: It refers to providing sense of recognition, strength, freedom and respect
to an individual working in an organisation. In respect to selected company, concerned
department of firm is able to enhance productivity of the firm with considering healthy working
of the workforce.
Love and belongingness: It refers to providing love and providing personal attention to
respective employees working in an organisation. In regards to taken firm, managers of the firm
take care of such needs. It helps in building potential of organisation as a whole to deliver
increased productivity.
Safety needs: It refers to providing needs such as providing job security and safe working
environment, wherein, every staff is free to keep its respective point of view in respective
decision making of the firm.
M4 Strategic management plan which has tangible and tactical strategic priorities as well as
objectives
From the above discussion, it can be stated that Maslow theory is beneficial in HSBC in
making employees motivated regarding different operation that help to increase the entire
performance. it is observed that effective team is always a key point for banking companies in
order to reach the strategic goals within a time frame. On the other side, process theory is helpful
in making a better efforts of staff in order to execute to higher level which help to reach the
desired outcome in real time. This is considering to be the most motivation theory which banks
like HSBC implement to intrigue a key factors that help in increasing the productivity.

CONCLUSION
From the above presented meta-analysis, it can be concluded that, managers and leaders of
chosen business firm adopts to various operational strategies and plans in order to deal with
macro as well as micro environment of business firm. It is to be highlighted in the report that
various factors affect effective working of firm directly or indirectly. Management department of
the selected firm uses various tools, models as well as theories in order to ensure effective
working of business firm. With addition to that, by using various theories and models in the
workforce, managers are able to build good competitive advantage to a firm and helps in
securing a decent position in given marketplace of the company.

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