Analysing Business Strategy: Macro & Micro Environment Impact on HSBC

This report analyses HSBC's business strategy by examining the influence of macro and micro environments using frameworks like PESTEL, SWOT, VRIO, McKinsey 7s model, and Porter's Five Forces. The PESTEL analysis identifies political, economic, social, technological, environmental, and legal factors impacting HSBC. SWOT analysis assesses strengths, weaknesses, opportunities, and threats. VRIO analysis evaluates HSBC's resources based on value, rareness, imitability, and organization. The McKinsey 7s model examines strategy, structure, systems, shared values, style, staff, and skills. Porter's Five Forces model evaluates competitive forces, including the threat of new entrants, bargaining power of suppliers and buyers, and the threat of substitute products. The analysis provides insights into HSBC's strategic planning and competitive positioning. Desklib offers a variety of solved assignments and past papers for students.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
Applying appropriate frameworks analyse the impact and influence of macro environment on
a given organization and its strategies....................................................................................3
Analyse the internal environment on a given organization using appropriate frameworks...5
Applying porters five forces model evaluate the competitive forces of a given market sector
for an organization..................................................................................................................7
Applying a range of theories, concepts and models, interpret and device strategic planning for a
given organization............................................................................................................................8
CONCLUSION..............................................................................................................................14
REFERENCE.................................................................................................................................15

INTRODUCTION
The business strategy is basically defined as a combination of various activities which is
used by organization for running their functions smoothly. Those activities include clear set of
plans, actions and goals, which outlines the business that in which manner business will
complete in a particular market. Due to the effective use of various business strategies
organization easily identified the desires and needs of customers within low time. Here the
selected organization is HSBC and the head office of this firm is located in London, UK. The
company was established in 1865 and this firm is dealing with various financial services
(Bhattacharya and Pal, 2021). The report will have covered applying appropriate frameworks
analyse the impact and influence of macro environment on a given organisation and its
strategies. It further covers analyse the internal environment and capabilities of a given
organization using appropriate framework. This report also covers applying the porter's five
force model evaluate the competitive forces of a given market sector for an organization.
TASK
Applying appropriate frameworks analyse the impact and influence of macro environment on a
given organization and its strategies
PESTEL Analysis -
The PESTEL analysis is refer to a framework and analytical tool which is used by
organization for identifying the effect of a external environment factors which is uncontrollable.
Due to the effect of these factors HSBC is not able to run their financial services in effective
manner.
 Political – Political factor involved political instability or stability, trade regulations,
trade policies, trade restrictions and so on. Due to the influence of these factors
organization is not able to run their activities in proper manner. In context to HSBC,
management need to consider about dynamic business functions which is important for
sustain their political stability in various locations for long time.
 Economical – This factor is considering with the economic growth and development,
interest rate, employment rate, recession and so on. In context to HSBC, it is a popular
brand in United Kingdom in aspect of providing best quality service and product to users.

Due to providing best quality goods and service to them the overall growth and
development of firm are easily increased within low time.
 Social – This factor is considering with the buying behaviour, purchasing power, and
taste and preferences of customers. In context to HSBC, here management is focusing on
consumers and their wants. Due to this company is able to deliver best quality service to
users according to their needs for long time. In this way company is able to develop
strong social connection with clients in long term.
 Technological – This type of factor sustains modifications and changes in the field of
technology (De Giacomo and Bleischwitz, 2020). In context to HSBC, it is one of the
organization who always used advanced systems or equipment's for running their
financial services smoothly. Due to heavy use of technology company is able to deliver
their services quickly to users without any delay for long time.
 Environmental – This factor is related with culture and subculture, climate change,
population rate and so on. In context to HSBC, here organization need to analyse the
current working culture and tradition of UK effectively. Due to the effective analysis
organization easily sustained their performance level within organization for long time.
 Legal – Legal factors are related with the specific laws policies and procedures which is
important for organization to follow effectively. In context HSBC, here management
need to keep transparency and fairness in their business functions. In this way firm easily
developed strong coordination and relations with their employees and clients effectively.
SWOT Analysis -
It is defined as a method of strategic planning and strategic management which is used by
organization for identifying their strength, weakness, opportunity and threat in business
activities. Due to the effective use of this method the owner of organization is always able to take
right decision in business for long time.
Strength -
 In context to HSBC they have strong brand image between the UK public and market
because they always facilitate high quality services and good to customers.
 Organization also maintained strong employee engagement in their activities which leads
to sustain the overall performance and growth of company in long term.
Weakness -

 The management of HSBC have poor security system for their and customer data or
information. Due to this the trust of the company are easily decreased in customer mind
effectively.
 In this firm the flexibility in job roles and responsibility for the employees are very less
which leads to enhance conflict between employee and employer for long time
Opportunity -
 Due to having strong workforce and popularity HSBC is able to expand their activities
and services at large scale in various locations. It leads to enhance the reach of their
services to all type of users.
 Due to the use of advanced technology company is able to deliver their services and
goods to customers quickly.
Threat
 Presently in market competition are very high and due to this organization is not able to
deliver best quality product to customers in long term (Eikelenboom and de Jong, 2021).
Analyse the internal environment on a given organization using appropriate frameworks
VRIO Analysis
This type of analysis is related with analytical methods which leads the framework of
resource orientation. Due to the effective use of this method or technique the selected company is
able deliver appropriate information to users regarding their goods and services. In this way new
and previous customers are easily attracted in large number for buying their services. The VRIO
analysis are divided in to various stages which is described below -
 Valuable – This stage consists the value for various competences and elements which is
important for maintaining profit margin at sustainable level for long time. Here the
valuable elements for HSBC are employees and worldwide presence. Due to the effective
presence of skilled employees and global presence, firm easily delivered best quality to
users in long term.
 Rare – In this stage the management of HSBC used unique and advanced resources
which is totally different from other competitors. Due to the use of advanced and unique
resources organization is organization easily achieved competitive advantage in market
quickly and for short time. Resources are also essential for develop strong
communication with customers for long time.

 Inimitable – The worldwide presence and resources are coming under the category of
inimitable. According to this this stage it is not necessary that resources and worldwide
presence can sustain the competitive advantage for long time. Because it is a very critical
or challenging task for company for utilizing the resources in optimized manner.
 Organized – It is highly an important point for firm to run their activities in smooth
manner. In this category the involvement of technology and employees are very high
because these two elements play the major role for run the whole activities of firm in
smooth manner. Due to the effective use of skilled employees and technology
organization easily delivered high and standard quality to customers in long time.
McKinsey 7s model -
It is basically defined as a tool which is used by organization for assessing the future
success and wellbeing of organization. This model is basically divided into seven stages which
are described below -
 Strategy – It is considered as a first framework which is beneficial to HSBC for
preparing a effective and specific strategy in aspect of popularising their product and
services. Due to the use of effective strategy organization easily increased the revenue
and profit margin within low time.
 Structure – It is also one of the framework which is beneficial to organization for
fulfilling their job roles and responsibilities in effective and systematic manner (Kanda,
Geissdoerfer, and Hjelm, 2021). With help strong and effective infrastructure HSBC
easily main proper communication and coordination with their employees for long time.
 System – It is the third framework in this model and this framework focuses on the
resources and equipment’s which is used by the organization. Due to the effective use of
resources and equipment's company easily conducting their task in systematic way. The
other benefit for using system is that only reliable information’s are shared between
employees and customers for long time.
 Shared value – According to this framework company have the option for sharing
specific value which is beneficial for spreading ethical consideration within company. In
context HSBC due to maintaining positive value of employees, the overall popularity
and productivity of brand are easily sustained in market for long time. With help of

utilizing this framework, the positive relationship is easily sustained between company
and customer for long time.
 Style – According to this theory the management the management of HSBC need to
utilize effective leadership and management style for running their activities smoothly.
With help of using of suitable leadership style top level management easily sustained
good relationship with all types of workers for long duration.
 Staff – This type of framework is mainly focusing on the staff of the HSBC and also
formulating specific strategies. Due to formulating effective policies and strategies the
all over growth and performance of staff members are highly increased within low time.
 Skills – It is a last framework which determined the skills of workers. In context to
HSBC, management need to provide effective or advanced training to their employees.
Due to these employees easily developed new skills according to current market
situation (Kaplan and Kinderman, 2019)
Applying porters five forces model evaluate the competitive forces of a given market sector for
an organization
Here the management of HSBC utilized Porters five force model and also analysed
competition in market for achieving high revenue and market share.
It is basically a strategic tool or method which was developed by Michael. E. Porter in
1979. It is also known as model of corporate analysis which is used by organization for
regulating the rivalry within firm and the level of weakness, effectiveness and strength of
organization.
 Threat of new entrants – In context to HSBC, it is very low because the services of this
firm are highly reliable for customers in customers in comparison with other competitors.
The main aim of this firm is to provide high quality service to users as per their desires
and wants. Due to sustaining these aim customers are not easily switch to other brand for
long time. For sustaining the quality management of HSBC need to utilize advanced
equipment’s in their workplace area between workers.
 Bargaining power of suppliers – In context to HSBC it is very law because this firm
already have well established supply chain management. Due to having effective supply
chain management customers are easily attracted in large number towards their services
and goods. The other reason is that the prices of their product are highly sensitive for

suppliers. Due to considering these reasons the positive relationship is easily sustained
between organization and suppliers for long time.
 Bargaining power of buyers – It is defined as negotiating the price by customer for
gaining the desired products and services at beneficial price. In context to HSBC it is
very low because the service and product of this firm are highly effective in various
locations. Due to providing effective service the loyalty of the brand is strongly
developed in customer mind for long time.
 Threat of substitute services and products – In aspect of HSBC it is very high because
here management is providing their services and goods to users (Mulyono, 2018). Due to
providing services and facilitates at high cost possibilities are enhanced for decreasing the
performance and productivity of company. The main reason for increasing threat for
company’s productivity is that the other competitors providing financial services and
facilitates to users in cheap price which attracted them in large number.
 Rivalry among existing competitors – In context to HSBC it is very less because this
company target only those users who are able to afford prices in their services and goods.
With help of targeting these type of customer’s company is able sustain their position in
market as a leader for long time. When brand loyalty and trust are easily sustained in
market and between customer’s rivalry among existing competitors are highly decreased
for long time.
Applying a range of theories, concepts and models, interpret and device strategic planning for a
given organization
Porter’s generic strategy –
The porter’s generic strategic strategy is basically a technique or tool which was
developed by Michael Porter in 1980. Due to the effective use of this strategy or method
company easily gained competitive advantage in market for long time. This tool facilitates
competitive advantage to firm with help of reducing the cost or differentiating services and
goods at premium price. This strategy basically divided into three steps which are described
below –
 Cost leadership strategy – It refer to gaining competitive advantage by decreasing the
cost in target market. The factors which are comes in this strategy are technology,
economies of scale access of various raw materials Due to the effective use of this

strategy firm is able to enhance brand awareness and sale in their goods and services
within low time. With help of low price in their goods and services consumers are easily
increased in large number for availing their services of HSBC within low time.
 Differentiation strategy – It is also a one type of strategy which is used by HSBC for
differentiating their services and facilitates from competitors. For differentiating their
services, it is important for authority that they must provide beneficial and unique
schemes to their clients. Due to providing unique and effective services and goods to
users their desires and wants are easily increased at maximum level within low time.
 Focus strategy – It is a third strategy of this model and according to this strategy here
organization need to focus on their resources for the expansion of target market (Riwanto,
and Andry, 2019). This type of strategy is beneficial for serving a particular target
segment for receiving a competitive advantage in niche market. The management of
HSBC adopt these type of strategy for providing for providing best value and reduction in
cost
Bowman’s strategy clock –
The Bowman’s strategy clock was developed by Cliff Bowman and David Faulkner
paper in 1997. The Bowman strategy clock is basically defined as a model which assists the
organization in aspect of exploring appropriate strategic position in a market which is depend in
the order of price and perceive value and easy to use. The Bowman strategy clock basically
consist of various steps which is described below –
 Low price and low value added- This strategy is considered with providing quality service
and goods to users with low and valuable price. In this company easily maintained positive
relations with customers for long time.
 Low price- It is also a one of the strategy where low margins and successful key involved
decrease in price and procedure efficiency having the objective for increasing sales at
maximum level. In context to HSBC, in comparison with others it is a highly effective
strategy for increasing the popularity and revenue of the company at higher rate.
 Hybrid- It is defined as mixture of price reduction and product differentiation where cost is
competitive having low perceived value from users promoting value added aspect of product.
The balance between differentiation and cost assist in maintaining good margins which
defines the success of hybrid strategy. This type of strategy is effective for HSBC.

 Differentiation- It refers to company differentiates its services from other brands by
accumulating high perceived value. It facilitates a unique specifications to a service with the
use of innovation which manage a customer base in large number and high rate growth.
 Focused differentiation- This strategy facilitates high value at high price of the service
which enhance the company portfolio but difficult to maintain. This type of strategy is highly
beneficial for organization to operate their business activities at global level. It is a highly
effective strategy for providing high quality services to users in market for long time.
 Risky high margins- In context to HSBC higher prices for their services that are professed
in value by consumers (Schwarz, 2020). This type of strategy are risky in long run for
position in the market. Because here customer looks quality product and services iaccording
to price range. In context to HSBC management need to reduce the price in their services for
gaining objective of value of money.
 Monopoly pricing- It is defined as single organization has a power of control on pricing and
product. In market monopoly, only single company offer products. In this strategy, a
monopoly commercial is not consider regarding price or ground breaking specifications. If
consumers needs that product or service, they have to buy it even if cost are too high.
Strategic management plan
Situational analysis  In situational analysis the management of TESCO used PESTEL
and SWOT analysis for enhancing the popularity of their product
and services. The PESTEL analysis is basically a method which
used by organization for analysing the macro external factors which
includes political, economic, social, technological, environmental
and legal. In aspect of political authority required to consider about
dynamic business functions which is important for sustain their
political stability. In aspect of economic authority need to provide
best quality goods and service to them the overall growth and
development of firm are easily increased within low time. In aspect
to social authority need to focus on users wants and desires. In
aspect of technology with help of heavy use of technology
company is able to deliver their services quickly to users without
any delay for long time. In aspect environmental firm required

evaluate the current working culture and tradition of UK effectively
which leads to enhance the sale of product.
 The SWOT analysis is basically a technique of strategic planning
and strategic management which is used by organization for
identifying their strength, weakness, opportunity and threat in
business activities. The major strength of this organization is that
strong employee engagement in various function which is
responsible for maintaining the overall performance of company
effectively (Shah and Soomro, 2021). The weakness of this firm is
to hear the talent of employees are very less which leads to
decrease their performance. The opportunity of this employee is
that due to having the wide range of products management is able
to expand their activities and services at large scale in various
locations. Presently in market competition are very high and due to
this organization is not able to deliver best quality product to
customers in long term.
Objectives First objective is to gain profitability in next 1 year. Second is to
enhance sales by 20% in next 6 -8 months.
Strategy From the above analysis use of advertising and market development
are some very effective strategies for popularising their services and
goods in market with in low time. With help of these strategies
organization easily classify and target those customers who are
valuable for their business.
Tactics  Product: In context to HSBC, management must present their new
schemes and facilities in the form of service to users effectively.
 Price: In context to HSBC they need to fix competitive price in
their services and goods for sustaining their profit margin in their
market for long time .
 Place: The services of this firm will be facilitate in the different
locations. It leads to increase convenience of customers for availing

the services within low time.
 Promotion: It will promote its new service by way of advertisement
in newspaper and email marketing and using the numerous
promotional techniques.
Action In this stage organization finally implement their plan in the form of
action for enhancing their overall growth and also for increasing the
goods in market. In this plan the skills and ability of lower-level
employees are plays the crucial for selling product of firm in large
scale within low time (Standing and Mattsson, 2018).
Monitoring and
controlling
In respect of HSBC they takes the support of bench marking so that the
actual performance can be compared with the plan and required actions
can be taken.
Budget -
Particulars Years
Cash flow from operating activities 30000
Sales 5000
Payment of salary 1000
Rent paid 2500
Staff wages 2250
Legal expenses 7000
Transport 2500
Insurance 1000
Setup cost 14600
Net cash flow 65850