Strategic Planning and Implementation & Strategic Marketing Management HSBC a case study

Submitted by:
Sukhpreet Kaur Student ID E16146

Summery
Strategic management provides direction to an organisation at all stages of business. Strategy is, very simply, an outline of how a business intends to achieve its goals. It analy es how plans are formed, implemented and evaluated. It evaluates the internal and e!ternal environment, plan according to that and then implement the plan. "his report covers the principles and theories used in Strategic planning, establishing vision and mission of organisation and then implementing strategy.

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I have selected HSBC Company as a case study. HS ! Holding" plc is a #nited $ingdom%based public limited company that came in &ngland in 1''(. HSBC is mainly into finance business. "he entities which form the HSBC )roup provide a comprehensive range of financial services to personal, commercial, corporate, institutional and investment, and private ban*ing clients. It is big company having office in more than +, countries. It was established in 1+,- in Hong $ong as Hon $ong and Shanghai ban*ing Corporation to finance the growing trade between &urope, India and China. It widened its scope early in the .(th century with loans to governments, especially in China, to finance railway building and infrastructure pro/ects. 0ater on in 1''1 it moved its head2uarters to 0ondon. 3cademic reasons to choose this company: 1. It is easy to understand its strategy. .. It has well plan strategy to grow. 1. Company is 45C which started in Hong $ong. 6. Company reached too many countries with well planned strategy.

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Porter" $i%e $orce theory& "his theory analy es the forces which act on an organisation in its macro environment. "hese forces affect the company7s ability to ma*e profit very closely. 1. Strength o$ #arrier" to entry& It analy es the easiness or difficulty of entering new organi ation into the same industry. It analy es the resources that are re2uired to enter the mar*et and how easily they are available. .. E'tent o$ ri%alry #et(een $irm"& this analy es the competition among the firms in the industry. If competition would be more there are less chances of success. 1. Supplier" po(er"& if suppliers are powerful and supplying to many firms organi ation will have less control on supplied products. 6. uyer" po(er& it analy e that how powerful are the buyers in that industry. are available to customers and how costly or cheap are they. It also test that products are of good 2uality. S*+) analy"i" "his is an analysis of strengths, wea*ness and threat, opportunities of organisation. "he strengths and wea*ness are concerned with internal environment of organisation. "hreats and opportunities are concerned with e!ternal environment of organisation. 3 S89" analysis must first start with defining a desired end state or ob/ective. 3 S89" analysis may be incorporated into the strategic planning model. Strategic :lanning, including S89" and SC35 analysis, has been the sub/ect of much research. Strengths: attributes of the person or company that is helpful to achieving the ob/ective. 8ea*nesses: attributes of the person or company that is harmful to achieving the ob/ective. 9pportunities: e!ternal conditions that is helpful to achieving the ob/ective;s<. "hreats: e!ternal conditions which could do damage to the ob/ective;s<. -. )hreat o$ "u#"titute product"& it investigates that if alternate product or services

Identification of S89" is essential because subse2uent steps in the process of planning for achievement of the selected ob/ective may be derived from the S89". =irst, the decision ma*ers have to determine whether the ob/ective is attainable, given the S89". If the ob/ective is 59" attainable a different ob/ective must be selected and the process repeated.

1! 3 framewor* is useful to structure over thoughts and navigates around the different aspects of strategic management. "he purpose of strategy is to enable an organisation to achieve a sustainable competitive advantage than any framewor* needs to address the process necessary. "o develop its strategy, HSBC should consider the following points: 1d Since it7s a huge organi ation it should use different strategies for different countries. 8hile forming its strategy it should *eep global trends in mind. 1. 3s it has business in two type of areas, one where it has established it self and second where it is trying to increase its mar*et. In #$ and China it has deep roots. In other 3sian countries it is trying to increase its turnover. .. #$ is developed country and customers are large in this. It should ma*e such systems that it could meet all financial needs of its e!isting customers. Identify the short and long term goals Identify the time that it will ta*e to reach the goals Identify the present status Identify the mar*ets where it want to go Identify ways of reducing cost Identify the resources that will be used to reach those goals Identify the challenges >ecide the product that it want to sell

1. It is already established in #$. It should ma*e planning such that it could maintain its mar*et share. 6. It should provide a range of financial products so that customers don7t move to other companies to meet their different *ind of needs in financial terms. -. In other courtiers where it is new it should study the environment well, before lunching itself or a new product. ,. 8hen it move to new country it should not do things on large scale li*e, in beginning it should open office in one city the gradually in other cities. By wor*ing in this way it will able to forecast its success, and won7t suffer any huge loss.

1e, 1- .n"o$$/" matri'& according to this matri! there are 6 options for an organi ation which are as follows: 1. 4ar*et penetration: in this a company offers its e!isting products to e!isting mar*ets. .. 4ar*et development: in this a company ta*es its e!isting products to new mar*ets. 1. :roduct development: in this a company offers new products to its e!isting mar*ets. 1. >iversification: when company all together moves into new mar*ets with new products. 0o"ton con"ulting group 1 !2, matri' it is used to decide in which products

organi ation should ma*e more investments and in which it should not. It is also used to decide whether a product should be continued or not. It also helps in analy ing the gains from new products. "his analysis consists of four sells. 1. >ogs: this sell contains those products which have low mar*et share and low growth in that mar*et. It is recommended that company should not continue these products.

.. Cash cows: in this category those products are included which have high mar*et share and low growth rate. "he products ma*e more revenues then invested in them. 1. ?uestion mar*: these products have good pace of growth but captures a small mar*et share as these are growing they need more investments. 3 thorough analysis should be done to determine the potential game from these products. 6. Stars: these products capture a large share of mar*et as well as have high growth weight. "hey bring a high amount of profits to the company.

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It has four *ey businesses: Per"onal 3inance Ser%ice": "hey have a range of personal financial products. In this they provide personal loans, credit cards, saving and investment, retirement planning and insurance. Pri%ate anking: HSBC :rivate Ban* offers private ban*ing and wealth management

services to wealthy individuals and their families. !ommercial anking: HSBC provides financial services to small, medium%si ed and

middle%mar*et enterprises. 2lo#al anking and Market": it provides financial services to very large companies

li*e multinational companies. HSBC has variety of mar*eting options available. 1. It can sell e!isting products to its #$ and China customer where it has already established itself. .. It can sell new products to #$ and China customers.

1. It can sell its e!isting products to new mar*ets li*e 3sian countries where economies are developing at a great pace. 6. It can sell modify its product according to needs of customers where it has recently moved. -. It can develop new products for new mar*ets. Strategic +ption" Di$$erentiation& Implies that organi ation pursues a strategy where it offers a product o a service which is uni2uely different from those of its competitors. !o"t 4eader"hip& Strategy where the organi ation enables itself to provide the products and services at a cost less than any other competing organi ation. 3ocu"& Strategy where organi ation target is products or services at a given sector of mar*et with great accuracy and with a depth of capability and *nowledge to support its position in the mar*et. !ompetiti%e .d%antage& 3n organi ation7s position where it has got a product or service which is no only better than competitors but have the ability to maintain this situation over a long period of time. "he analysis of business strategic situation is the first step in developing the competitive advantage. 0#, Sta*e holders are those individuals or groups who affect or are affected by the achievement of an organi ation7s ob/ective. Sta*eholder theorists would argue that many different sta*e holders are affected by an organisation decision. HSBC has +,-(( offices in +, countries. Its ma/or sta*eholders are

It has ..(,((( shareholders. It has 11(,((( &mployees It has customers 1.+ million Competitors: Barclays :lc, Citigroup, Aoyal Ban* of Scotland.

Shareholder"& shareholders are people who invest their money in the company. HSBC is very big multi national company. It has large number of shareholders. It has to ma*e strategy to ma!imi e the wealth of shareholders. Employee"& &mployees want planning which would ta*e care of their interest in terms of good salaries or wages. 3lso organisation should form strategy such that ma/or senior positions are filled form within the company. !u"tomer"& customers want HSBC to introduce strategy from which they get good products in low costs. Competitors: competitors li*e barleys plc, Aoyal Ban* of Scotland wants to get ahead of HSBC.

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Aole of management is balance these sta*eholders needs rather than simply focus on shareholder. "o involve all sta*eholders in the development of strategy they should be informed about it well. 9rganisation should form an efficient system where decisions are communicated to sta*eholders. "o involve employees, they should be made clear of all the policies. "he events li*e meeting and seminars should be arranged. "he sta*e holders should be able to understand the strategy. It should be conveyed to them in easy language. Sta*eholders should be as*ed for the suggestions that could improve the strategy. "his will ma*e them happy. "hey would fell themselves as a part of organisation and help it to prepare its strategy. Sta*eholders can be engaged by consulting their input on the present status of the firm and their vision. If an organisation ma*e very good plans but don7t consult its sta*eholders and employees, it won7t be able to e!ecute it as it had planned.

"he focus is on shareholders there is a presumption that shareholder value is a dominant ob/ective of the organisation. 3n alternative approach is view of organisation that serves the interest of sta*eholders.

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"o gain commitment form sta*eholders an organisation should formulate its strategy such that its e!ecutions bring benefits to them. If they would find their own benefits they will sincerity towards the implementation of strategies. &mployees can be involved by showing that if strategy is profitable they will also be benefited. "hey could be tempted by promising incentives to them. "his applies to employees at all the levels right form the managers to wor*ers in organisation, should be told about the strategy and then as* their opinion on the strategy. In this they way organisation gain commitment for implementation of strategy form its sta*eholders.

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6i"ion Bision is what an organisation wants to be in future. It tells the aim of company that it wants to achieve in future. "hese are short and concise statements. "hese tell about the intentions of company. 3ccording to 8arren Bennis a vision is C"o choose a direction, an e!ecutive must have developed a mental image of the possible and desirable future state of the organi ation. "his image, which we call a vision, may be as vague as a dream or as precise as a goal or a mission statement.C 3 vision is often associated with founder of an organisation and represents a desired state which the organisation aspires to achieve. In contract with goals and ob/ective vision doesn7t change overtime. 3 vision must tap in personal goals and values of the organisations Mi""ion '

&very organisation has a purpose for which it in the mar*et or business. It has some ob/ectives to meet. "he *ey measures of the company are defined by the mission. "he primarily stoc*holders and leaders of organisations are concerned with the mission. "his approach helps to compete in the mar*et. 6alue" Balues enable to build a common way of wor*ing. "he people who are comfortable with there values and feel they can genuinely demonstrate them are needed in organisation. "he core values are organi ational essentials. "hey don7t shift as competitive conditions change but remain largely inviolate. It what members of organisations e!pected to endorse and internali e as part of wor*ing for such organisation.

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3ccording to HSBC it vision is: 6i"ion 3s a member of HSBC family which has been serving its millions of customers worldwide since 1+,-, to ta*e our place among "ur*ey7s most powerful, most profitable, most admired leader ban*s. Mi""ion regard to ethical valuesD to meet its customer7s financial needs in the fastest and most appropriate way, to continue innovative wor*s in order to achieve: human resource with superior 2ualities, technological infrastructure and service pac*ages. 6alue" 1< "o e!ceed customer e!pectations in service 2uality. 1(

.< "o be a pioneer in the implementation of technologies those create distinction for its customers, employees and shareholders. 1< "o *eep its reliability at the utmost level with the contribution of its strong capital structure and li2uid assets. 6< "o ma*e a positive contribution to the community -< to respect meritocracy during hiring processes, improving *nowledge and s*ills of its employees, creating the mostly preferred wor* environment.

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"here is a strong relationship between the culture and vision, mission and strategy of the organisation. "he strategy is effected the culture of organisation very much. "he culture which an organisation had been following influence strategy as the goals in the strategy will be met only if they can be incorporated in the culture. Bision reflects the culture of the people who develop the strategy. Cultures don7t change 2uic*lyD they are changed in the long period of time.

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HSBC want to meet all the financial needs of customers in appropriate way 2uic*ly to meet its mission to ma*e it possible it need to have e!pert human resources who can advice the most appropriate option to customers. =urther they need to manage their activities such that process is less time consuming. It should provide customi ed solution according to their needs to its customers to satisfy them. "hey should have products which could be molded according to the individual re2uirements. "o meet its mission it should have e!cellent customer care. =inancial strength is also a re2uirement as to achieve goals it need to provide financed to many small and big organisation.

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Current recession had bad effects on the profitability of HSBC. 3s more people lost their /obs the problem of HSBC got worse, people did not go for the loans. It cut the staff by ten percent by giving voluntarily retirement choice. It e!pected growth slowed down and reached to 1.+@ percent in .(('. It share prices fell to ten percent. Aecession effect was more on western countries where most countries have developed economies. So, HSBC decided to concentrate more on 3sian mar*ets. Strategy behind this step is entering into emerging mar*ets. "heses countries recovered form recession faster then western mar*ets. It ascertained that there is more ris* of inflation in #S mar*et. So HSBC is investing more in the emerging of 3sian countries. 9n the part of business strategy where they lend loan it reduced the amount they used to lend against the asset value. 4# 3s HSBC changed it strategy, it has invested more is 3sian mar*et, it got more profits form them. It has benefited form its focus on faster growing economies in 3sia and 0atin 3merica. It made two third of its profits from these counties. It shares vale increased to 1.@ percent in 0ondon trading. "he deposit in the accounts of customers rose by twenty three percent to 1.1 billion in #S3 in .(('. "hey predicted that the 3sian mar*ets will be growing at a fast pace and it plans to hire 1((( people in China where it profited more than E1 billion. 4c HSBC has following main functional areas .dmini"tration& It performs the important routine tas*. It collects, distributes and dispatches the mail. It stores and retrieves electronic and paper records. It responds 2uic*ly to the en2uiries. 3rrangements of important events are also a part of this functional area. It also facilitates communication among all the divisions of HSBC. Marketing and market re"earch: "his is an important division of HSBC. It plans for the promotion of products. It research about the trends of mar*et. It studies that which product will be suitable for which mar*et. It also forms the strategies for sale.

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3inance& it is vital division of HSBC. It handles the finance of company. It records the cash flow and monitors the income revenue. It also monitors the e!penditure and prepares account statement. Human 7e"ource& "his area performs the functions of recruiting the staff of company. It is also responsible for developing and retaining staff. !u"tomer Ser%ice: "he customer service unit provides the service to customers in terms handling their complaints and en2uiries.

4dIn finance division it has gained the financial strength as it is in business from around .(( years. "his a very crucial competitive advantage of HSBC which helps to maintain it position in the mar*et. In customer care department it has employed people who are e!pert in financial products. In human resource department, it gives special training to its employees. It has designed learning and development programs in which it provides *nowledge about its comprehensive of financial products. "his leads to development of its people to provide a good 2uality service. It emphasi e on performance of its employees and reward them according to their performance which.

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"ime table is action plan according to strategy devised pre decided time frame. =irst of all the *ey milestones should be identified. "hen time ta*en to reach those milestones or targets should be ascertained. Aesources that would be re2uired to achieve those

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milestones should be identified. It should be analy ed the goals are achievable or not and if they are achievable than the time should be divided for different activities that would be re2uired to reach those goals. "ime table should be very close to actual happening, it should not be mere a plan on paper. )oals that hard to achieve and demand more resources and time, should listed. In the same way the goals which are easy should be listed. "hen short term and long term goals should be arranged such that time is utili ed efficiently. 8#.

Business

4ilestone

Aecourses

"ime frame

:ersonal Services

=inance

1,F )rowth

Capital

.(1(

:rivate ban*ing

@F )rowth

Investing in good advisors

.(1(

Commercial Ban*ing )lobal

1.F )rowth

&!pert

to

provide

the .(1.

customised solution ban*ing -F )rowth Capital .(1-

and mar*ets

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3 strategy can be evaluated by analy ing the e!pected gains that organisation can ma*e by following that strategy. Information and data from many sources can be used to evaluate the strategy. 3ccording to the results of analysis should be incorporated in the

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strategy plans, the changes should be done in the strategy which is re2uired. Balance score card is a tool that used to improve the corporate performance. "he balance scorecard is by far the most poplar. "he concept of scorecard is simple.

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4onitoring a new strategy is very important. If an organisation uses a new strategy for e!ample, if it goes to very remote part of country where there is very less population, but at the same time there is no other competitor in that part. It would be very important for organisation to *eep a strict eye on its strategy. "here is great amount of ris* involved in this. :ossibility is that organisation might not succeed to low population. But the possibility is also that it will succeed due to no competitor at all. 0et us assume that organisation is ban*. :eople will go for the products of that ban* because they don7t have any other choice. 4onitoring strategy is necessity at every step because it will be facing hurdles that it actually would not have predicted. "he problems will occur when they start doing business. !onclu"ion "he study reveals that HSBC has been following very competitive strategy which has helped to remain it on among the companies which are at top position in the world for long time.

1,th 3pril =awn, G., Co!, B. ;1'+@<, Corporate Planning in Practice, .nd edition, $ogan page 0td., 0ondon

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http:HHfinance.yahoo.comH2HcoIsJHBC, Kaccessed on 1-H(6H.(1(L http:HHtutor.u.netHbusinessHpresentationsHstrategyHsta*eholdersHdefault.html, Kaccessed on ('H(6H.(1(L http:HHwww.mar*etingnous.com.auHlibraryHstrategicoptions.htm , Kaccessed on 11H(6H.(1(L Strategy Implementation http:HHwww.referenceforbusiness.comHmanagementHSc%StrHStrategy% Implementation.html, Kaccessed on 16H(6H.(1(L 8hat is a Bision StatementI http&99(((-(i"egeek-com9(hat:i":a:%i"ion:"tatement-htm ; 1@H(6H.(1(L http&99compoundthinking-com9#log9inde'-php90<<691<9089"o:(hat:i":%i"ion9, Kaccessed on .(H(6H.(1(L HSBC Says 3sia, >eposits 3re Buffer 3gainst Aecession http&99(((-#loom#erg-com9app"9ne("= Kaccessed on ,

pid>0<6<1<?8&"id>a#24u(d*ate<&re$er>europe, Kaccessed on (.H(6H.(1(L http:HHwww.hsbc.com

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