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The world's local bank

Content
Introduction......................................................................................................................................1
Environment....................................................................................................................................2
Mega environment...........................................................................................................................3
International element........................................................................................ 3
Technological Element...................................................................................... 5

Task environment.............................................................................................................................6
Customers and clients....................................................................................... 6
Competitors..................................................................................................... 7

Conclusion.......................................................................................................................................9

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The world's local bank

Introduction
Hong Kong Shanghai Banking Cooperation (HSBC) is one of the worlds largest financial
service organizations and also it is the worlds eighth largest company according to a composite
survey done by Forbes magazine. HSBC was found and established by Thomas Sutherland in
1865. Thomas Sutherland (Scotsman) was a Chinese who was working for Peninsular and
Oriental Steam Navigation Company realized and figured out that there is high demand for local
banking facilities in Hongkong & along coast of
China. So he helped to establish the firm which was
opened in Hongkong in March 1965. Soon after the
formation of the bank several branches and agencies
were opened worldwide to build up a wide network
of the organization.
Currently HSBC holding is headquartered in
London, and its international network consist over
8000 offices in 87 countries and territories in
Europe, the Asia-Pacific region, the Americas, the
Middle East and Africa. The HSBC bank is one of
the biggest and profitable financial companies in the
world and also it is #3 of top 10 largest banks by
market capitalization.
HSBC was also a pioneer to modern banking in few
countries which are Japan and Thailand. In Japan
the bank acted as an adviser to government on banking and currency and in 1888 HSBC was the
first bank to be established in Thailand, where the countries first bank notes were printed.
HSBC provides a comprehensive range of financial services to around 100 million customers
through four customer groups and global businesses: Personal Financial Services (including
consumer finance); Commercial Banking; Global Banking and Markets; and Private Banking.
(table is taken from http://www.economist.com/node/7226067?story_id=7226067)
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The world's local bank

Environment
In any organization there are two types of environment which are external and internal
environment. Internal environment is a type of environment which can be controlled by the
organization, such as finances, labor, equipment & raw materials. All these factors can be
regulated by the organization according to their wish whereas external environment is a type of
environment which cannot be controlled by the organization, they are political / legal,
demographic, cultural, ecosystem, competition, economical & technology. External environment

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can be broken in to two: Mega Environment & Task Environment.

Legal-political Element

This report explains about two mega and task environmental factors which are:
International Element
Technological Element
Customers & Clients
Competitors.

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Mega environment
International element
As mentioned before, HSBC has over 8000 offices in 87 countries all over the world. But what
does the international element really mean? Does it mean only branches over the world? - No.
International element basically means the development of an organization outside its home
nation, which makes a potential impact to the organization.
International factors effects the ability of the organization to operate successfully which are such
as:
a. Fluctuations of the dollar against foreign currencies influence the ability of an organization to
compete in international markets.
b. Free-trade agreements can affect an organization either positively or negatively.
First of all lets talk about HSBC in Malaysia: HSBC opened its first office in 1884, on Penang
with privileges to issue currency notes. Then in 1909 HSBC opened new offices in Ipoh,
Malacca , Johor Bahru, 1910 in Kuala Lumpur, 1912 Kota Bharu.
Also after the acquisition of The Mercantile Bank, which was founded in 1860, HSBC indirectly
became the eldest bank in Malaysia.
Nowadays HSBC Malaysia consists of more than 5000 workers.
How does HSBC Malaysian and other branches effect HSBC headquarter which is in London?
How do the Free-Trade Agreements and Areas effect on HSBC?
Subsidiaries always affect on the financial performance of the parent company; it is reflected in
the final report in the financial statements which is called as consolidated financial statements.
In our globalizing world there are a lot of economical agreements between many countries and
even continents such as NAFTA (North America Free Trade Agreement), Japan-Malaysia
Economic Partnership Agreement signed in 2005, SAFTA (South Asia Free Trade Agreement),
etc. These agreements can directly or indirectly effect on the profitability of the company, for
example: in some Free-Trade Areas and countries there are less taxation to operate, which gives
more opportunities and profits. Also the rules and regulations of each country effect on
companys profitability, because strict rules gives less opportunities to operate and vice versa.

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The Table below shows HSBCs largest and best-known subsidiaries and their primary areas of
operation. Taken from http://www.hsbc.com/1/2/about/group-structure

Subsidiary

Primary area of operation

The Hongkong and Shanghai

Hong Kong SAR, with an extensive network throughout

Banking Corporation Limited

Asia-Pacific.

Hang Seng Bank Limited

Hong Kong SAR

HSBC Bank plc

United Kingdom

HSBC France

France

Household International, Inc.

US

HSBC Bank USA N.A.

New York State in the US

HSBC Bank Brasil S.A.- Banco

Brazil

Mltiplo
HSBC Private Banking Holdings

Switzerland, Hong Kong SAR, Monaco, Luxembourg,

(Suisse) S.A.

United Kingdom, Singapore and the Channel Islands.

Grupo Financiero HSBC, S.A. de

Mexico

C.V.

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Technological Element
The term technology refers to a branch of scientific knowledge or scientific theories which are
applied practically to come out with products and services for the satisfaction and convenience of
people in the environment. Technological element basically reflects the current knowledge on the
production and services and it also can heighten or destroy the competence between firms in an
industry. Surveys show that organizations which tends to be up-to-date in technology perform
well and are more productive compared to the other organizations who take long time to adapt to
new technologies. In todays modern world, things change very fast at a rapid speed and all the
organizations must stick to the advancement to succeed their required goals. Being updated with
technology also saves cost and time in certain works.
Almost 3/4th of the HSBC branches are up-to-date with the latest technology in the market. As
we all know today touch screen has changed the way of interaction with things HSBC have
changed most of their atms, cheque deposit and cash deposit machines in to the latest machines
which are touch screen and are enhanced with more features by removing the old machines.
HSBC offers a high quality internet banking service which is very fast and it provides customers
with an integrated and secure platform to access their accounts online. They also have the facility
to do instantaneous intercity transfers online between all branches. Phone banking is available 24
hours to give ease of access to customers and there is a high security in foreignsic security due to
internet thefts. It also offers trade and corporate banking services which are offered with realtime access to a centralized information database.
Apart from all this HSBC is the first major bank to become carbon neutral by the introduction of
renewable energy technology. This could save cost and be eco friendly as the energy is a
renewable source of energy. Currently the key areas where HSBC focuses on environmental
efficiency are:

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Benchmarking

Footprint management and innovation

Behavior

Environmental management system

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Task environment
Customers and clients
Customers and clients play an important role in each and every business. The formers are those
who have shares, purchase products, buy our services or even invest in the company.
For the bank to be renown one day, our relationship with the customers should be strengthen
even though it may take years or even a decade. There are many ways of gaining the trust of the
customers but the easiest one is, and will always be making them feel at home wherever they
are which means that the customers should feel at ease and we should always satisfy their
needs. This is what the policy of the HSBC bank is all about. According to their directors, they
have been working hard and will continue to, in order to meet their diverse customers and are
committed to continuous improvement in quality and efficiency just for the sake of their clients
and local communities.

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Competitors
Competitions take place between organizations when they engage in striving to gain more
customers and more profit. Every organization that provides the same products and services
compete with one another in order to provide better quality for a cheaper price which drives the
attention and interest of the consumer.
As there are several banking industries today HSBC has to come with unique ideas and systems
which can give more satisfaction and ease to the customer. Having activities like promotions,
contests can encourage the customers to use the products and services and it also can create
publicity. For instance if an individual is satisfied with a service he will be talking about it to his
friends which will arise their interest in trying out the service or the product this is where the
publicity increases and in the mean time the demand of products and services rise causing
competition
In order to compete with other organization a proper strategy must be done. The table below
shows SWOT analysis (Strategic plan to compete) of HSBC

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According to our survey we think that HSBC will be very successful under the current Chairman
Mr Michael Geoghegan because he has been working for HSBC for 37 years and has
experienced in almost most of HSBCs branches abroad. Due to his excellence he had worked for
HSBC branches in North, South America, Asia, Middle East , Europe , Brazil and Hong Kong to
expand the network and operation of HSBC. Moreover due to his experience he has lot of ideas
and also he knows the organization from top to bottom and he can come out with great ideas by
brainstorming with other board of directors. So far all their ideas have been successful and
productive throughout.

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Conclusion
To put in a nutshell, completing this report we were able to analyse and brainstorm in a group
where several ideas were discovered and also we clearly understood on how the Mega
Environment and Task Environment affect an organisations growth. We also gained knowledge
on the type of services which is offered by the bank.
HSBC bank became international after a long journey started more than century ago. Nowadays
HSBC is mostly known as The Worlds local bank, meaning that any customer and any client
can easily take advantages of it wherever they are. Also this brand is the synonym of trust which
has been achieved from their clients, because HSBC have no target audience, they are pleased to
provide its services to all comers.

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References

HSBC Holdings plc , 2010 , About HSBC [ online ] , HSBC , Available from
http://www.hsbc.com/1/2/about , [Accessed on 10th December 2010]

HSBC Holdings plc , 2010 , About HSBC [ online ] , HSBC , Available from
http://www.hsbc.com/1/2/about/history/1865-1899 , [ Accessed on 10th December 2010 ]

John Goyder , 1946 , Technology and society . 2nd ed , Canada , George Kerkpartic

HSBC Holding plc , 2010 , About HSBC Network [ online ] , HSBC , Available from
http://www.hsbc.com/1/2/about/network , [Accessed on 3rd December 2010 ]

Fengxiang , W, International Elements of an organization ,Weng , Beijing , Elements of


International Business ,Tsinghua University Press,2006

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No.
1

Task / Description / Responsibility

Brainstorming Ideas

Describing about International Element

Formatting the assignment

Leading the group with responsibilities

Conclusion
Brainstorming Ideas

Describing about Technological Element

Introduction

Referencing

Piling up the assignment and editing the overall content


Brainstorming Ideas

Description of Customers and Clients

Printing

Researching about the company

Facilities offered by the organization


Brainstorming Ideas

Researching information on the topics

Description about competitors

Answering the question saying whether the organization

Name & Signature


Rassul Balchikbayev

Mohammed Hammad Joufar

Bookhun Vinish Kumar

Awadh Salah Awadh Omar

is successful under current leader

SWOT Analysis

Group Task report


Group Members:
1. Rassul Balchikbayev
2. Mohammed Hammad Joufar
3. Bookhun Vinish Kumar
4. Awadh Salah Awadh Omar

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TP024035
TP020279
TP022214
TP024377

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