2017

Strategic Management of
HSBC Bangladesh
American International University
Bangladesh Limited

Assignment on

Strategic Management of HSBC Bangladesh

Prepared For
S. M. Zakaria
EMBA Program
AIUB

Prepared By
Group A
EMBA Program
Fall Semester (2017)
AIUB

8 December 2017
Table of Contents
Table of Figures ............................................................................................................................................. 4
Group Profile ................................................................................................................................................. 5
Executive Summary ................................................................................................................................... 6
Introduction .................................................................................................................................................. 9
Strategic Management ................................................................................................................................. 9
Features of Strategy .................................................................................................................................. 9
Components of a Strategy Statement ........................................................................................................ 10
Strategic Intent ....................................................................................................................................... 11
Mission Statement .................................................................................................................................. 11
Features of a Mission .......................................................................................................................... 11
Vision....................................................................................................................................................... 12
Goals and Objectives............................................................................................................................... 12
Concepts and Frameworks.......................................................................................................................... 13
SWOT analysis ......................................................................................................................................... 13
Experience curve ..................................................................................................................................... 14
Corporate Strategy and Portfolio Theory ............................................................................................... 14
Competitive Advantage .......................................................................................................................... 15
Industry Structure & Profitability ........................................................................................................ 15
Generic competitive strategies ........................................................................................................... 16
Value chain.............................................................................................................................................. 16
Core competence .................................................................................................................................... 17
The Importance and Value of Strategic Management................................................................................ 17
Financial Benefits .................................................................................................................................... 17
Nonfinancial Benefits .............................................................................................................................. 17
The Scope and Dimension of Strategic Management................................................................................. 18
Strategic Management Process .................................................................................................................. 19
Strategic Management of HSBC, Bangladesh ............................................................................................. 20
.................................................................................................................................................................... 20
Background ................................................................................................................................................. 21
Values ...................................................................................................................................................... 21
HSBC Bangladesh ........................................................................................................................................ 22
 Products .................................................................................................................................................. 22
Deposit Accounts and Schemes .......................................................................................................... 22
Credit Schemes ................................................................................................................................... 23
HSBC Amanah Bangladesh .................................................................................................................. 24
Other Services and Products ............................................................................................................... 24
Strategy ................................................................................................................................................... 24
Industry Analysis ......................................................................................................................................... 26
Five Forces Model ....................................................................................................................................... 27
Threat of New Entry in HSBC, Bangladesh: ............................................................................................. 28
Bargaining Power of Buyers in HSBC, Bangladesh: ................................................................................. 28
Bargaining powers of Suppliers in HSBC, Bangladesh: ........................................................................... 29
Threat of Substitutes in HSBC, Bangladesh:............................................................................................ 30
Competitive Rivalry of HSBC, Bangladesh:.............................................................................................. 30
SWOT Analysis of HSBC ............................................................................................................................... 31
Core Competencies ................................................................................................................................. 32
Resources and competencies ............................................................................................................. 32
Unique resources and Core competencies ......................................................................................... 32
Strategies of HSBC Bank .............................................................................................................................. 34
Generic Strategy...................................................................................................................................... 34
HSBC Consumer Banking:.................................................................................................................... 35
Unique Offers of HSBC Consumer Banking: ........................................................................................ 35
HSBC Corporate Banking: .................................................................................................................... 36
Unique Offers of HSBC Corporate Banking ......................................................................................... 36
Strategy Implementation ............................................................................................................................ 36
How effective? ........................................................................................................................................ 37
Evaluation of action plans/tactics ............................................................................................................... 37
Conclusion ................................................................................................................................................... 37
Reference .................................................................................................................................................... 38
Table of Figures

Figure 1: Steps of Strategy .......................................................................................................................... 10

Figure 2: SWOT Analysis.............................................................................................................................. 13
Figure 3: Portfolio Growth Share Matrix .................................................................................................... 15
Figure 4: Porter's Five Forces Framework................................................................................................... 15
Figure 5: Porters Value Chain...................................................................................................................... 16
Figure 6: Strategic Management Process ................................................................................................... 19
Figure 7: Background of HSBC (infographic) ............................................................................................... 25
Figure 8: Five Forces Model ........................................................................................................................ 27
Figure 9:Threat of New Entry ...................................................................................................................... 28
Figure 10: Bargaining Powers of Buyers ..................................................................................................... 29
Figure 11: Threat of Substitutes.................................................................................................................. 30
Figure 12: Competitive Rivalry .................................................................................................................... 31
Figure 13: Focused Differentiation Strategy of HSBC ................................................................................. 34
Figure 14: Strategic Market Segmentation of HSBC ................................................................................... 35
Group Profile

S/L Name ID Signature

1 Md Hafizur Rahman 17-90398-3

2 Md. AL Amin 17-90400-3

3 Md. Sultan Masum 17-90399-3

Acknowledgement

In performing our assignment, we had to take the help and guideline of some respected
persons, who deserve our greatest gratitude. The completion of this assignment gives
us much Pleasure. We would like to show our gratitude Mr. S. M. Zakaria, Course
Instructor, AIUB for giving us a good guideline for assignment. We would also like to
expand our deepest gratitude to all those who have directly and indirectly guided us in
writing this assignment.

Many people, especially our classmates and team members itself, have made valuable
comment suggestions on this proposal which gave us an inspiration to improve our
assignment. Some of our colleagues shared their experience and knowledge with us,
which helped us to complete the assignment and kept us on track. We thank all the
people for their help directly and indirectly to complete our assignment.
Executive Summary

Strategic management is one of the key tools available for managers of organizations to
establish the organizational management systems. This study will look at the key elements of
strategic management to improve an organizations strategic decision-making in a changing
environment and how strategic decision-making is done for HSBC Bank Bangladesh and how
globalization and competitive forces affect strategic decision making.

This case study aims to analyze HSBC Bangladeshs internal & external analysis, Porters five
forces model and Generic strategies. Basically we wanted to determine the intensity of
competition, its profitability level and regarding the banks suppliers and buyers. Also we
analyzed the type of strategies they pursue to achieve competitive advantages.

HSBC is one of the worlds largest banking and financial services organizations. They serve
around 38 million customers through four global businesses: Retail Banking and Wealth
Management, Commercial Banking, Global Banking and Markets, and Global Private Banking.
Its network covers 67 countries and territories in Europe, Asia, the Middle East and Africa, North
America and Latin America.

HSBC Bangladesh started operations in 1996. The bank primarily focuses on urban areas and
has branches in most areas of the capital city of Dhaka; it also has branches in the cities of
Chittagong and Sylhet. The bank also has a good number of ATM booths in the cities present; it
also has booths in most five star hotels.

HSBC Bangladesh offers a comprehensive range of financial services such as commercial

banking, consumer banking, payments and cash management, trade services, treasury, and
custody and clearing. The bank also offers offshore banking in the Export Processing Zones,
this is only limited to investors in the EPZs.

The banking industry in Bangladesh is one characterized by strict regulations and monitoring
from the central governing body, The Bangladesh Bank. As the government is often the owner
and regulator as well as the supervisor and customer of a bank, there has been many
opportunities for mismanagement over the years. The banking sector is plagued with a lack of
credit discipline, archaic loan recovery law, corruption, inefficiency, overstaffing, etc. Several
reform measures of the financial sector have been taken to improve the situation. Relative
stability achieved by the support extended by both the central bank and the Government of
Bangladesh in the past has restored public confidence in the country's banking sector.

HSBC's resources can broadly be categorized in to four main categories; these are physical
resources, financial resources, Human resources and intellectual resources. Irrespective of the
resources, the organization possesses, if the organization does not have the required
competencies, such resources may not be used effectively to operate at an optimum level.

There are five Generic Competitive strategies that companies usually follows to get competitive
advantage which are-
 1. Overall Low-Cost Provider Strategy
2. Focused Low-Cost Provider Strategy
3. Broad Differentiation Strategy
4. Focused Differentiation Strategy
5. Best-Cost Provider Strategy

The characteristics of these strategies mainly depend on the type of competitive advantage
being pursued and market targeted by the company.

Based on Generic Strategies currently HSBC is following Focused Differentiation Strategy.

Focused Differentiation Strategy means, offer niche buyers something different from rivals.
HSBC Bangladesh always tries to offer something unique to its customer than its rivals. At
present HSBC is following only some specific segments: Corporate Banking & Consumer
Banking.

The evaluation of the plans of HSBC has helped the company to lead the market. By taking this
information, the organization should be able to continue to find an innovative program and relate
effectively with the other companies in the market. The company also tends to maintain good
relationships with the customers and the shareholders. This is done effectively and efficiently by
the company for the operations to be done continuously.

HSBC bank is very much focused regarding its service from the very beginning. Means at
present they are following Focused Differentiation Strategy. It has no supplier in Bangladesh.
Bangladesh bank controls their activities very strongly. HSBC is considered as Mature Bank in
the Banking Sector.
Introduction
Strategic management is one of the key tools available for managers of organizations to
establish the organizational management systems. This study will look at the key elements of
strategic management to improve an organizations strategic decision-making in a changing
environment and how strategic decision-making is done for HSBC Bank Bangladesh and how
globalization and competitive forces affect strategic decision making.

The two key parts of strategic management are strategic planning and strategy implementation
process, jointly referred to as strategic management. Strategic planning is a separate course of
studies, which places the main emphasis on certain planning methods, while the strategic
management course is based on the issues of implementation of plans, principles of adaptation
of the internal and external environment, and the understanding of methods.

In this study we will briefly discuss strategic management and strategic management process
and then we will discuss strategic management process in HSBC Bank, Bangladesh.

Strategic Management
Strategic management is the formulation and implementation of the major goals and initiatives
taken by a company's top management on behalf of owners, based on consideration of
resources and an assessment of the internal and external environments in which the
organization competes. Strategy is defined as "the determination of the basic long-term goals of
an enterprise, and the adoption of courses of action and the allocation of resources necessary
for carrying out these goals. Strategies are established to set direction, focus effort, define or
clarify the organization, and provide consistency or guidance in response to the environment.

Strategic Management is all about identification and description of the strategies that managers
can carry to achieve better performance and a competitive advantage for their organization. An
organization is said to have competitive advantage if its profitability is higher than the average
profitability for all companies in its industry.

Strategic management can also be defined as a bundle of decisions and acts which a manager
undertakes and which decides the result of the firms performance. The manager must have a
thorough knowledge and analysis of the general and competitive organizational environment to
take right decisions. They should conduct a SWOT Analysis (Strengths, Weaknesses,
Opportunities, and Threats), i.e., they should make best possible utilization of strengths,
minimize the organizational weaknesses, make use of arising opportunities from the business
environment and shouldnt ignore the threats.

Features of Strategy
Strategy is Significant because it is not possible to foresee the future. Without a perfect
foresight, the firms must be ready to deal with the uncertain events which constitute the
business environment.
 Strategy deals with long term developments rather than routine operations, i.e. it deals
with probability of innovations or new products, new methods of productions, or new
markets to be developed in future.
Strategy is created to take into account the probable behavior of customers and
competitors. Strategies dealing with employees will predict the employee behavior.

Figure 1: Steps of Strategy

Strategy is a well defined roadmap of an organization. It defines the overall mission, vision and
direction of an organization. The objective of a strategy is to maximize an organizations
strengths and to minimize the strengths of the competitors. Strategy, in short, bridges the gap
between where we are and where we want to be.

Components of a Strategy Statement

The strategy statement of a firm sets the firms long-term strategic direction and broad policy
directions. It gives the firm a clear sense of direction and a blueprint for the firms activities for
the upcoming years. The main constituents of a strategic statement are as follows:
Strategic Intent
An organizations strategic intent is the purpose that it exists and why it will continue to exist,
providing it maintains a competitive advantage. Strategic intent gives a picture about what an
organization must get into immediately in order to achieve the companys vision. It motivates the
people. It clarifies the vision of the vision of the company.

Strategic intent helps management to emphasize and concentrate on the priorities. Strategic
intent is, nothing but, the influencing of an organizations resource potential and core
competencies to achieve what at first may seem to be unachievable goals in the competitive
environment. A well expressed strategic intent should guide/steer the development of strategic
intent or the setting of goals and objectives that require that all of organizations competencies
be controlled to maximum value. Strategic intent includes directing organizations attention on
the need of winning; inspiring people by telling them that the targets are valuable; encouraging
individual and team participation as well as contribution; and utilizing intent to direct allocation of
resources.

Mission Statement
Mission statement is the statement of the role by which an organization intends to serve its
stakeholders. It describes why an organization is operating and thus provides a framework
within which strategies are formulated. It describes what the organization does (i.e., present
capabilities), who all it serves (i.e., stakeholders) and what makes an organization unique (i.e.,
reason for existence).

A mission statement differentiates an organization from others by explaining its broad scope of
activities, its products, and technologies it uses to achieve its goals and objectives. It talks about
an organizations present (i.e., about where we are). For instance, Microsofts mission is to
help people and businesses throughout the world to realize their full potential. Wal-Marts
mission is To give ordinary folk the chance to buy the same thing as rich people. Mission
statements always exist at top level of an organization, but may also be made for various
organizational levels. Chief executive plays a significant role in formulation of mission
statement. Once the mission statement is formulated, it serves the organization in long run, but
it may become ambiguous with organizational growth and innovations.

Features of a Mission
Mission must be feasible and attainable. It should be possible to achieve it.
Mission should be clear enough so that any action can be taken.
It should be inspiring for the management, staff and society at large.
It should be precise enough, i.e., it should be neither too broad nor too narrow.
It should be unique and distinctive to leave an impact in everyones mind.
It should be analytical,i.e., it should analyze the key components of the strategy.
It should be credible, i.e., all stakeholders should be able to believe it.
Vision
A vision statement identifies where the organization wants or intends to be in future or where it
should be to best meet the needs of the stakeholders. It describes dreams and aspirations for
future. For instance, Microsofts vision is to empower people through great software, any time,
any place, or any device. Wal-Marts vision is to become worldwide leader in retailing.

A vision is the potential to view things ahead of themselves. It answers the question where we
want to be. It gives us a reminder about what we attempt to develop. A vision statement is for
the organization and its members, unlike the mission statement which is for the
customers/clients. It contributes in effective decision making as well as effective business
planning. It incorporates a shared understanding about the nature and aim of the organization
and utilizes this understanding to direct and guide the organization towards a better purpose. It
describes that on achieving the mission, how the organizational future would appear to be.

An effective vision statement must have following features-

It must be unambiguous.
It must be clear.
It must harmonize with organizations culture and values.
The dreams and aspirations must be rational/realistic.
Vision statements should be shorter so that they are easier to memorize.

In order to realize the vision, it must be deeply instilled in the organization, being owned and
shared by everyone involved in the organization.

Goals and Objectives

A goal is a desired future state or objective that an organization tries to achieve. Goals specify
in particular what must be done if an organization is to attain mission or vision. Goals make
mission more prominent and concrete. They co-ordinate and integrate various functional and
departmental areas in an organization. Well made goals have following features-

These are precise and measurable.

These look after critical and significant issues.
These are realistic and challenging.
These must be achieved within a specific time frame.
These include both financial as well as non-financial components.

Objectives are defined as goals that organization wants to achieve over a period. These are the
foundation of planning. Policies are developed in an organization to achieve these objectives.
Formulation of objectives is the task of top-level management. Effective objectives have
following features-
 These are not single for an organization, but multiple.
Objectives should be both short-term as well as long-term.
Objectives must respond and react to changes in environment, i.e., they must be
flexible.
These must be feasible, realistic and operational.

Concepts and Frameworks

The progress of strategy can be charted by a variety of frameworks and concepts introduced by
management consultants and academics. These reflect an increased focus on cost, competition
and customers. These "3 Cs" were illuminated by much more robust empirical analysis at ever-
more granular levels of detail, as industries and organizations were disaggregated into business
units, activities, processes, and individuals in a search for sources of competitive advantage.

SWOT analysis
SWOT analysis (or SWOT matrix) is an acronym for strengths, weaknesses, opportunities, and
threats and is a structured planning method that evaluates those four elements of an
organization, project or business venture. A SWOT analysis can be carried out for a company,
product, place, industry, or person. It involves specifying the objectives of the business venture
or project and identifying the internal and external factors that are favorable and unfavorable to
achieve that objective.

Strengths: characteristics of the business or project that give it an advantage over others
Weaknesses: characteristics of the business that place the business or project at a
disadvantage relative to others
Opportunities: elements in the environment that the business or project could exploit to
its advantage
Threats: elements in the environment that could cause trouble for the business or project

Figure 2: SWOT Analysis

Experience curve
The Boston Consulting Group developed the experience curve in 1966. It is a hypothesis that
total per unit costs decline systematically by as much as 1525% every time cumulative
production doubles. Some firms at various points in their history have empirically confirmed it.
Costs decline due to a variety of factors, such as the learning curve, substitution of labor for
capital (automation), and technological sophistication. Author Walter Kiechel wrote that it
reflected several insights, including:

A company can always improve its cost structure;

Competitors have varying cost positions based on their experience;
Firms could achieve lower costs through higher market share, attaining a competitive
advantage; and
An increased focus on empirical analysis of costs and processes, a concept that author
Kiechel refers to as "Greater Taylorism".

Corporate Strategy and Portfolio Theory

The concept of the corporation as a portfolio of business units, with each plotted graphically
based on its market share (a measure of its competitive position relative to its peers) and
industry growth rate (a measure of industry attractiveness), was summarized in the growth
share matrix developed by the Boston Consulting Group around 1970. By 1979, one study
estimated that 45% of the Fortune 500 companies were using some variation of the matrix in
their strategic planning. This framework helped companies decide where to invest their
resources.

Portfolio Theory: A strategy based primarily on diversification through acquisition. The

corporation shifts resources among the units and monitors the performance of each business
unit and its leaders. Each unit generally runs autonomously, with limited interference from the
corporate center provided goals are met.

Restructuring: The corporate office acquires then actively intervenes in a business where it
detects potential, often by replacing management and implementing a new business strategy.

Transferring Skills: Important managerial skills and organizational capability are essentially
spread to multiple businesses. The skills must be necessary to competitive advantage.

Sharing Activities: Ability of the combined corporation to leverage centralized functions, such
 Figure 3: Portfolio Growth Share Matrix

Competitive Advantage
In 1980, Porter defined the two types of competitive advantage an organization can achieve
relative to its rivals: lower cost or differentiation. This advantage derives from attribute(s) that
allow an organization to outperform its competition, such as superior market position, skills, or
resources. In Porter's view, strategic management should be concerned with building and
sustaining competitive advantage.

Industry Structure & Profitability

Porter developed a framework for analyzing the profitability of industries and how those profits
are divided among the participants in 1980. In five forces analysis he identified the forces that
shape the industry structure or environment. The framework involves the bargaining power of
buyers and suppliers, the threat of new entrants, the availability of substitute products, and the
competitive rivalry of firms in the industry. These forces affect the organization's ability to raise
its prices as well as the costs of inputs (such as raw materials) for its processes.

Figure 4: Porter's Five Forces Framework

The five forces framework helps describe how a firm can use these forces to obtain a
sustainable competitive advantage, either lower cost or differentiation. Companies can
maximize their profitability by competing in industries with favorable structure. Competitors can
take steps to grow the overall profitability of the industry, or to take profit away from other parts
of the industry structure. Porter modified Chandler's dictum about structure following strategy by
introducing a second level of structure: while organizational structure follows strategy, it in turn
follows industry structure.

Generic competitive strategies

Porter wrote in 1980 that strategy target either cost leadership, differentiation, or focus. These
are known as Porter's three generic strategies and can be applied to any size or form of
business. Porter claimed that a company must only choose one of the three or risk that the
business would waste precious resources. Porter's generic strategies detail the interaction
between cost minimization strategies, product differentiation strategies, and market focus
strategies.

Porter described an industry as having multiple segments that can be targeted by a firm. The
breadth of its targeting refers to the competitive scope of the business. Porter defined two types
of competitive advantage: lower cost or differentiation relative to its rivals. Achieving competitive
advantage results from a firm's ability to cope with the five forces better than its rivals. The
concept of choice was a different perspective on strategy, as the 1970s paradigm was the
pursuit of market share (size and scale) influenced by the experience curve. Companies that
pursued the highest market share position to achieve cost advantages fit under Porter's cost
leadership generic strategy, but the concept of choice regarding differentiation and focus
represented a new perspective.

Value chain
Porter's 1985 description of the value chain refers to the chain of activities (processes or
collections of processes) that an organization performs in order to deliver a valuable product or
service for the market. These include functions such as inbound logistics, operations, outbound
logistics, marketing and sales, and service, supported by systems and technology infrastructure.
By aligning the various activities in its value chain with the organization's strategy in a coherent

Figure 5: Porters Value Chain

way, a firm can achieve a competitive advantage. Porter also wrote that strategy is an internally
consistent configuration of activities that differentiates a firm from its rivals. A robust competitive
position cumulates from many activities which should fit coherently together.

Core competence
Gary Hamel and C. K. Prahalad described the idea of core competency in 1990, the idea that
each organization has some capability in which it excels and that the business should focus on
opportunities in that area, letting others go or outsourcing them. Further, core competency is
difficult to duplicate, as it involves the skills and coordination of people across a variety of
functional areas or processes used to deliver value to customers.

The Importance and Value of Strategic Management

A number of reasons are given by authors to as why organizations should engage in strategic
management. Many research studies show both financial and nonfinancial benefits which can
be derived from a strategic-management approach to decision making.

Financial Benefits
The question "Why should an organization engage in strategic management?" must be
answered by looking at the relationship between strategic management and performance.

Research performed by Eastlack and McDonald (1970), Thune and House (1970), Ansoff et. al.
(1971), Karger and Malik (1975), and Hofer and Schendel (1978) indicate that formalized
strategic management (strategic planning) does result in superior performance by organizations.
Each of these studies was able to provide conceiving evidence of the profitability of strategy
formulation and implementation. The formalized strategic management process does make a
difference in the recorded measurements of profits, sales, and return on assets. Organizations
that adopt a strategic management approach can expect that the news system will lead to
improved financial performance.

Nonfinancial Benefits
Regardless of the profitability of strategic management, several behavioral effects can be
expected to improve the welfare of the firm. Yoo and Digman emphasize that strategic
management is needed to cope with and manage uncertainty in decision making. They present
several benefits of strategic management:

It provides a way to anticipate future problems and opportunities.

It provides employees with clear objectives and directions for the future of the
organization.
 It results in more effective and better performance compared to non-strategic
management organizations.
It increases employee satisfaction and motivation.
It results in faster and better decision making and
It results on cost savings.
Moreover, Greenley stresses that strategic management offers the following process
and personal benefits:
It allows for identification, prioritization, and exploitation of opportunities.
It provides an objective view of management problems.
It represents a framework for improved coordination and control of activities.
It minimizes the effects of adverse conditions and changes.
It allows major decisions to better support established objectives.
It allows more effective allocation of time and resources to identified opportunities.
It allows fewer resources and less time to be devoted to correcting erroneous or ad hoc
decisions.
It creates a framework for internal communication among personnel.
It helps to integrate the behavior of individuals into a total effort.
It provides a basic for the clarification of individual responsibilities.
It gives encouragement to forward thinking.
It provides a cooperative, integrated, and enthusiastic approach to tackling problems and
opportunities.
It encourages a favorable attitude towards change.
It gives a degree of discipline and formality to the management of a business.

These and other research studies have concluded that strategic management is an integral and
important function of organization life. However, successful organizations are successful for
many reasons: adequate resources, good products and services, and so on. While not a
panaceas, the strategic management process is only a powerful tool. It value lies with executive
and the ability to use this strategic management tool in effectively managing the enterprise.

The Scope and Dimension of Strategic Management

Strategic management focuses on the total enterprise. It involves the planning, directing,
organizing, and controlling of the strategy-related decisions and actions of the business.

Management process. Management process as relate to how strategies are created and
changed.
Management decisions. The decisions must relate clearly to a solution of perceived
problems (how to avoid a threat; how to capitalize on an opportunity).
Time scales. The strategic time horizon is long. However, it for company in real trouble
can be very short.
 Structure of the organization. An organization is managed by people within a structure.
The decisions which result from the way that managers work together within the
structure can result in strategic change.
Activities of the organization. This is a potentially limitless area of study and we normally
shall center upon all activities which affect the organization.

Strategic Management Process

Strategic management process consists of 6 steps-

Figure 6: Strategic Management Process

 Strategic Management of HSBC,
Bangladesh

Designated CEO: John M. Flint (Feb 21, 2018)

CEO: Stuart Gulliver (Jan 1, 2011Feb 20, 2018)
Headquarters: London, United Kingdom
Revenue: 47.96 billion USD (2016)
Background

HSBC is one of the worlds largest banking and financial services organizations. They serve
around 38 million customers through four global businesses: Retail Banking and Wealth
Management, Commercial Banking, Global Banking and Markets, and Global Private Banking.
Its network covers 67 countries and territories in Europe, Asia, the Middle East and Africa, North
America and Latin America.

With around 3,900 offices worldwide, HSBC aim to be where the growth is, connecting
customers to opportunities, enabling businesses to thrive and economies to prosper, and
ultimately helping people to fulfil their hopes and realise their ambitions.

Listed on the London, Hong Kong, New York, Paris and Bermuda stock exchanges, shares in
HSBC Holdings plc are held by more than 203,000 shareholders in 132 countries and territories.

Values
HSBC believe in acting with courageous integrity. They are:

Dependable

Standing firm for what is right, delivering on commitments, being resilient and trustworthy
Taking personal accountability, being decisive, using judgment and common sense,
empowering others

Open to different ideas and cultures

Communicating openly, honestly and transparently, welcoming challenge, learning from

mistakes
 Listening, treating people fairly, being inclusive, valuing different perspectives

Connected to customers, communities, regulators and each other

Building connections, being aware of external issues, collaborating across boundaries

Caring about individuals and their progress, showing respect, being supportive and
responsive

HSBC Bangladesh
HSBC Bangladesh started operations in 1996. The bank primarily focuses on urban areas and
has branches in most areas of the capital city of Dhaka; it also has branches in the cities of
Chittagong and Sylhet. The bank also has a good number of ATM booths in the cities present; it
also has booths in most five star hotels.

HSBC Bangladesh offers a comprehensive range of financial services such as commercial

banking, consumer banking, payments and cash management, trade services, treasury, and
custody and clearing. The bank also offers offshore banking in the Export Processing Zones,
this is only limited to investors in the EPZs.

A special service called NRB Services is also available for non-resident Bangladeshis; this
service allows consumers to maintain accounts in US Dollars, Pound Sterling and Euros.
People using this service can freely remit money from Bangladesh to any part of the world and
can access their money from any HSBC booth around the world.

HSBC Bangladesh has a help center, which operates on daily basics. It is one of the very few
banks in the country to offer day night banking. It also has begun to support education initiatives
for people with disabilities; the bank recently collaborated with the Blind Education and
Rehabilitation Development Organization to give scholarships to people with blindness.

Products
Deposit Accounts and Schemes
As a normal banking practice HSBC has provisions for Current account and Savings account for
its clients. So you may have any or both of these accounts in HSBC. In addition the bank has
several attractive schemes for deposit. These are:
 Smart Savers Plan
Savings Plus
Savings Extra
Term Deposit
Monthly Interest Bearing Time Deposit
Education Saving Plan

Most of these schemes provide good interest rates and encourage people to save more, and
face future challenges smoothly. Monthly Interest Bearing Time Deposit is supposed to be
availed by senior citizens of the society. Those who are in retired life may deposit a good
amount from their service benefits and earn an amount every month to ease their hardship. So
you may pursue one of the schemes from the above list that seems to be suitable for you.

Credit Schemes
Credit Schemes of HSBC may be classified in two groups. These are Personal credit and
Corporate Loans. You are qualified for certain personal loans if you fulfill some conditions. The
conditions seem to be very logical as you have to pay the loan back within a time frame. The
personal credits are named as follows:

Home Loan
Home Equity Loan
Any purpose Loan
Car Loan
Personal Secured Loan
Personal Secured Credit

So you are to decide a priority of your needs and apply for a loan from HSBC. You may apply
online even.

HSBC Bank provides different corporate services. These are pointed out below:

Export Service
Import Service
Trade Express
Electronic DC Advising

Export Services include Pre-shipment Finance, Post-shipment Finance, and Documentary

Credit advising. For availing HSBC export service you dont require to have anything special.
Even if you dont maintain an account with it, you may get the services. So never hesitate to
ask.

Import Services are, Documentary Credit, Documentary Collections, Import Finance, and
Shipping Guarantee. Highly skilled Trade and Supply professionals of HSBC bank are always
ready to help you. In addition worldwide HSBC network would address your business needs
anywhere on the globe.
Trade Express is a combination of trade services for HSBCs priority clients. Traditional services
and modern Electronic DC advising meet together for presenting you a remote banking facility.

HSBC Amanah Bangladesh

Amanah is the bunch of banking services in compliant with Islamic Laws (Shariah). HSBC
Bangladesh presents these services to the customers after proper scrutiny by Central Shariah
Committee. The committee comprises of internationally reputed Islamic scholars in banking,
Finance and Economics. Amanah provides almost all banking services of deposit and credit for
the interested clients.

Other Services and Products

Nonresident Bangladeshis who are earning valuable foreign currency for the country are given
proper attention by HSBC Bangladesh. NRBs may have F/C Current Accounts, F/C Time
Deposit Accounts, Nonresident Taka Accounts, and Local Currency Time Deposit Accounts.
NRBs are also provided with Amanah Services if they desire to get it.

HSBC provides you Internet banking opportunity. Well, you need not be worried about safety of
your account. Its internet service is well protected from any cyber attack. The protection system
is always updating itself to remain vigilant for newer versions of attacks.

The bank presents Credit card service to its customers. This Master card is acceptable at super
stores, hotels, restaurants, airlines and almost each renowned service provider in the country.
Travelers Check is another good service for you from HSBC. You may travel being free from all
tension about carrying cash.

Strategy
We have developed a long-term strategy that reflects our purpose and enables us to capture
value from our international network.Our long-term, two-part strategy is to:

Develop our international network

To facilitate international trade and capital flows and serve our clients, with potential to help
them grow from small enterprises into large multinationals.

Invest in wealth and retail businesses with local scale

To make the most of global social mobility, wealth creation and long-term demographic changes
in our priority markets.
Figure 7: Background of HSBC (infographic)
Industry Analysis

The banking industry in Bangladesh is one characterized by strict regulations and monitoring
from the central governing body, The Bangladesh Bank. As the government is often the owner
and regulator as well as the supervisor and customer of a bank, there has been many
opportunities for mismanagement over the years. The banking sector is plagued with a lack of
credit discipline, archaic loan recovery law, corruption, inefficiency, overstaffing, etc. Several
reform measures of the financial sector have been taken to improve the situation. Relative
stability achieved by the support extended by both the central bank and the Government of
Bangladesh in the past has restored public confidence in the country's banking sector.
Moreover, Nationalized Commercial Banks (NCBs) and old generation Private Commercial
Banks (PCBs) would have to lower the rate of NPAs in their portfolios. Failure to do so would
mean re-capitalization, at least for the NCBs. This may in turn lead to a further drain on the
limited resources of the Government of Bangladesh. At this time or in the immediate future this
re-capitalization would not be feasible.

With these conditions in place, the World Bank anticipates the likelihood of a situation where the
ever-increasing burden of non-performing loans and growing rate of debt servicing would place
the economy under enormous strain and result in a crisis in the banking sector in the long term.
The main concern is that currently there are far too many banks for the bank to sustain.

As a result the market will accommodate only those banks that can transpire as the most
competitive and profitable ones in the future.

Currently the major financial institutions under the banking system include

Bangladesh Bank
Commercial Banks
Islamic Banks
Leasing Companies
Finance Companies

Generally, the commercial banks and the finance companies provide myriad of banking
products to cater to the needs of their customers. However, the Bangladeshi Banking industry is
characterized by the tight Banking rules and regulations set by the Bangladesh Bank. All banks
and financial institutions are highly governed and controlled under the Banking Companies Act
1993.

The range of banking products and services is also limited in scope. With the liberalization of
markets competitions among the banking products seems to be growing more instances each
day. In addition, the banking products offered in Bangladesh are fairly homogeneous in nature
due to the tight regulations imposed by the central bank. Competing through differentiation is
increasingly difficult and other banks quickly duplicate any innovative banking service.
 Five Forces Model
Michael Porter's famous Five Forces of Competitive Position model provides a simple
perspective for assessing and analyzing the competitive strength and position of a corporation
or business organization. The following figure gives an overview of the Model.

New Market Entrants, eg:

entry ease/barriers
geographical factors
incumbents resistance
new entrant strategy
routes to market

Buyer Power, eg:

Supplier Power, eg:
Competitive Rivalry, eg: buyer choice
brand reputation buyers
geographical number and size of firms size/number
coverage industry size and trends change
product/service fixed v variable cost cost/frequency
bases
level quality product/service
relationships with product/service ranges
importance
differentiation, strategy
customers volumes, JIT
bidding scheduling
processes/capabili
ties

Product and Technology

Development, eg:

alternatives price/quality
market distribution
changes
fashion and trends
legislative effects

Figure 8: Five Forces Model

Threat of New Entry in HSBC, Bangladesh:
In Porters five forces, threat of new entrants refers to the threat new competitors pose to
existing competitors in an industry. A profitable industry will attract more competitors looking to
achieve profits. Threat of new entry of HSBC bank is given below:

Figure 9:Threat of New Entry

Bargaining Power of Buyers in HSBC, Bangladesh:

Porter's Five Forces of buyer bargaining power refers to the pressure consumers can exert on
businesses to get them to provide higher quality products, better customer service, and lower
prices. When analyzing the bargaining power of buyers, the industry analysis is being
conducted from the perspective of the seller.

HSBC has a good customer base. They have 2000 corporate customers and around 1,00,000
regular customers. Therefore:
 Figure 10: Bargaining Powers of Buyers

Bargaining powers of Suppliers in HSBC, Bangladesh:

The presence of powerful suppliers reduces the profit potential in an industry. Suppliers
increase competition within an industry by threatening to raise prices or reduce the quality of
goods and services. HSBC has actually no direct suppliers; however, it has different regulators
who can be counted as their suppliers.

Bangladesh Bank is one of the prime regulators as it operates and decides how other
banks operate in Bangladesh.
Bangladesh Bank usually controls the amount of cash supply in the economy.
Other regulators include Hong-Kong central Bank of US and UK.

These regulators can actually control the quality and service of HSBC Bank. Therefore, the
suppliers of HSBC bank have moderate power.
Threat of Substitutes in HSBC, Bangladesh:
A substitute product is one that may offer the same or similar benefits to a company as a
product from another industry. The threat of a substitute is the level of risk that a company faces
from replacement by its substitutes. Threats of substitute for HSBC are given below:

Figure 11: Threat of Substitutes

Competitive Rivalry of HSBC, Bangladesh:

The last of Porters five forces deals with firms competing within the industry and the extent to
which they exert pressure on each other. This pressure leads to limits on the profit potential of
these firms. In industries where there is fierce competitive rivalry to contend with, there are
efforts to gain the most profit and market share from each other. This battle can end up
decreasing the potential for profit for all of the companies. Competitive rivalry of HSBC is given
below:
 Figure 12: Competitive Rivalry

SWOT Analysis of HSBC

When we deeply analysis the position of any company, SWOT analysis plays a significant role.
Like other companies, HSBC also has some internal strength and weakness as well as some
external opportunities and threats.
 Figure 13: SWOT of HSBC

Core Competencies
Resources and competencies

HSBC's resources can broadly be categorized in to four main categories; these are physical
resources, financial resources, Human resources and intellectual resources. Irrespective of the
resources, the organization possesses, if the organization does not have the required
competencies, such resources may not be used effectively to operate at an optimum level.

Unique resources and Core competencies

Having analyzed HSBC's resources and competencies, they can further be segregated as core
resources and competencies, which as defined above are beyond competitor's ability to imitate
and thus provide HSBC with a competitive advantage. These can be divided further as
intangible and tangible.
HSBC's expertise, which spans over and intellectual properties such as its vast customer
database, allows the bank to optimize its delivery network by providing the right product to the
customer using the most cost effective process. For a competitor to imitate this would require
access to resources such as diversified customer databases and superior expertise. While one
can argue that both can be obtained, the cost of such acquisition would require significant
investment in an organizations branch network and business processes. This level of
investment is beyond many competitors.

HSBC's brand name is another one of its core resources. For many businesses, the brand
name and what it represents are it's most important asset-the basis of competitive advantage
and of future earning streams. Having the world's no one banking brand allows HSBC to clearly
differentiate from its competition not only in terms of its existing markets, but also for emerging
markets. To sustain and develop the brand name to a level that can challenge HSBC would be
beyond most competition.

While HSBC's most significant core competencies and resources lie in the form of intangible
assets, one of its key tangible core resources is its branch network. As explained above it spans
over 88 countries worldwide and covers both mature and emerging financial markets, which
places HSBC in a unique position, especially against domestic banks to provide international
banking solutions to its customers. Creation of such a branch network not only requires a
significant capital investment and expertise but would also mean a paradigm shift in the
organizations existing business process to suit different operating environments. With the
developments in the technology paving the way towards comprehensive online banking, the
value of maintaining a retail branch network is subject to some criticism, especially considering
the costs involved in maintaining and upgrading it. If the basic bank products, especially those
associated with encashment and money transmission, are increasingly provided by alternative
technology distribution channels, comprehensive branch networks on a scale comparable with
the present will almost certainly cease to exist. However, given that most banking products are
generic and can easily be imitated by the customers, the banks competitive advantage would
rely on its service, trust, and friendliness as perceived by the customers. Branches play a key
role in portraying this image. Financial service products are comparatively intangible, and
innovatory ideas are copied swiftly and easily by competitors. The efficiency and image
portrayed by the high-street networks are, therefore, essential core components of
differentiation strategies seeking competitive advantage.

HSBC strong capital base is another one of its core resources. In terms of market capitalization,
it is the fifth biggest Bank in the world. The strong capital base and the ability to raise further
capital enable HSBC with opportunities for growth.
Strategies of HSBC Bank
Generic Strategy
There are five Generic Competitive strategies that companies usually follows to get competitive
advantage which are-

6. Overall Low-Cost Provider Strategy

7. Focused Low-Cost Provider Strategy
8. Broad Differentiation Strategy
9. Focused Differentiation Strategy
10. Best-Cost Provider Strategy

The characteristics of these strategies mainly depend on the type of competitive advantage
being pursued and market targeted by the company.

Figure 14: Focused Differentiation Strategy of HSBC

Based on Generic Strategies currently HSBC is following Focused Differentiation Strategy.

Focused Differentiation Strategy means, offer niche buyers something different from rivals.
HSBC Bangladesh always tries to offer something unique to its customer than its rivals. At
present HSBC is following only some specific segments:
 Figure 15: Strategic Market Segmentation of HSBC

HSBC Consumer Banking:

Consumer banking of HSBC has a primary focus on building deposit and making loans from
individuals. Nevertheless, they follow some specific conditions, like:

To open an account an individual must deposit the amount of minimum 10, 00, 000 BDT.
Have an agreement with HSBC to open employee salary accounts.

Unique Offers of HSBC Consumer Banking:

Phone Banking: Need any banking service and information just call 16240 (Applicable
only for Bangladesh)
Value added Service by Personal Internet Banking: Save time by using Value Added
Services from HSBC Personal Internet Banking (PIB). This feature is a faster andmore
convenient way for you to apply for different HSBC products and services anytime,
anywhere.

Loans: Personal Loans, Home Loans and Other Life style Benefits.
HSBC Corporate Banking:
Corporate banking of HSBC in Bangladesh deals with corporate clients but at present this
bank only focusing some special criteria.

Give loans only to those companies thats annual sales is over USD 30M equivalent.
The parent company banks with HSBC in other countries.

Unique Offers of HSBC Corporate Banking

HSBC always chooses a market niche where buyers have distinctive preferences, special
requirements and unique needs. Moreover, it develops unique capabilities to serve needs to its
unique buyer segment. Like:

Geographic Uniqueness
Specialized requirements of using and getting their services

In conclusion, we can say that HSBC in Bangladesh follows only focused differentiation Generic
Strategy because,

HSBC does not follow the Low Cost Provider Strategy as its overall cost of every service
is very high
HSBC does not follow the best cost provider strategy as it provides good services to its
client but at an excellent cost.

HSBC never follows broad differentiation strategy as from the very beginning this bank is very
focused to provide its services.

Strategy Implementation
An intensive planning helps the firm to implement a strategy, which they chose. This is done
with the help from management and the leaders. In addition to that, the efficient and effective
leadership in the organization gives a responsibility to the team and the management networks
as the total capacity of the performance in terms of activities and development is based upon it.
How effective?
Based on the analysis, it is understood that implementing the HSBC business approach has
been quite effective because of the advantage in the competition and its position in the market.
Making use of the planning helps to monitor the implementation strategically.

Evaluation of action plans/tactics

The evaluation of the plans of HSBC has helped the company to lead the market. By taking this
information, the organization should be able to continue to find an innovative program and relate
effectively with the other companies in the market. The company also tends to maintain good
relationships with the customers and the shareholders. This is done effectively and efficiently by
the company for the operations to be done continuously. The company conceptualizes and
implements approach strategically so that it will be able to set certain trends in the industry of
finance and banking. Apart from development of the strategies, the company also focuses on
building the customer and employee relationships. Customers are given high priority, as they
are the main reason for any business to be alive in the market.

Conclusion
The Hongkong and Shanghai banking Corporation (HSBC) started its financial activities in
Bangladesh with a debutant branch in 1996. Now at 2016, it has 13 offices. 39 ATMs and 9
Customer Service Centers are providing its clients with world-class service all the time.
Moreover it has one offshore bank and offices at 7 EPZs of the country. This bank is very much
focused regarding its service from the very beginning. Means at present they are following
Focused Differentiation Strategy. It has no supplier in Bangladesh. Bangladesh bank controls
their activities very strongly. HSBC is considered as Mature Bank in the Banking Sector
because:

HSBC is moving toward rapid growth in Bangladesh

Nearly all potential clients are already existing clients of other banks.
Head to Head competition occurs for market share in the market. As HSBC is the 3rd
most profitable bank in Bangladesh, it faces a huge competition continuously.
Moreover at present, international al competition is also increasing.
Reference

1. Management by Stephen P. Robbins and Marry Coulter, 8th Edition

2. Strategic Management by University of Latvia
3. Strategic Management & Strategic Planning at Ruskin College
4. Strategic Management & Strategic Planning Process by Stevens Maleka
5. Interviews of HSBC Bank Personnel
6. Various Websites
http://www.managementstudyguide.com/strategic-management.htm
https://en.wikipedia.org/wiki/Strategic_management
http://www.introduction-to-management.24xls.com/en241
http://www.introduction-to-management.24xls.com/en213
http://www.about.hsbc.com.bd/
http://www.hsbc.com/about-hsbc
http://bankinfobd.com/banks/7/HSBC
http://www.thedailystar.net/business/hsbc-will-continue-invest-bangladesh-1452121
https://www.ukessays.com/essays/marketing/strategic-capabilities-available-to-
multinational-corporations-marketing-essay.php
https://www.ukessays.com/essays/marketing/analysis-and-development-strategy-of-
hsbc-bank-marketing-essay.php