A corporate analysis

A World-class financial
institution

GROUP - 4
 INTRODUCTION

HSBC established in 1865 by Thomas Sutherland.

Its headquarter in London, it gives a local presence
in Europe, The Asia Pacific Region, The Americas,
The Middle east & Africa.
It has a vast network in 81 countries with 7000
offices & 170k employees worldwide.
It has a customer base of 32mn(including 4mn e-
Commerce based).
 SALIENT FEATURES
 In 2001, HSBC ranked 27th by the market capitalization in the
Financial Times Global 500.
 It is ranked 2nd behind the big cat Citigroup.
 HSBC group is divided into 5 divisions:
 Personal financial services
 Commercial banking
 Corporate Investment banking & markets
 Private Banking
 Others…
 It has received many award .
 ‘Most Admired financial Company’ by Management Today
 ‘Best Company in Asia’ by Finance International Asia.
 ‘Best Global Bank’ by The Banker.
 KEY OBJECTIVES

To become world’s leading financial services

organization while balancing earnings from
more stable, mature economies & those in
more volatile emerging markets.
 KEY ISSUES

To continue for focusing on customer driven

organization while increasing its network &
providing product innovation.
It is concentrating on strengthening its core
competencies & improving its competitive position.
 KEY PROBLEM AREA

It is struggling to maintain growth rate in different

segment like, Geographic segment and business
segment
 SWOT
ANALYSIS
 STRENGTHS

Brand name
It gives local banking a stress “The world’s Local
Bank”.
It maintains the value of local decision making and
accountability, by this it tries to attract the Global
customers with local strategies.
It has a vast presence in 81 countries & still looking
to grow on.
 WEAKNESSES

Low growth rate.

Struggling in private banking.
 OPPORTUNITY

E-Business offering
Acquisitions
 Political stability in Latin-America
 THREATS

Declining growth in Hong Kong.

Increasing investment avenues
Development of banking by competitor
 BCG MATRIX

High
?? Current Scenario
Cash Cow
Market Growth Rate

CIBM

PFS PRIV
REST ATE Proposed Scenario
OF
Euro ASIA
Comm
ercial pe Latin
America
Star
Hong
Kong

North
America
Low CASH COW DOG
High Relative Market Share Low
ANSOFF MODEL

Current:
Product
Development

Proposed:
Market
Development
BAV Model
 UNIQUE SELLING PROPOSITION

To implement a single technology platform across

the businesses, to benefit from global purchasing
agreements, and to centralize a large portion of
administration functions.
 COMPETITIVE ADVANTAGES

With economies of scale across virtually all financial

services product lines, the opportunities to cross-sell
are enormous.
 CORE COMPETENCY

A pool of capital is maintained at group level to meet

unforeseen events around the world.
 DIFFERENTIATION

It inserts local feeling with local strategy.

 CURRENT SCENARIO

HSBC has developed strategic called managing for

value this includes 4 component
 Development of global wealth mgt.
 Growing its commercial business.
 Integration of corporate.
 Establishing HSBC as a global Brand with local identity.
Q & A.
Q.1: Using the models illustrated in the chapter, analyse the external
(macro) environment of HSBC and identify the emerging opportunities
and threats that will affect the future investment of HSBC in the UK
financial market.
 By using the firm environment we can analyse the external {macro}
environment of HSBC we can segment into economy, technology,
culture, legislation, politics & infrastructure.

 While considering the different segment in various countries every

country has a different economy have different technology based, have
different culture and infrasture, so while going local ,HSBC should
understand these various segments while operating in those countries.

 While considering the UK financial market HSBC should see that

personal, commercial forms the measure chunk of the HSBC operation,
with personal leading with 29% of market share.
 Cont….

 By the 29 % of market share going to personal loans it can b clearly said

that the UK customers are going for lifestyles, social mobility,
consumerism and attitude. This can be turned as an opportunity for the
company.

 While looking for the threats the global recession can be major factor
for the less growth in the UK market. Due to recession the technological
inventions also stopped and so the political environment is not in a
good situation.
Q.2: Critically evaluate the current business portfolio of HSBC and
advise the company on ways to expand its financial service
offerings to serve other market segments.

 HSBC group is divided into 5 divisions that are based on customer-defined

sections and the services offered within each segment:
 Personal Financial Services (PFS)
 Commercial Banking
 Corporate Investment Banking
 Markets (CIBM), and Private Banking.
 HSBC generally serves 5 geographic segments: Hong Kong, Europe; North
America; Rest of Asia Pacific; and Latin America.
 The emerging opportunities open for HSBC for future investment must take
into account:
 A switch to fee-driven value exchange away from balance sheet
intermediation;
 Capex strength to leapfrog rivals in technology, time to market;
 Balance sheet enables both organic/inorganic investment opportunities for
growth.
 3.Comment on the organisation’s ‘Managing for Value’
strategy and its components as a strategic initiative for
achieving the above goal.
 The main objective of HSBC is to become the world’s leading financial
services organization. To achieve this, HSBC has developed what so called
‘Managing for Value’ strategy. This strategy has 4 components. The
components together form the overall strategic goal of the group.
 Development of global wealth management.
 Strengthening its commercial business.
 Integration of corporate and investment banking for larger customers.
 Establishing the HSBC hexagon as a global brand with local identity.

 Through improved economies of scale, increased brand recognition and

effective use of resources, HSBC Group can build upon its strong
international presence to achieve its long-term goal of becoming the
world’s leading financial services institution.
Thank You