The most important intention of the report is to investigate the business environment of HSBC Holdings PLC. HSBC Holdings also is one of the market leaders in today’s banking world. HSBC head office it can be found at London’s Canary Wharf on the HSBC tower. HSBC stands for Hong Kong and Shanghai Banking Corporation, which was established by a man from Scotland, named Thomas Sutherland, in 1865. The report presents information about the company’s activities, financial performance and market environment. Going through few major topics will provide investors with reasonable overview. The first part of the main body will primarily focus on the Company’s Profile and Activities, afterwards the analysis of macro-environment and the micro-environment of the company, evidence of an audit of key competences within the company followed with the recommendations and conclusion.
Profile of company
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HSBC has got over 7.500 offices in 87 countries. It is very widespread and has around 220.000 shareholders in 124 countries and territories. HSBC provides a full range of financial services being Personal Financial Services, Commercial Banking, Corporate Investment Banking and Markets Private Banking.
HSBC is mainly operating in Europe, Hong Kong, Asia-pacific region, Australia and America. HSBC is interested in the emerging markets of Asia-Pacific region and is continuously heavily investing in these regions.
The major top UK competitors of HSBC are Barclays and Royal Bank of Scotland. Those are the corporations operation of which HSBC carefully investigates and tracks at all times. However HSBC is not a bank that follows the ideas and the management manners of its competitors.
HSBC Holdings PLC has shown steady growth in share price over the last five years. This is a clear indicator that a company is worth investing in. HSBC Group also demonstrates constant growth and is a very reliable corporation. These enable us to recommend investing in HSBC because of its growth opportunities and bright profitable prospects.
The HSBC banking corporation is on third position in the world in regard to assets ownership. Almost 22% of HSBC’s profits have been derived from Hong Kong, which is a well known operational centre.
Known as the world’s local bank, HSBC has a history of helping millions of customers globally in order to achieve their financial aspirations. They understand the importance and functioning of different markets through their experience in international trade. As a result, HSBC has grown into a company or banking institution that has the deepest respect for different cultures and people connected to these cultures. Their motto is to look at their customers as individuals and strive towards providing them with a personalised service and credit card products that will fit each of their specific needs.
Simultaneously, HSBC Group has been trying to build up a good reputation in the US and conquer the markets of HSBC – North America, proudly stands one of the top 10 financial services companies in the United States. Its combined team reached more than 53,000 employees works with the common goal of meeting the needs for about 100 million customers.
After achieving the goals in US, the company focused on developing countries and is more interested in the emerging markets of Asia-Pacific region and is continuously heavily investing in these regions.
Furthermore HSBC is considering moving its head office from London to Hong Kong. Britain’s greatest bank, warned key shareholders that this was unsatisfying full-year results have made arguments for shifting HSBC’s domicile to Hong Kong “unsatisfying”. The investors have been shocked by the swift gear-change in HSBC’s review of its domicile but some others have already told the HSBC that they would sponsor the move. Some other investors said that they understood the move and that the bank had been a change of tone as HSBC reviews its domicile. UKs capital terms for the main banks, now is one of the greatest in the world and according to the Basel terms, is expected to go even higher. Although HSBC refine to the investors that if the terms in Hong Kong is more relaxed requirements, that can cost less and develop more profit by making it the best use of its balance sheet. The loss of HSBC’s head office in London, despite the fact that abused for months because of the raise in financial arrangements, would be a severe blow to the Coalition which, admitting some of its banker criticism is relying on a private-sector-led recovery. However, HSBC supported that it elects to stay in UK and told that an approaching change in its position was entirely hypothetical.
Government is responsible for protecting the public interest.
Political stability affects business decision.
Regulations of business activities.
Competition for resources.
Work life balance.
Trends in consumer behaviours.
Technological arrange is speeding up.
Technology develops now products (internet).
HSBC banking has been sheltered by the regulations and policies made by different governmentsin the countries where they are working. The company has been able to remain to the policies agreed by each government to make sure that the company will be able to accomplish business operation successfully and effectively.
HSBC Company also formulates their own defence strategies besides any governmental restrictions and limitations.
Being one of the world’s leading and completive businesses in conditions of banking and finance HSBC said to have a secure and successful economic strength. In spite of lots of dangers that they meet in many parts of the world, the management of HSBC make what they need to be able to go beyond such struggles and to have a better economic condition and create a shield against unemployment.
HSBC is being affected by the circumstances of the society in which they are in use. By the side of this HSBC tries harder to make sure that each society is given the same chances to take the benefit of the resources given by the organization. The company adhere to having good name and relations in the society that belong to secure that everything will be customary and under control.
The urgent situation of information technology, internet and generally the improvement of technology effects how HSBC has been working in the past years. The company search for different systems and used internet to get to their costumer all over the world and also help them know the latest trends in the global business. Except from these, the company also uses special facilities which help then to advance their productions and operations and also make them to achieve their goal. Technological breakthroughs can create new industries which might prove a danger to presented organizations.
To summarise PEST analysis looks at the business strategies to understand the environment that the company is working and also to take the advantages and benefits to minimize the threats and the dangers for the business.
Porter’s Five Forces
HSBC has many threats from Tesco, Sainsbury’s and a large number of other markets consider to enter into banking industry as a result of high profits that the specific kind of industry offers. Large super-markets in UK seek to enter without considering that those threats sometimes breakdown organisations such as HSBC. Although, HSBC received several threats from the market, they were still able to create high standards for the competition. Strong branding images are used from HSBC, so the company will not result in loss of customers.
Bargaining power of customers
An organisation created a value which has affected the occupation from one of the two important forces customers’ power. The role of this force contains the customers concentration along with the size. In other words, HSBC managed their customers as a result of allowing the company to gain customer loyalty. The strategy that was used by HSBC allows them to have a chance becoming a world leader in banking industry.
Threat of substitutes:
Another significant threat that HSBC faces is that competitors provide new products and services. This threat gives the opportunity to the company to work hard as a result of being sustain to its position. HSBC’s strategy focuses on the four different customers’ sections.
Bargaining power of suppliers:
Customer power mirrors to supplier power. This force focus on two important points. The first one is the significant size and concentration of suppliers and the second one the differentiation in the materials being supplied. HSBC use the strategy of charging markets with different prices according to differences of the price of each buyer.
Rivalry among current competitors:
There have many rivals in the banking and financial sectors. HSBC used efficient strategies to ensure its leadership position in the market among rivalries. Moreover, due to the capabilities of other rival companies, HSBC develops strategic plans to confirm that they are permanently being the first choice of their customers in banking industries. Nowadays, as we cross the mountain of financial crisis, a number of banks went to liquidation