HSBC CASE

BY GROUP 8

introduction• Founding institution the Hong kong and Shanghai

banking corporation limited • Established in 1865 by Thomas Sutherland• Headquartered in London, 7000 offices in 81

countries, 170,000 employee worldwide, customer base of 32 million

• Ranked 27 by market capitalization in 2001 in financial times global 500

• Won many awards for most admired co, best co and best global bank by various magazines and media publications

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SALIENT FEATURE

• Improvised economies of scale• Better use of resources throughout the group• Maintains the value of local decision making and

local accountability• Matrix organizational structure• Consists of 5 division• Offering services like personal finance, commercial

banking, corporate investment banking and markets and private banking

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OBJECTIVES

• To become the world’s leading financial service organization while balancing earnings from more stable, mature economies and those in more volatile emerging markets

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KEY ISSUES

• Currently HSBC is struggling in the area of private banking

• HSBC continue to focus on becoming customer driven increasing its network and providing product innovation

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KEY PROBLEM AREA

• Problem in managing such a vast network and product offerings

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SWOT ANALYSISStrengthStrong capability in CB, PFS and certain parts of CIBMLarge market share in Hong Kong Economies of scale through various financial servicesHistoric strength in traditional banking

Weakness•Less presence in private banking•Problem in maintaining vast network and product categories

OpportunitiesMore room to grow in in Europe outside the UKKey opportunities lies in Asia specifically china and middle eastOpportunities in Latin America

ThreatService providers hijacking payment system/e systemFast pace of consolidation among peers, using acquisition to enter new regions and business

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BCG MATRIX

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At present HSBC is cashcow and will remain cashcow in future

ANSOFF MODEL

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HSBC is entering in new market with new product so it is diversification And in future it will be same

DREK MODEL

• Niche and unrealized potential in current• In future it will be leader

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POTTER’S MODEL

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THE FIVE FORCES

• The threat of entry of new competitors • The threat of substitute like easy imitable

financial product• The bargaining power of buyers with presence

of numbers of banks• The degree of rivalry between existing

competitors

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CORE-COMPETENCY

• Economies of scale across all financial servies product lines

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COMPETETIVE ADVANTAGE

• Ability to implement a single technology platform across the business

• A pool of capital maintained at group levels to meet unforeseen events around the world

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USP

• Large network with a wide range of financial product offerings

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DIFFERENTIATION

• Product innovation

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CURRENT SCENARIO

• Development of global wealth management• Growing its commercial business• Integration of corporate and investment

banking for large costomers

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PROPOSED SCENARIO

• Product innovation • Growth in market share• Increased global presence • Increase in network and product offerings

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SUGGESTION

• Focus should be on using its strength and revenue generated through high market share products to that of low market share products

• Proper maintenance of wide product range and network

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1. USING THE MODELS ILLUSTRATED IN THE CHAPTER, ANLYSE THE EXTERNAL(MACRO) ENVIRONMENTAL OF HSBC and identify the emerging opportunities and threats that will affect the future investment of HSBC in the UK financial market.

Ans: Macro environment:Growing trade between Europe & China.International trade networkTechnology driven business and banking.Localized based international business.Opportunities of HSBC:More room to grow in in Europe outside the UKKey opportunities lies in Asia specifically china and middle eastOpportunities in Latin AmericaThreats of HSBCService providers hijacking payment system/e systemFast pace of consolidation among peers, using acquisition to enter new regions and business

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.

Current business portfolio: Strong capeability in commercial banking PFs

and certain part of CIFM.Struggles in private banking.Slowing down of growth in HONKONG.Key opportunities in Asia.

Ways to serve in other market segments

New products on country basis to satisfy customer need.

Global brand with local identity.E- business offeringProviding full range of products.

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THANK YOU