Hi: Strategic Management Essay

1. Company background and purposea. General background of the confederationThe HSBC Group is regarded as sensation of the largest m 1tary and banking corporation in the b all in all-shaped commercialise. The Group has around 10,000 offices in 83 nations and territories in Asia-Pacific Refion, Europe, United States of America, the pose East and Africa and the serves everyplace 130 million customers with assets of US$ 2,354 billion as of December 2007. The Hong Kong ad Shanghai Banking Corporation Group was established in 1865 to finance the checking trade between China and Europe, and is one of the largest banking and monetary function makeups in the world.Its international network comprises over 9,500 offices in 76 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East, and Africa (Who is HSBC? 2006). Through an international network linked by advanced technology, including a rapidly growing e-commerce cap talent, HSBC provides a com prehensive grip of monetary services, including personal pecuniary services, commercial banking corporate, investment banking and marts, private banking, and opposite activities (Who is HSBC? 2006). b. Clear purposes of the caseHSBC emphasizes the importance of building sh beholders value, and believes in the value and talents of its induce employees, which be employed and spread all over the world. HSBC wishes to stay onwards in a very agonistic world(prenominal) financial market, and by maintaining a great differentiate trace, an established customer base, good and devoted employees, tight mastery over operating bells and constant readjustment of byplay dodge to cater to customers needfully, it maintains its success in its leadership part in Hong Kongs proudly competitive banking exertion. With this success, this paper studies the strategicalalal steering of HSBC.2. Industry and general environmenta. General information on patience environment (Five-forc es The state of competition in an industriousness depends on 5 basic competitive forces. With this, Porters 5-Forces Model is practiceful for sagacity the context of theindustry, in which the incorruptible operates (Porter, 1998). RivalryIn HSBC, this is ca utilizationd by several(prenominal) factors, such as the presence of a larger estimate of wholes that make do for the same customers and resources low projecting costs for a consumer drive out switch from one product to an different strategic stakes ar game when a attach to is losing market position a diversity of rivals with antithetical histories, cultures, and philosophies and industry shakeout. Similarly, HSBC besides faces this factor since they be possessed of a lot of competitors in the banking and financial industry. In tramp to gain an good the telephoner has to do some competitive moves.Threat of SubstitutesSubstitute products refer to products in some other industries (Porter, 1998). The threat to HS BC is the emergence of competent rivals that provides the needs of the grade market. In concord to the threat of substitutes in HSBC, HSBC completely manages this factor to attain business success. HSBC, in its commitment to customers in the banking and financial industry, demonstrates value and save on investment. vendee PowerThis refers to the impact that customers have on a producing industry. In HSBCs customers, buyer ability is knock-down(prenominal), such that this could provide HSBCs rivals with a strong and efficient business. In HSBC environment, the buyer power is the impact that customers have on a producing industry. As there are still only a few banking and financial industry who eject compare to what the familiarity has managed to achieve, the negotiate power of buyers is not as great compared to the following epoch, and, coupled with the industry world a key supplying group for the buyers, which in this case, are large companies and several high end individu al customers, the bargaining power of buyers have notably not budged.Supplier PowerThe power of suppliers over HSBC is also strong, as it also contributes to the decline of the business of the company. Due to the growing of prices in the market, prices of raw materials also increases, thus, give additionalcosts for the company. In this regard, some of HSBCs suppliers of banking and financial industry components can possibly control their business operation.Barriers or Threat to EntryThe economies of scale play a significant role in the cost of produce the product and service. Companies in the banking and financial industry have competitive fixed costs and top relatively large on deviset and equipment. Moreover, competitors in the industry are not likely to cut their price to defend their market position. In an industry experiencing fast market growth, patents, proprietary knowledge, and brand reputation are also considered as barriers for companies debut the industry.b. every op portunities & threats?Opportunities Sustainability reporting requirement by disposal to companies thus increasing opportunity of banking institutions. -Growth by increasing market share by means of mergers and sciences within the industry. -Develop new products and services which link to changing peoples needs and services -Incorporate new technologies in performance to stay ahead of the competitionThreatsThe following are the threats of the company-Economy ascrib competent to Expensive borrowing-Expansion, Mergers and Acquisitions of HSBC may lead to failure-Competition other major companies entering the market could affect their revenue-Rules and Regulations of different countries3. Internal activitiesa. What are primary & support activities within the firm? In HSBC, their strategic concern can be analysed finished the concern program that they implement in the latter part of 2003, which is the Managing for Growth programme. Managing Program is a strategic project tha t provides the company with a blueprint for growth and development from 2003 to 2008 ( scheme2006). This schema builds on the companys strengths and addresses the areas where further improvement is considered both preferred and attaincapable. HSBCs core set are integral to its dodging, in communicating them to their clients and other stakeholders comprise an emphasis on long-term, high productivity by means of teamwork, ethical client relationships, an ambitious and confident sense of excellence, being international in its image, prudence, creativity and customer-oriented merchandising HSBC, 2008).In addition, there are mingled elements in attaining HSBC objectives, and these involve accelerating the growth rate of revenue, enhancing brand scheme further, develop productivity, and maintaining the industrys prudent risk direction and strong financial advantage. Developing the skills of their employees is also given emphasis to en accepted that all employees witness how they can contribute to the successful transaction of HSBCs objectives (Strategy 2006).b. Any strengths and weaknesses?Strengths ensure corporate responsibility and business ethics therefore customer confidence is high -Highly experienced centering and staff available in the market -Growth by increasing market share by means of diversification of products that supports patronageable development -Able to promote several products and services that meet the needs of the customersWeaknesses-Barriers to working out due to environmental regulations by governments-Licensing problems-Highly competitive market-Raising property from banks rather than shareholders.Banking and financial products and services have become an important industry player by investing in diversified products and services,4. Competitive milieua. How do the firms compete/take competitive actions/responses? The company is experiencing different problems with competitors and its stand up in the industry is down. But given the proper use of goods and services of their strategic management they have, the company are able to stay in the competitive market. The company has competitive advantage over banking and financialindustries. One of the aspects of strategic management of HSBC is its brand name. The competitors i The company is known as one of the established baking and financial industry in the planetary market. quite a little tardily recognise the company and the different products and services that they provide. They can easily think about the company when banking and financial matters are mentioned. Another strategic fire of the company is its image with the clients. The company is known as a banking industry that provides excellent service to the clients.This can be proven by the frequency of visit clients do to the companys branches and other merchandising venues. Moreover, strategic management of the company is its increasing venue of merchandising their products and their service s. The company is taking steps to ensure that their products and services can reach more(prenominal) people at more locations, hence company engaged in having more branches at different places. The company also made use of the internet and created a website that more people in the world can use to transact with the company. Lastly, a strategic burn down of HSBC is the wide kitchen range of business venture they are attractive in. The company is currently engaging not only in banking and financial aspects but in other relevant industry5. strategic tar take up and mission/visiona. Purposes of the firm base on the given case, the strategic cloaked of HSBC is to become the number one quality of the customers for the banking and financial services needs. The company products and services have been made to provide more convenience for customers.b. What livelinessions to be achieved?The goal of the company is to provide quality banking and financial products to their target market while providing values to their employees, management and shareholders. Their goal is to reach more customers all over the land through their online transactions and website. c. Any formal mission/vision description?The companys mission statement is to be one of the worldly concerns great specialist banking groups that is driven by commitment with their values and philosophies. The company envision to lead in the global market and showan excellent client experience base on their outstanding sales, services and solutions. In addition, the company aims on achieving superior, long-term and ethically based return for their shareholders and building highly motivated high performance teams and creating challenging, rewarding and expedient environment for their employees. 6. Strategy formulationa. Ask the following questionsi. Business- take aim strategy In terms of business-level strategy, it is verbalize that HSBC is keen on broadening their business portfolio to small and mediu m-sized enterprises which they considered as an essential market segment to HSBC groups. In addition, their business level strategy is to provide value to internal stakeholders of the company such as employees and shareholders. ii. incorporate level strategy HSBC Holdings complied with the entire applicable code provisions of the host country regulations on their corporate governments. In terms of corporate level strategy, the management see to it that they adhere to their corporate responsibility to the community and that they are able to adhere to their corporate governance policies.iii. Cooperative strategy In terms of cooperative approach, it can be said that the entire management have a good relation with shareholders and their customers. They also cooperate with government institutions to ensure that they always adhere to the needs and demands of their clients. iv. Others i.e. accomplishment, joint venture etc To fatten up their business portfolio, HSBC attempts to acquire mixed industries in different country. Merging and acquisition to existent industries in a specific nation is the approach use by the company to enter the foreign market. In addition, merging and acquisition enables the company to hyperbolize their groups and provide more diversified financial products and services.7. Strategy implementationa. How does the firm implement the chosen strategies?The firm implements their chosen strategies by using an intensive strategic intend. In addition, the firm also implements their chose strategiesthrough their management team and leaders. Accordingly, the presence effective and efficient leadership in todays organization imposes a great responsibility to the organizations team and management networks as leadership implies the overall faculty of the organizations performance like for instance, in terms of operations and research development.b. How effective?Based on the given analysis, it can be said that the implementation of the business ap proach of HSBC has been effective because of its strong competitive advantage and position in the marketplace today. The use of strategic planning helps them to monitor their strategic implementation. c. Evaluation of action plans/tactics (key actions)The action plan of the company has been able to lead them in having competitive advantage in the global market. With this information, the company essential continue to regain innovative strategic programs and relate effectively to other companies in the global market. The company must(prenominal) efficiently and effectively create a good relationship with their customers and shareholders, to continually operate. HSBC must continually conceptualize and implement strategic management approach to be able to set trends in the banking industry. Aside from developing marketing strategies, the company must focus on building employee and customer relationships, in accordance to strategic marketing concepts, for it is essential to determine and focus on the needs of the customers, as customers are the reason for being alive in the business and marketing industry.8. Summarya. Key current itemsThe current situation of the banking industry can be considered to be impacted by the growing issues in the global market, such as the sub-prime crisis. The global presence of an organisation, in this case, the HSBC Bank, has been due to the strategic management and business approaches of the company. It is important to note that with globalization and with the current rate of advancement in technology, there is an increasingly large chance of getting the entire firms marketing cognitive content through to the targetmarkets with the utilisation effective strategic management. As discussed, the wise to(p) use of a strategic management as well as information technology could either attract or lose existing and potential customers. The strategic marketing and management approach of the firm, therefore, need to be consistent with what was preset as marketing objective of the firm and in an industry as provision where constructs are an edge, this is very vital.b. Future of the firmIt can be said that the global market provides opportunities for the baking industries to develop relationships with their stakeholders it has been found that the number of competitive moves increased as issues and problems in the global market arise. It becomes more important to manage relationships as competition increases through the use of e-commerce. It can be stated that the most effective strategy for HSBC can use in the future is a collaborative one with their channel partners. In addition, another future strategy of the company is to use integrated marketing communication to reach more clients in the global market.ReferenceDavid, F.R. (1999). Strategic Management, Concepts and Cases, 3rd ed. assimilator-Hall, Inc. David, F.R. (2001). Strategic Management Concepts and Cases. 8th ed. Prentice Hall, Inc Upper Saddle River, NJ Drejer, A. (2002). Strategic Management and Core Competencies surmise and Application. Westport, CT Quorum Books. Elkin, P. (1998). Mastering Business Planning and Strategy The Power of Strategic Thinking. Knod, E. & Schonberger, R. (2001). Operations Management Meeting Customers Demands. 7th Edition. Boston, MA McGraw-Hill Irwin. Neumann, E. & Sumser, R. 2002, Marketing communication theory A Vital Element of Achieving Change. The Public Manager, 31 (4), 9+. Proctor, T 2000, Strategic MarketingCase Questions1. What is the firms competitive strategy?1. In accordance with the case study to the business approach and strategies of HSBC it can be said that the company has been able to continue to grow and expand their business in the global market. It can be said that HSBC has been able to use various strategies which enable them to engender their competitive position in the global market. Based on the acquited reviewed in the previous section, it can be said that HSBC strategy complicates differentiation approach and innovative approach. 2. The company has been able to have a sustainable focus on their core business values ensuring that their goals, objectives and mission are achieved. In addition, the company has been able to sustain good relationship with its target market and all other stakeholders and the company focuses itself on satisfying the costumers by providing them quality products and services in the online. The ability of the management to manage their financial resources and limit their expenses to sustain their needs for expansion has also been considered as one of the capabilities that sustain their competitive advantage. The strategies used by the HSBC include Intensive strategy, which aims to competently position and promote their products and services in the global market.The industry has also utilized the Integration strategy and transport integration in order to promote and closely manipulate where all the HSBC products and services are being sold. To improve financial performance, the company sees to it that they apply all their resources in a manner thatwill be salutary to enhance the performance of the company. 3. Based on the given case, it can be said that the two resources and capabilities of HSBC includes their flexibility and innovation strategy. It can be said that the ability of the company to expand their business is through their flexibility and innovation which enable HSBC to counter the risks of erosion and losing of their competitive advantage. In order to eff with the various influences and effects of market environment changes, and to sustain their competitive advantage, the management of HSBC has been able to improve and expand its organisation so as to conduct business operations and activities on a global scale which include the expansion of HSBC through the online presence of the brand in different split of the world.Herein, the management of the company has been able to improve their organization bodily structure its organisational structure to achieve their organisational objectives. In addition, the improved organisational structure is done in order to initiate speedy and flexible measures in managing their internationally diverse employees. 4. The management of HSBC has also been able to focus on their research and development discussion section and to initiate innovative strategies designed to provide a competitive advantage and edge in the marketplace. As business gravitates towards a global scale, entrepreneurs find themselves faced with the challenge of producing new and better products at reduced cost and market price.Daft (2003) pointed out that in managing a global environment, managers of HSBC must be characterised by the ability to bring about change through innovation and creativity. Further according to Daft, a revolutionised manager sees change, rather than stability, as the nature of things (2003). Innovation as a ground for doing business in t he 21st century will be the consistent tugging force that the organisation must either strive to adopt or suffer the consequences of being left behind by competitors. In addition diversification approach is also considered by HSBC to ensure having sustainable competitive advantage. Part of the diversification is to generate new coffee products that would meet the needs of the consumers in various parts of the world2. What is the Strategic intent of the company?1. HSBC strategic intent is to provide more options for their clientsby partnering with other international and local banking and financial industries. The company also diversified their flings to different products, services, categories and other physical assets. Furthermore, based on the given case, the companys strategic intent is to sustain their competitive advantage by compelling what the needs and demands of their target market and expanding their business portfolio in the global market. The companys strategic intent is to do their business in a slow but sure manner by becoming innovative in what they are offering for the customers. 2. Another strategic intent of HSBC based in case is its goal to be recognised and respected as a global banking and financial institution and brand and to dominate the global market through their high quality product and service offerings. As discussed in the case study, the strategic management of HSBC have been focusing on how the products would gain interest from their target market and how they can be able to generate sales with their products.This is HSBCs stronghold where it continues to yield strong sales revenue by leverage off its excellent branches in different locations. strong brand name and excellent reputation among customers. HSBC has also been continuing to create affiliate websites to expand their business market among various consumers. 3. Another strategic intent is with regards to the achievement of their mission and vision by giving priority and v alues to their shareholders and customers. Based in the case, HSBC is committed to their mission of being the number one choice of the customers in their banking and financial needs.With custsomers increasingly willing to switch banking companies because of the wide manikin of choice available, it is of paramount importance that the company would stick to their strategic intent and used effective approach o promote excellent marketing strategies. Its importance as possibly a bank interface could also be exploited by the industry. Since the homepage is the first thing that the users saw upon entering the website, it also was the most critical aspect on the site, where the customer should get an idea of what the site is an about and where to go within the site. All the in writing(p) elements noticeable in most all of the reviewed websites apparently serve a purposeto solidify the direct relationship between the customer and the brand and to make use of the visual attraction vital to clients decisions.