Hi: Strategic Management Essay

1. beau monde background and purposea. General background of the companionThe HSBC Group is regarded as 1 of the largest pecuniary and banking friendship in the b all in all-shaped grocery store. The Group has around 10,000 onwardices in 83 nations and territories in Asia-Pacific Refion, Europe, United States of America, the Middle eastern United States and Africa and the serves oer 130 million customers with assets of US$ 2,354 billion as of December 2007. The Hong Kong ad Shanghai Banking batch Group was established in 1865 to finance the initiateing trade between China and Europe, and is one of the largest banking and pecuniary operate organizations 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). finished an international network linked by advanced applied science, including a rapidly growing e-commerce capability, H SBC provides a ecumenical range of monetary operate, including personal monetary services, commercial banking incorporated, investment banking and markets, private banking, and other activities (Who is HSBC? 2006). b. Clear purposes of the fortuneHSBC emphasizes the importance of building shargonholders value, and believes in the values and talents of its own employees, which are employed and spread all over the world. HSBC wishes to stick around ahead in a very agonistical world(prenominal) financial market, and by maintaining a great shuffling name, an established customer base, goodish and loyal employees, tight control over run bes and constant adjustment of duty system to cater to customers needs, it maintains its success in its rentership stupefy in Hong Kongs mellowedly competitive banking manufacturing. With this success, this paper studies the strategicalal management of HSBC.2. Industry and general surrounda. General information on labor environment (Five-forces The state of competition in an assiduity depends on five basic competitive forces. With this, Porters 5-Forces Model is exercisingful for understanding the context of theindustry, in which the unwaveringly operates (Porter, 1998). RivalryIn HSBC, this is ca apply by several factors, such(prenominal) as the presence of a larger number of firms that compete for the same customers and resources low switching costs for a consumer can switch from one product to another strategic stakes are high when a follow is losing market position a diversity of rivals with different histories, cultures, and philosophies and industry shakeout. Similarly, HSBC in any case faces this factor since they set about a lot of competitors in the banking and financial industry. In order to gain an advantage the come with has to do some competitive moves. panic of SubstitutesSubstitute products refer to products in other industries (Porter, 1998). The threat to HSBC is the emergence of comp etent rivals that provides the needs of the target market. In accordance to the threat of substitutes in HSBC, HSBC completely manages this factor to attain line of reasoning success. HSBC, in its commitment to customers in the banking and financial industry, demonstrates value and return on investment.Buyer PowerThis refers to the impact that customers realize on a producing industry. In HSBCs customers, buyer power is strong, such that this could provide HSBCs rivals with a strong and streamlined employment. In HSBC environment, the buyer power is the impact that customers yield on a producing industry. As there are still only a few banking and financial industry who can compare to what the social club has managed to compass, the negociate power of buyers is not as great compared to the following epoch, and, coupled with the industry beingness a get wind supplying group for the buyers, which in this grimace, are large companies and several high end individual customers, the negotiate power of buyers have notably not budged.Supplier PowerThe power of suppliers over HSBC is similarly strong, as it also contributes to the decline of the business of the confederacy. Due to the increase of prices in the market, prices of raw materials also increases, therefrom, give specialcosts 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 choke relatively large on plant and equipment. Moreover, competitors in the industry are not likely to visit their price to defend their market position. In an industry experiencing fast market growth, patents, proprietary knowledge, and brand personality are also considered as barriers for companies entering the industry.b. Any opportunities & threats?Opportunities Sustainability reporting requirement by government to companies thus increasing opportunity of banking institutions. -Growth by increasing market deal by dint of mergers and acquisitions within the industry. -Develop new products and services which link to changing peoples needs and services -Incorporate new technologies in production to stay ahead of the competitionThreatsThe following are the threats of the company-Economy due 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 management can be analysed finished the management program that they implement in the latter part of 2003, which is the Managing for Growth programme. Managing Program is a strategic plan that provide s the company with a blueprint for growth and development from 2003 to 2008 ( schema2006). This strategy builds on the companys strengths and addresses the areas where further improvement is considered both desirable and attainable. HSBCs core values are underlying to its strategy, in communicating them to their clients and other stakeholders comprise an emphasis on long-term, high productivity through teamwork, good client relationships, an ambitious and confident sense of excellence, being international in its image, prudence, creativity and customer-oriented marketing HSBC, 2008).In addition, there are conglomerate elements in attaining HSBC objectives, and these involve accelerating the growth rate of revenue, enhancing brand strategy further, underdeveloped productivity, and maintaining the industrys prudent risk management and strong financial advantage. Developing the skills of their employees is also granted emphasis to ensure that all employees understand how they can contribute to the successful achievement of HSBCs objectives (Strategy 2006).b. Any strengths and weaknesses?Strengths ensure corporate responsibility and business ethics therefore customer confidence is high -Highly experienced management and staff available in the market -Growth by increasing market share through diversification of products that supports sustainable 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 money 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 environsa. How do the firms compete/take competitive actions/responses? The company is experiencing different problems with competitors and its standing in the industry is down. just now given the proper use 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 global market. People easily recognise the company and the different products and services that they provide. They can easily debate about the company when banking and financial matters are mentioned. Another strategic entree 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 marketing venues. Moreover, strategic management of the company is its increasing venue of marketing their products and their services. The company is taking steps to ensure that their p roducts and services can reach more 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 come of HSBC is the great range of business speculation they are engaging in. The company is currently engaging not only in banking and financial aspects but in other relevant industry5. Strategic intent and committee/visiona. Purposes of the firmBased on the given case, the strategic intent of HSBC is to become the number one choice 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 intents to be achieved?The finale 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 t o reach more customers all over the globe through their online transactions and website. c. Any formal burster/vision statement?The companys mission statement is to be one of the globes great specialist banking groups that is driven by commitment with their values and philosophies. The company envision to lead in the global market and deliveran excellent client experience based 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 motivate high performance teams and creating challenging, rewarding and convenient environment for their employees. 6. Strategy formulationa. Ask the following questionsi. Business-level strategy In basis of business-level strategy, it is tell that HSBC is keen on expanding their business portfolio to small and medium-sized enterprises which they considered as an essential market segment to HSBC groups. In addition, their bu siness level strategy is to provide value to internal stakeholders of the company such as employees and shareholders. ii. Corporate level strategy HSBC Holdings complied with the correct applicable code provisions of the host field 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. acquisition, joint venture etc To expand their business portfolio, HSBC attempts to acquire various industries in different country. Merging and acquisition to existing industries in a specific nation is the appr oach use by the company to enter the foreign market. In addition, merging and acquisition enables the company to expand their groups and provide more diversified financial products and services.7. Strategy death penaltya. How does the firm implement the chosen strategies?The firm implements their chosen strategies by using an intensive strategic planning. In addition, the firm also implements their chose strategiesthrough their management team and leaders. Accordingly, the presence useful and efficient leadership in todays organization imposes a great responsibility to the organizations team and management networks as leadership implies the overall capacity of the organizations performance like for instance, in terms of trading operations and research development.b. How effective?Based on the given analysis, it can be said that the implementation of the business approach 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 moldiness sojourn to find innovative strategic programs and relate effectively to other companies in the global market. The company must efficiently and effectively create a good relationship with their customers and shareholders, to continually operate. HSBC must continually think and implement strategic management approach to be able to set trends in the banking industry. Aside from maturation 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. K ey current situationsThe 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 globalisation and with the current rate of advancement in technology, there is an increasingly bigger chance of getting the entire firms marketing message through to the targetmarkets with the utilisation effective strategic management. As discussed, the wise 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 innovations are an edge, this is very vital.b. Future of the fi rmIt 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 prudence, Concepts and Cases, 3rd ed. Prentice-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 Theory and Application. Westport, CT Quorum Books. Elkin, P. (1998). Mastering Business Plann ing and Strategy The Power of Strategic Thinking. Knod, E. & Schonberger, R. (2001). Operations Management Meeting Customers Demands. seventh Edition. Boston, MA McGraw-Hill Irwin. Neumann, E. & Sumser, R. 2002, Marketing Communications 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 sustain their competitive position in the global market. Based on the conducted reviewed in the preceding section, it can be said that HSBC strategy includes differentiation approach and innovative approach. 2. The company has been able to have a sustainable focus on their core business values ensuring that thei r 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 forward integration in order to promote and nigh manipulate where all the HSBC products and services are being sold. To improve financial performance, the company sees to it that they utilise all their resources in a manner thatwill be beneficial to enhance the performanc e 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 corroding and losing of their competitive advantage. In order to cope 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 parts of the world.Herein, the management of the company has been able to improve their organization structure its organisational structure to achieve their organisational objectives. In addition, the improved organisational structure is done in order to i nitiate 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 incision 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 cut down cost and market price.Daft (2003) pointed out that in managing a global environment, theater directors 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 the twenty-first century will be the consistent tugging force that the organisation must either strive to drag 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 arrive new umber 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 cracks 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 i s its goal to be recognised and prize 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 leveraging off its excellent branches in different locations. strong brand name and excellent reputation among customers. HSBC has also been proceed 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 values 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 fina ncial needs.With custsomers increasingly willing to switch banking companies because of the wide variety 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 graphic 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.