Business Strategy of HSBC Holdings

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Contents
Introduction......................................................................................................................................3
PESTLE examination of HSBC Holdings...................................................................................3
Political Factors.......................................................................................................................3
Economic Factor:.....................................................................................................................3
Social Factor............................................................................................................................4
Technological Factor...............................................................................................................4
Legal Factor:............................................................................................................................4
Environmental Factor..............................................................................................................4
LO3: (Task 3)..................................................................................................................................5
P3: Applying Porter’s Five Forces model evaluate the competitive forces of a given market
sector for an organization............................................................................................................5
Five forces analysis of HSBC Holdings PLC:.........................................................................5
Conclusion.......................................................................................................................................6
Reference.........................................................................................................................................6

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Introduction
The author is going to find some reason regarding business strategy through this report. So, the
report will focus on several of the strategic plans regarding the case scenario of HSBC Holdings.
It is considered as the biggest banking company in the world. For different issues, the company
sometime gets affected by some components. External issues of the organization can be detected
regarding the PESTLE analysis because it is considered as the best structure.

PESTLE examination of HSBC Holdings

To identify the company’s probable external issues PESTLE analysis is considered as an
important factor for any organization (Thomas Del Marmol, Feys and Probert, 2015). Anyone
can detect the problem by following this analysis and take the necessary steps to solve the
problems. The analysis helps to give an overall scenario of the organization. In below we will
discuss the PESTLE analysis regarding HSBC Holdings:

Political Factors
HSBC is known as one of the great banking related organizations around this world, in spite of
the fact that it has been confronting numerous political issues throughout the previous ten years.
In around 2012, it confronted for money laundering issue and its administrative body faced cross
multiplication and furthermore were accused of in excess of billion dollars as it was
demonstrated liable (Cukierman, Zvi Hercowitz, and Leiderman, 2012). Moreover, they are
facing an issue in their very own area UK because of the BREXIT. However, they must
overcome this unrest situation and achieve the targeted goal.

Economic Factor:
The economic fact of this organization is considered the best of all organizations in the world
(Minabe, 2013). Many organizations in the world related to both financial and economic failure
to achieve the goal but HSBC is not one of them. As a result they easily operate their
organization very well with both economic and financial issues and achieve their goal.

Social Factor
The HSBC organization works for a social issue. To be more particular, they are involved with
social activity by giving stipends to brilliant students who are actually come from poor families.
It helps them to involve in sustainable development which is considered as social factor. This is
fantastic charitable task and they achieved it by this work.

Technological Factor
The HSBC used high technology regarding their services. Their competitors yet cannot bite their
services. They attract more customers only for using high technology regarding their services.
Every branch of this organization both inside and outside of the country use technology to keep

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updated from all of the organization. The most amazing technology they introduce is that
customers can get their service from home.

Legal Factor:
The most significant organization HSBC is only because of maintains the legal issues perfectly.
So, they are eligible to operate their banking system in any country (Wiesner and Glaskowsky,
2015)

Environmental Factor
HSBC is considered as a brand that is working throughout the world. The organization faces
various issues in various nations. Moreover, it's a banking organization and it has nothing
genuine to do with nature yet because of different ecological laws, this component puts an
incredible effect on the bank. However, these days it's seen that HSBC is working with different
social programs by using the environment which signifies as a positive work for the
environment.

Figure 1 PESTLE ANALYSIS Source :(Thomas Del Marmol, Feys and Probert, 2015)

From the above discussion, we may state that HSBC is considering as the brand and working
throughout the world. Moreover, they face some problems but successfully overcome the
obstacles and achieved their targets. So, they are really a prestigious and worthy organization.

LO3: (Task 3)
P3: Applying Porter’s Five Forces model evaluate the competitive forces of a given
market sector for an organization
The theory of the Five forces is utilized to discover the competitor who is not contributing as
positive factor for the existing company. This enables an organization to comprehend the

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weakness and strengths of its own. The administration of HSBC PLC may apply this model to
think about how the competitor increases their profit by using it, also the theory helps them to
update their way of a strategy of increasing the profit (Thomas Del Marmol, Feys and
Probert,2015).

Five forces analysis of HSBC Holdings PLC:

Figure 2 Poter’s Five forces Sources (Thomas Del Marmol, Feys and Probert,2015)

The Threat of New Entrants

As we already know this company is considered a brand of banking and financial organization
throughout the world. As a result, they might face any obstacles from the internal organization
related to same task in any country of the world (Baltzan, 2012). So, they have to give extra
services to grab the attention of their customers. It might not affect their cost but they should
spend well in developing their service continuously.

The Bargaining Power of Suppliers:

The suppliers are very important regarding raw materials and HSBC as the banking sector fully
depends on them. Suppose, the suppliers are more dominant than the organization, it might be
affecting a bad impact on the organization and their finance department. They might face a huge
loss regarding this issue. So, the HSBC must focus on this issue to update its supply chain by
dealing with several suppliers. They might also find some other choice for getting raw materials
so that they cannot depend on a particular supplier.

Bargaining Power of Buyers

Clients always try to find the best benefits at the very least cost. So to get the premium service at
a low value, it might be hard sometimes due to economies of scale. However, the client base is
small but powerful might give them no choice but to work under the customer. To keep this from

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occurring, HSBC ought to make an enormous number of purchasers which will lessen the
dealing capacity of the clients. Moreover, HSBC ought to routinely develop new ideas and
services to diminish the bargaining capacity of clients.

Threats from alternate options of goods

The HSBC must focus on their services and have to give quality products to their customer. If
they cannot provide the best service and take high prices it might affect their business. So, they
have to focus on their customer demands (Opportunities and Threats for Goods’ Flow Concept
Development, 2017).

Rivalry among existing businesses

HSBC is an international organization that might face rivalry from its opponents. They must
provide unique service for avoiding this rivalry from their opponents. They should develop their
services so that it will help to reduce their costs which will be helpful for working together with
their opponents (Rothkopf, 2012).

Conclusion
Finally, we discussed some key factors of business strategy regarding HSBC holdings. We knew
about the PESTLE analysis and after that, we discussed the five forces from the above report.

Reference
 Baltzan, P. (2012). Business-driven information systems. New York: Mcgraw-Hill Irwin.
 Cukierman, A., Zvi Hercowitz and Leiderman, L. (2012). Political economy, growth, and
business cycles. Cambridge, Mass.: MIT Press.
 Minabe, N. (2013). Factor market distortions, factor intensities, and economic
welfare. European Economic Review, 6(4), pp.397–410.
 Moore, H.E. (2013). Five Theoretical Contributions. Social Forces, 15(4), pp.570–575.
 Opportunities and Threats for Goods’ Flow Concept Development. (2017). International
Journal of Humanities, Arts and Social Sciences, 3(4).
 Rothkopf, D.J. (2012). Power, Inc. : the epic rivalry between big business and
government--and the reckoning that lies ahead. New York: Farrar, Straus, And Giroux.
 Thomas Del Marmol, Feys, B. and Probert, C. (2015). PESTLE analysis. Place Of
Publication Not Identified: 50Minutes.
 Wiesner, D.A. and Glaskowsky, N.A. (2015). Managing the legal factor : business law
text and cases. Cincinnati, Ohio: College Division, South-Western Pub. Co.