Paper Example on HSBC Holdings Strategic Plan

Introduction

The strategic management is a tool that is used by an organization with the aim of setting priorities, managing the available resources and strengthening its operations to makes sure that the resources are optimally utilized. It makes sure that all the stakeholders interested in the affairs of business work towards the achievement of common goals and they do make agreements around the same outcomes. An effective plan assists the management in handling the various business processes and understand if the activities implemented are triggering change growth and improvements in business. HSBC Holdings is a multinational banking company that has its headquarters in the United Kingdom, it is the biggest in Europe and 7th largest globally in the banking industry. It mainly operates in the wealth management, global banking, and private segments, retail and commercial banking sectors. This paper will involve the process of underlining and developing a strategic plan for this financial institution. There will be the application of a strategic analysis model and in particular, the determination of strengths, weaknesses, opportunities, and weaknesses (SWOT) that the firm faces in the market. It can be noted that the objectives and goals of the firm rely heavily on the idea of capitalizing on its strengths to widen its operations, managing its areas of weakens to limit the volume of losses. The management works towards finding opportunities and controlling the threats that can reduce its ability to expand and run its operations effectively. The senior officers have a corporate strategy that they want to implement to ensure that the threat and opportunities outside the business are matched with the weakness and internal strategy enjoyed by the firm to ensure that there is the maximization of the available resources. HSBC Holding must ensure that it has a competitive advantage in the market that will provide it with a wide market for the banking services to remain relevant in the market. The results will be improved sales, earnings and the number of served customers.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Order now

Situational Analysis

SWOT strategy analysis model involves determining the strengths that give a business powers that enable it to become effective in the market. It also determines the areas of weakness that reduce the capability of a business to realize its potential and the opportunities that it can implement to improve the business activities. Additionally, there exist threats to the organization's activities that can lead to its collapse if they are not managed in the right manner.

Strengths

HSBC Holdings is one of the leading companies in the banking sector, and it enjoys various strengths that enable it to thrive in the banking sector which is highly competitive and risky. They help it to manage the existing market and penetrate other regions, and one of these is the high level of satisfaction regarding the handling of the clients. The customer relationship department is highly active, and the workers are dedicated towards professionally handling their clients. Any adverse issue that may arise is handled in the right manner leaving the customers happy with the quality of services they receive. Their banking services are geared towards ensuring that all the customers in the market can operate with the institution for they do offer different services ranging from private to global banking system. The bank has created good brand equity in the market leading to a high number of loyal customers continuing to interact with the firm.

The installation of the latest technological systems has given the bank an upper hand on the issue of handling the customers. The automation of activities has led to the improvements in the quality of services that the entity is offering providing the bank with the opportunity to scale down and up based on the market demand conditions that are prevailing at a given moment (Gong, 2013). The latest technological tools mean that the customers are protected from cases of account hacking and their details are not accessed by unauthorized personnel, and this issue makes the institution attractive to a significant number of clients in the market.

Whenever HSBC Holdings enters a market, it has been known to operate effectively meaning that the chances of being successful are high. Therefore, the levels of faith the consumers have in this institution are high leading to the customer base to continue rising. This has given it the capability to attract potential clients and keep the existing ones. The bank has thus managed to build new avenues for raising funds that they use to either expand or distribute to its stakeholders in the form of dividends. Markets present different challenges to a company meaning that if HSBC Holding is operating in several countries, it will manage to diversify its investments and reduce the number of risks that can affect its business activities. Organization in the market must work together to be successful especially the ones that sell complimentary goods. Some firms rely on this bank's product to reach their customers, and HSBC Holdings has thus built a strong dealership with them and the distributors in the market, and they do promote the entities products leading to the volume of the HSBC Holdings products sold to rise.

VRIO framework stands for Value, Rarity, Imitation, and Organization. Through the use of the VRIO framework, it can be noted that the bank manages to offer resources that add value to the consumers, it manages to control the scare resources by ensuring that they are used optimally. The easiness of finding substitutes for the services that the bank is offering means that it has to remain on the forefront in raising the quality of service to beat off competition. The presence of organized management system means that it manages to capitalize on the available resources.

Weakness

The external environment of a business can be determined by using the PEST analysis which involves looking at the Political, economic, social and technological factors. The weaknesses are the areas that the bank needs to improve to ensure that it is operating to its potential. The strategy and procedures involve selecting the viable move out of several and, therefore, the SWOT analysis will be critical in ensuring that the right procedure is selected and implemented. One of the areas that the organization has been struggling to improve its activities is the planning of its finances which is not done efficiently. When the procedure is not being implemented optimally, it means that the company has funds that may be lying idle rather than being invested to earn the firm some returns. At the same time, the resources that are being utilized in the company may fail to be used in the right way meaning that some returns are not trickling back to the entity. The earnings being made are less than the bank's capacity. The liquid assets and current ratio for the latest financial year show that HSBC Holding can utilize its cash more efficiently than it is being used in the current situation. The marketing procedures of the various products that it provides are not the best, and they have led to the organization failing to realize its potential. The positioning of the products in the market is not adequate, and the unique selling proposition that the organization claims to use is not defined clearly. Therefore, the competitors in the market can use these issue to attack the company leading to the loss of customers. The attrition rate among the staff members is high when HSBC Holdings performance is compared to that of other firms in the market. It thus turns to the use of a lot of funds in the workers training and development process. Forecasting is crucial in facilities like the production of goods and services for it enables an organization to have an estimation of the commodities that may be demanded in the market in the future. Additionally, it enables a firm to have an idea of the possible performance of the market thus ensuring that the right amount of commodities are manufactured for the market. HSBC Holdings is poor in making these forecasts meaning that it ends up making losses through missed deadlines or provision of excel commodities when the demand is low or provision of fewer goods when the demand is high. The firms end up keeping a lot of inventory in-channel and in-house. Despite the move to adopt the latest technology, the organization is yet to install the latest technological tools in all the sectors fully, and it has just managed to handle the sensitive section of the firm. The bank is planning on expanding to new geographies, and there is a great need to ensure that the systems in all the subsidiaries are integrated to facilitate efficient operations and sharing of information.

Opportunities - External Business and Strategies Factors

The bank has the chance to adopt the process of differentiated pricing strategy through the utilization of the latest technology. The process will enable the firm to maintain loyal clients through the provision of efficient services and even lure new ones with the utilization of the value-oriented proposition. The development process will facilitate the dilution of the advances enjoyed by the rival businesses and enable the bank to remain relevant in the marketplace. The optimization of recourses includes reducing the costs of business operations to ensure that the final goods are selling at low prices in comparison to what the rivals are selling their commodities. Therefore, for HSBC Holdings, the reduction in transport costs through low shipping costs can be the catalyst behind the increases selling of the firm's products since they will be selling at low prices in the market. The fees charged on the banking services can reduce, and the profitability of the firm will raise with all the stakeholders in the business getting to enjoy the benefits. The introduction of new environmental policies by the government and other regulatory bodies is an opportunity that the management of this bank can undertake since they will provide a level playing field for all the financial institutions ensuring that there is no particular entity with an undue advantage over the others (Speth & Probert, 2015). When the procedures are introduced, HSBC Holding should utilize their advantages to gain a wider market base for its goods and services. The firm is a multinational entity, and it operates in different markets, and since the economies of various countries are not the same, the firm should take advantage of the economies with low rates of inflations for the markets are stable in those regions. The firm should advance a large amount of loans to its customers at low rates of interest since the loans will be attractive to the investors in the market. If HSBC Holding manages to undertake the opportunities that are available in the market, then it will stand a great chance of being a market leader globally.

Threats

Various issues in the market possess a threat to the operations of the multinational firm and if they are not managed in the right way, they may cause the firm to operate in losses, or even worse to go into bankruptcy. Intense competition in the market due to a large number of organizations offering the financial services is one of the factors that can lead a firm to incur huge losses as it finds it hard to market its commodities. The stability in the world economy has increased the number of banks and this has placed a lot of pressure on the existing entities, their profitability and sales volume. The highly profitable products are only demanded on a seasonal basis meaning that if there is the occurrence of an unlikely event during the high season, then the business will suffer from the in...