International marketing strategy of HSBCc holdings plc

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Introduction:

In this particular report, HSBC Holdings plc is presented. The group carried out the research where the required information was found out. There were only three members in a group: Anna Pavelikina (a team leader), Bhavin Chauhan and Mahanth Reddy. As everyone knows the banking industry is the most competitive one and it was tried to present the best of it on the example of HSBC Holdings plc.

Individual report:

It is better to start with the identification of the company. HSBC Holdings plc stands for the Hong Kong and Shanghai Banking Corporation Limited and it is known as one of the world's biggest banking and financial services organization (bank.org.uk) [online].

The history of HSBC goes back to nearly 150 years. Well, in 1860s in the business communities of the China cost businessmen needed larger and more sophisticated facilities. Particularly in Hong Kong, specialists in banking industry were required. On 3 March 1865, the founding of the bank by a Scotsman Thomas Sutherland answered this need (hsbc.com) [online]. In 1874, HSBC handled China's first loan, thereafter issuing most public loans. After that the business was growing and was very important to Hong Kong that many consumers hold their entire pension in HSBC shares. (Thomas L. Jr. and Werdiger.J., 2009) [online] Until the mid 1950's - the company expanded primarily through already established offices in the banks and then it began to create or acquire subsidiaries. Later on, in 1991 there was the formation of HSBC Holdings plc. It was created a holding company for the entire Group with its shares quoted particularly in London and Hong Kong and it was very vital for its future development. (hsbc.com/1/PA) [online].

HSBC holdings were incorporated in England in 1993 with its head office based in London. The company established its international brand name "The world's local bank" with the Group's corporate hexagon symbol in 1999 which helped to be familiar all across the world. In February 2010 which means at the moment HSBC returns to its roots in Hong Kong. For the whole history of 155 years, HSBC's focus was less on Asia and more on expanding into Europe and the United States but it was noticed that the emerging market growth accelerates in Q4 of 2009 to the strongest reading since late 2007. The overall output index rose to 56.1 in 3Q and a year ago it was 43.8. The part of the secrets of the emerging markets success is the increasing role of China in the world's economy. HSBC now expects GDP in China to expand at a 9.5% rate in 2010 after an 8.5% gain in 2009. And still China continues to offer labour for the lowest cost in the world. In the emerging world it should not be forgotten about the biggest concern which is the inflation's impact on the distribution of income, with the poorest people in the society who are suffering the most. (hsbc.com) [online].

It can be said that huge subprime losses in the United States were one of the reasons for HSBC to return its focus to Asia. As a result it is looking forward to benefit from rapid growth in China and other emerging markets. According to Christopher White, a fund manager at Threadneedle in London, "The centre of gravity has shifted significantly towards Asia." And "It's been a quantum shift and Michael F. Geoghegan (chief executive) moving over to Hong Kong is a statement of that" (Thomas L. Jr. and Werdiger J., 2009).

At the moment HSBC's international network comprises over 8,000 offices in 86 countries and territories or basically all over the world starting from Asia, Middle East, Europe and finishing in North and Latin America. It employs over 300, 000 people, across different countries and territories. Its shares are held by around 220,000 people and traded in the world's famous stock exchanges, such as London, Paris, New York, and Bermuda. HSBC Holdings together with its subsidiaries are concentrated in providing four key businesses, they are:

* Personal Financial Services which provide a full range of personal finance services, including current and savings accounts, mortgages, insurance, loans, credit cards, pensions, and investment services. It is one of the world's top ten issuers of credit cards and it has over 100 million personal consumers' worldwide

* Commercial Banking which is a leading provider of financial services to small, medium-sized and middle market enterprises. It has over two million customers like sole proprietors, partnerships, clubs, and associations, incorporated businesses and publicly quoted companies.

* Private Banking is one of the world's top private banking businesses where there are 90,000 customers. It's about providing the personal one-to-one service that is essential after a certain level of wealth for individuals and families in 70 different locations (hsbcprivatebank.com/aboutus) [online].

* Global Banking and Markets where for 4,000 international customers an individual approach is used to meet their financial needs. (hsbcnet.com/solutions) [online]. Global Banking involves services such as treasury and capital markets, transaction banking, strategic advisory and investment management and the origination and ongoing management of the credit and lending product (hsbcnet.com/investment) [online]. Global Markets where customers access to both onshore and offshore markets is offered. They also specialise in foreign exchange, credits and rates, structured derivatives, equities and debt, equity and equity-linked capital markets, and comprehensive global, regional and domestic securities services (hsbcnet. com/treasury) [online].

Despite its longstanding presence, HSBC is still far from being the leading bank in the world. According to Fortune 500 Global HSBC ranked 21st last year, down from 20th 2008 (Table 1).

Rank 2008

Rank 2009

Company

Revenues

($millions)

Profits

($millions)

Number of employees

7

8

226,577

-1,067

125,285

19

16

161,269

-4,868

28,099

20

21

(Hong Kong)

142,049

5,728

331,458

21

24

BNP Paribas (France)

136,096

4,422

154,069

Table 1. Annual Ranking of the world's largest corporations (money.cnn.com) [online].

HSBC is the only bank who has made profit but it was decided to mention another bank as a competitor to HSBC who has made profit is BNP Paribas. Generally speaking, HSBC differentiates from its competitors by the unique characteristics of its brand known as "The world's local bank" (hsbc.com/assets) [online].

Now, let us look at the SWOT analysis.

Strengths of HSBC:

- One of the world's leading and most diversified banks

- The company commands a competitive advantage over its competitors in consumer finance area

- One of the major tools is the company's use of information technology. Its e-business channels include the internet, PC banking, interactive TV, and telephone banking. It maintains its own private network (intranet and extranet) or known as GLT (Global Technology Centre), in which HSBC's websites attracted 900 million visits in 2004

Weaknesses:

- The company lacks the scale to compete with large players in its markets

- The company has not been able to generate consistent cash flow from its operators

Opportunities:

- Growth prospects for the global banking industry

- The company's consumer lending business is one of the largest subprime home equity originators in the US

Threats:

- The consumer financial services industry is highly competitive

- Increase of fraud activities during the boom of e-commerce (hsbc.com) [online].

Well, HSBC is on the right way and they are doing the job very good, as it can be seen from the table above. The group strategy of HSBC is aligned with their key trends.

* Developing markets are growing faster than mature economies

* World trade expanding at a greater rate than gross domestic product

* Life expectancy increasing around the world (Flint D., 2009) [online].

The slogan "strength, diversity and resilience" which is used by HSBC helps to describe the part of their strategy as well (hsbc.com/assets) [online]. The strategy of HSBC continues to position Group well for long term growth and attractive returns. They are moving CEO's principal office to Hong Kong; focusing in organic but positioned for inorganic if aligned with the strategy; continuing to strengthen their position in as the world's leading bank and concentrating more on emerging markets and faster growing businesses. (Flint D., 2009) [online].

Conclusion:

To conclude the report, the phrase of Group Financial Director, Douglas Flint will be cited as the following: "The differentiator of HSBC to other banks is not just that it is big in some emerging markets, it is that it connects those markets to each other and the rest of the world" (Flint D., 2009) [online].

Also, it is necessary to mention that HSBC today takes a leading position in the world of banking and finance industries with an international network that spans six continents. It has a very distinctive history and experience which enable it to meet the challenges of the rapidly changing business environment of the 21st century. And the phrase which is loved by many people: "HSBC has travelled a long way since its beginnings in 1865 - from a small local bank to the world's local bank" (hsbc.com/1/PA) [online].

Recommendations:

In this part it would be mentioned that the research was interesting and it was tried to enjoy doing it, in spite of the fact that the majority of the group members were not organized and did not follow the agreed deadlines according the task spread between them. It seemed that they did not even feel responsible for what they were doing; as if it was not their contribution to the work. Well, there was shock to some extent at the beginning but anyway at the end the job is done. It can be definitely said there are a lof of things to be improved and the more people learn the better they are. Also, in one of the London's newspapers someone said: "The more you learn the more you think you do not know anything" and it is true. Well, the majority of people want to grow and they need to read the news to keep the track of events.

The feedback as a kind of a recommendation is that the group was formed in that way that none of the members had a background with business or management and it was hard but possible. Well, the feedback to the college is that they should pay attention to the age, the level of English (at least 6.5 in IELTS) and the degree of the future students. And everybody understands that all people exist and do things in order to earn money and be satisfied but they should not forget about customer satisfaction.

Bibliography:

1) Bennet R., 1995 International Marketing Strategy. Strategy, Planning, Market Entry and Implementation.Kogan page Ltd.

2) Hannagan T., 2002 Mastering Strategic Management. PALGRAVE.

3) Hollensen S., 2007 Global Marketing. A decision-oriented approach, 4th ed. FT Prentice Hall.

4) Hough K. and Bentley R., 2009 OCR Applied Business for GCSE. Double Award. Dorchester Typesetting.

5) Marcousé I. et al., 2009 Edexcel Business Studies for GCSE. Servis Filmsetting Ltd.

6) Flint D. 02/12/2009 HSBC: Strategy reconfirmed in a period of regulatory change. [online] Available from: http://www.hsbc.com/1/PA_1_1_S5/content/assets/investor_relations/091202_djf_socgen.pdf [Accessed 29 December 2009]

7) Thomas L. Jr. and Werdiger J., 26/11/2009 HSBC Returns to Its Roots in Hong Kong [online] Available from: http://www.nytimes.com/2009/11/27/business/27hsbc.html [Accessed 17 January 2010].

8) http://www.bank.org.uk/hsbc-bank/ [online] [Accessed 07 January 2010].

9) hsbc.com/1/PA [online] Available from: http://www.hsbc.com/1/PA_1_1_S5/content/assets/about_hsbc/090927_brief_history_asia_pacific.pdf [Accessed 20 January2010].

10) http://www.hsbc.co.uk/1/2/business/commercial-banking[online] [Accessed 04 February 2010]

11) hsbcnet.com/investment [online] Available from: www. hsbcnet.com/investment [Accessed 04 February 2010].

12) hsbcnet.com/solutions [online] Available from: http://www.hsbcnet.com/solutions/about-gbm [Accessed 03 February 2010].

13) http://www.hsbcnet.com/pi [online] [Accessed 28 January 2010].

14) http://www.hsbcnet.com/research [online] [Accessed 28January 2010].

15) hsbcnet.com/treasury [online] Available from: http://www.hsbcnet.com/treasury [Accessed 03 February 2010].

16) hsbcprivatebank.com/aboutus [online]. Available from: http://www.hsbcprivatebank.com/aboutus/what-is-private-banking.html [Accessed 01 February 2010].

17) http://www.hsbcusa.com/hsbcsites [online] [Accessed 17 January 2010].

18) money.cnn.com [online]. Available from: http://money.cnn.com/magazines/fortune/global500/2009/full_list/ [Accessed 20 January 2010].

19) http://topics.nytimes.com/top/news/business/companies/hsbc_holdings_plc/index.html?scp=1-spot&sq=hsbc%20holdings&st=cse [online] [Accessed 06 January 2010].

20) http://www.ukessays.com/essays/business/marketing-strategies-hsbc.php [online] [Accessed 08 February 2010].

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