Executive Summary
In the current global setting, competition in all realms of life continues to get intense especially within the business world. If every organization runs in the competition and attains success, the organizations must follow the criteria of strategic management. A number of approaches guide the industry to utilize the most opportunities and enables an organization to face hurdles that frequently occur within the business environment. The strategic and market in approaches any organization chooses to use mainly helps to maintain and sustain strengths of the company. As established earlier, the principal intention of the paper is to conduct a strategic analysis of the marketing strategies using HSBC as a leader in the retail banking industry of the world. HSBC Group is among the world’s largest and most competitive financial and banking services organization. It is a leader in retail banking organization. Its businesses are well established within the Americas, Europe, Africa, Middle East and Asia-Pacific region. HSBC Group was incorporated in 1991 in England based in London. With its slogan, ‘the local bank of the world’, HSBC has made itself different from other competitors through its brand name that describes the unique features that distinguish it. The banks total asset value as at 2004 was placed at £660 billion. The bank has more than 9000 offices all over the world. Recommendations presented by this paper for HSBC to attain its objectives, opportunities as well as goals are: Higher market shares within the American market, a larger concentration and focus for the Chinese market, expanding the electronic commerce sector, more global expansion and improving on their brand.
- Introduction
HSBC Group is among the world’s largest and most competitive financial and banking services organization. It is a leader in retail banking organization. Its businesses are well established within the Americas, Europe, Africa, Middle East and Asia-Pacific region (Brownsell, 2009:8). HSBC Group was incorporated in 1991 in England based in London. Later in 1999, the organization established its global brand name ensuring that the organization’s corporate symbol was made familiar all over the world. With its slogan, ‘the local bank of the world’, HSBC has made itself different from other competitors through its brand name that describes the unique features that distinguish it. The banks total asset value as at 2004 was placed at £660 billion. The bank has more than 9000 offices all over the world (Brownsell, 2009:8).
HSBC employs more than a quarter of a million people over a number of countries and borders. The shares of this bank are held by about 200,000 individuals in about 100 territories and countries. The organization shares are additionally traded on a number of the best and globally renowned stock markets, in London, New York, Paris as well as Bermuda stock markets in that order. The Utilization of information technology and the advancement, as well as continued development of the same, is among the main tools the bank applies for functionality on a global scale. The electronic business channels the bank uses comprise of the internet, telephone banking, PC banking, and interactive TV. HSBC as a leader in retail banking maintains a private network (extranet and intranet), where the bank’s websites and other digital platform attract more than a billion visits in the last few years.
The most essential intention of this report is to investigate the marketing strategies of HSBC Holdings. As a market leader in the current global retail banking sector in the world, it is essential to study what the bank does in terms of marketing and development strategies in order to be the best in the industry (Brownsell, 2009:8). This report will offer information on the activities of the company, the market environment and financial performance. The paper will go through major topics with an overview that is reasonable. The first section will major on the profile of the company and its activities, followed by an analysis of the micro and macro environment of the organization. Then, an audit of its marketing strategies and later on recommendations and a conclusion. The paper aims at identifying existing marketing strategy and value creation process of HSBC. The paper will also research, analyse and evaluate the key strengths and weaknesses of the bank’s existing marketing strategy. Finally, the paper will offer alternative marketing strategies for increasing market share, and profitability.
1.1 Company Information
In the current global setting, competition in all realms of life continues to get intense especially within the business world. If every organization runs in the competition and attains success, the organizations must follow the approaches of strategic management. A number of approaches guide the industry to utilize the most opportunities and enables an organization to face hurdles that frequently occur within the business environment. The strategic and market in approaches any organization chooses to use mainly helps to maintain and sustain strengths of the company. In addition, it helps in the attainment of objectives and goals the organization has chosen in its manifesto. As established earlier, the major intention of the paper is to conduct a strategic analysis of the marketing strategies using HSBC as a leader in the retail banking industry of the world.
The HSBC Group offers a variety of financial services like consumer finance, personal financial services, commercial banking, corporate investment markets and banking and private banking. It operates in more than 85 countries all over the world with over 7000 offices globally. HSBC has a widespread network with more than 200000 shareholders in more than 120 territories and countries (Capon and Marshall, 2008:68). The bank offers a number of financial services as mentioned above. The main operations of the bank are in Europe, America, Asia-pacific region, Hong Kong and Australia. The bank has its interests in emerging markets in the Asia Pacific regions and continues to invest heavily in such regions.
The main competition for the HSBC Holdings organization within the United Kingdom includes the Royal Bank of Scotland and Barclays (Capon and Marshall, 2008:68). These corporate are under the scrutiny of HSBC Holdings. Nonetheless, HSBC is a leader and not a follower in relation to strategy, management manners and ideas of the competitors. Within the past five years, HSBC Holdings has revealed steady growth and development in its share price. This can be used as an indicator of clarity in the view that an organization is worth making investments in. HSBC Holdings additionally demonstrates continued growth and development and is, therefore, a reliable organization. In regards to ownership of assets, the HSBC Group Corporation is the third in the global ranking. Hong Kong has delivered almost 22% of the company’s profits.
- Methodology
In order to identify all of HSBC’s current marketing strategies, the article will begin with an evaluation and analysis of the main strengths as well as weaknesses of the organization. In order to offer a better understanding of every assumption, there will be an analysis of the same using a number of theories like SWOT, STP and marketing mix.
Secondly, this article will present alternative marketing strategies. In this regard, the utilization of the SMART rule will enable attainment of the target objectives. In accordance with the aforementioned, there will be consequential growth of the company in its market share, creation of value, profitability and sustainability. Since HSBC is a global company with operations all over the world, the report will look at global marketing strategies in the major countries and more so in the United Kingdom.
- Situational Analysis/ Current Situation
The HSBC Group offers a variety of financial services like consumer finance, personal financial services, commercial banking, corporate investment markets and banking and private banking. It operates in more than 85 countries all over the world with over 7000 offices globally (Brownsell, 2009:8). It is essential to consider how the organization became a leader in retail banking institutional in the global setting using the appropriate marketing strategies. Marketing strategies are primary patterns of planned and present objectives, organizational interactions and resource deployments within a market, the competitors as well as other environmental factors.
3.1 The Internal Environment Determination Base
In order to assess the base of HSBC Holding’s current situation within the global environment, the paper requires an initial identification of the term marketing strategy. This term can be defined as primary patterns of planned and present objectives, organizational interactions and resource deployments within a market, the competitors as well as other environmental factors.
3.1.1 Mission and Vision
In order to research, analyse and evaluate the key strengths and weaknesses of the bank’s existing marketing strategy, the paper will have to assess the current principles included in the beliefs of the organization, the organizational values and the definitions of the business for every company offering the legitimization, motivation and the direction. As a consequence of the current situation, HSBC will develop a new marketing strategy (Kahr, 2011:9). The management must aim to make the organization better for the days ahead.
The vision of HSBC Holdings is to be the best, most powerful, admired and profitable leader in retail banking through service to millions of global customers. The mission statement of the company is to have regard to all ethical values in meeting the financial needs of the customers. To achieve this objective, the company has to conduct itself in the most appropriate and fastest manner in order to continue innovating strategies so as to attain human resource with superior quality, service package and technological infrastructure (Brownsell, 2009:8).
The company puts a huge emphasis of their set values. The company wants to ensure that all employees have a feeling of empowerment in doing the right thing while acting with a lot of integrity. In doing this, the company hopes to meet expectations of the customers, employees, society, investors and regulators. These values describe the features of HSBC while reflecting the best of the company’s heritage. The values define what the company stands for as a business entity and the distinction it has from other companies in the same industry. Through operations relating to the values described, the company is: dependable, open to a number of cultures and ideas, and connected to the community, customers, investors, regulators and each other.
Core competencies are a representation of a competitive advantage of every organization. These competencies assist an organization to differentiate, make more profits, and become successful as it gains a larger share of the market. HSBC works hard on its competencies so as to gain a competitive edge and become the best in retail banking. Size does not matter in business, and a larger share does not mean an organization should halt their competitive strategies. However, size helps an organization to offer the best services, make innovative solutions and attain customer satisfaction (Capon and Marshall, 2008:68). HSBC core competency is the localization of their banks in every region to become the local bank of the world as stipulated in its vision and mission statements. Further in their objective, HSBC Holdings main aim is to have a continued improvement of the core competencies as it continues to innovate in the quality as well as productivity. The bank also offers career development chances to their employees while it maintains standards of a socially responsible company.
3.1.2 Segmentation Targeting and Positioning (STP)
HSBC as a global retail banking institution delivers services in a number of countries all over the world. In this regard, segmentation is differentiated into two types of businesses namely:
- B2B (Business to business): - this segmentation describes exchange of services, goods and products as well as information between businesses.
- B2C (Business to Customer): - this segment describes exchange of services, goods, information and products between organizations as well as end consumers.
3.1.3 Marketing Mix
A marketing mix can be defined as a combination of activities and actions that an organization uses to sell their services and products. They are described as the 4P’s of price, production, promotion and place (Creamer, 2005:76). HSBC plans involve choosing their customers and then making a design a marketing mix that is persuasive so that they can buy the products. Marketing for products and services of a financial nature pose distinctive hurdles to marketers since products and services in the banking sector are intangible, cannot be inventoried and are inseparable. A marketing mix that is expanded is the sole focus for HSBC to fully bridge the gap and provide a solution to the differences occurring between marketing for financial services and product marketing. The marketing mix that is expanded has the sole intention to capture distinctive features of financial services.
Once a company chooses a business strategy, it must embark on planning marketing details using the marketing mix 4P’s.
3.1.3.1 Price
In general, low prices for products and services attract a larger customer base. However, HSBC does not focus on the pricing strategy. The company uses service strategy where employees in HSBC serve their clients using the best customer service available.
3.1.3.2 Product
The company makes use of a hexagon symbol that provides the best customer experience as well as corporate social responsibilities. This strategy uses brand recognition. HSBC uses a full range of services like consumer finance, personal financial services, commercial banking, corporate investment markets and banking and private banking.
3.1.3.3 Place
HSBC as a company has a presence in almost 85 countries spread across the world. The main offices are in London, Hong Kong and the United Kingdom. Additionally, internet presence is available so that customers can access accounts all the time wherever they are at their convenience.
3.1.3.4 Promotion
Advertisement is the best way to make customers identify with promotions. NSB uses a number of advertisements ranging from Billboards, newspapers, websites, radio and television sets. Additionally, the company sponsors many companies and exhibitions.
3.2 Assessing the External Environment
3.2.1 SWOT Analysis
Strengths, weaknesses, opportunities and threats of the company are basic models to assess what an organization can attain and its limitations to the same. This model focuses on the internal (strengths and weaknesses) as well as the external (opportunities and threats) business environment.
3.2.1.1 Strengths
HSBC as a global company enjoys strengths relating to international finance, record profits, listing in strategic locations and its Chinese presence. With a global presence, HSBC is well capable of offering financial help to international clients. Additionally, company strength lies in HSBC’s possession of a good image brand in the market.
3.2.1.2 Weaknesses
Poor performance and HSBC’s brand name are the weaknesses of the company. Personal finance services have been reported to be of poor quality in performance. Even with a global name, HSBC entered late in the industry. This makes acceptance quite hard from some local members who only trust locally recognized brands. With the presence all over the world, customers may get confused (Challagalla et al., 2014:16). The name change hurt the business as most people do not recognize it now.
3.2.1.3 Opportunities
With a large Asian market share, there is room for expansion. The high level of capitalization allows for a strong position in the acquisition of assets. Furthermore, the company has put a lot of capital aside in buying vigorous banks to increase its customer base.
3.2.1.4 Threats
The company receives daily threats relating to cybercrime. This hurts the business as users are increasingly avoiding large banks that are the target for cyber criminals. In addition, the bank must spend millions trying to fix its security system that may prove hazardous if hacked. Another area of concern for the giant bank is the current regression of the UK and European economy. Expenditure in costs of living increases and therefore there are small amounts to be saved by the household.
- Recommendations
For the establishment of a company’s corporate, departmental or any marketing objective, SMART strategies may be applied.
- Specific. The strategy should be clear and simply stated.
- Measurable. There should be a scale of determining metrics and measuring progress
- Aspirational. The strategy should be attainable using the situation of the market
- Realistic. It should fall in the realms of reality and not be over optimistic.
- Timely. The date of completion should be well stipulated.
Based on such a setting, the recommendations presented by this paper for HSBC are;
- Attain higher market shares within the American market,
- focus for the Chinese market,
- expand the electronic commerce sector,
- Pursue more global expansion and improving on their brand.
This paper additionally recommends that the company adopts a differentiation strategy. This will enable the organization to offer products and services that can deliver unique features that are well valued by their customers.
- Conclusion
Considering the discussion above, HSBC has a good marketing strategy that is reinforced well by the strong brand name and a huge share of the global market. The company should continue to carry out more innovative promotions, research more on their strategies abroad, differentiate their products and focus more on the American and Chinese market. All this should be done while HSBC maintains their European and Asian presence. A market leader like HSBC in the retail banking sector should be able to make use of their strengths and seek more opportunities by investing in e-commerce and other global expansion plans. Through a higher market shares within the American market, a larger concentration and focus for the Chinese market, expanding the electronic commerce sector, more global expansion and improving on their brand, HSBC is guaranteed to maintain its global presence and be the top in the industry.
In conclusion, core competencies are a representation of a competitive advantage of every organization. These competencies assist an organization to differentiate, make more profits, and become successful as it gains a larger share of the market. HSBC should continue to work hard on its competencies so as to gain a competitive edge and become the best in retail banking. Through elimination of the threats and company weaknesses, the organization should manage to face all the challenges and attain their goals and objectives.
References
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Business Source Premier, EBSCOhost, viewed 9 October 2014.
Creamer, M 2005, 'HSBC', Advertising Age, 76, 45, p. S-10, Business Source Premier,
EBSCOhost, viewed 9 October 2014.
Challagalla, G, Murtha, B, & Jaworski, B 2014, 'Marketing Doctrine: A Principles- Based
Approach to Guiding Marketing Decision Making in Firms', Journal Of Marketing, 78, pp. 4-20, Business Source Premier, EBSCOhost, viewed 9 October 2014.
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