Nowadays, the competition of banking company is very demanding and challenging. Thus, many different organizations should be used strategic management so that compete effectively and successfully in theirs. In the recent years, HSBC confronted with significant change, and becoming increasingly open in a way which reflected its brand position to be “The World’s Local Bank” (Hsbc Bank Plc. 2010). HSBC was known as one of the biggest banking and financial services organization in the global. It has more than 9,800 offices worldwide and employs over 253, 000 people in 85 countries in the world.
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The Strategies of HSBC
In order to competing with other organization successfully, HSBC was able to use many strategies such as Marketing Mix, SWOT Analysis, PESTLE Analysis, and Porters Five Forces Analysis. These strategies focus on four customer groups include Private Banking, Personal Financial Services, Commercial Banking, and Corporate & Investment Banking and Markets, and these will help HSBC reach their organization goal. This paper gives emphasis on Marketing Mix (4Ps) and Competitor’s Analysis (SWOT Analysis).
Marketing Mix (4Ps)
Once the company is ready to choose business strategy, it has to begin planning the details of marketing mix or 4Ps (Kotler at el. 2008). The main aspect of Marketing Mix is product, price, place and promotion that the firm combine to produce the response it wants in the target of market segmentation.
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Product
HSBC uses hexagon symbol which is one of the world leading brands for customer experience and corporate social responsibility. It represents brand recognition.
Financial service product. HSBC provide a full range of service, such as personal finance, commercial banking, corporate investment banking and markets, private banking, insurance, mortgage, credit cards and so on.
Price
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Price and Service Strategies. Generally, a low price will attract more customers, but HSBC did not focus on pricing strategy. For instance, the AER interest rate of saving account between Lloyds TSB and HSBC are quite the same. Thus, HSBC decided to use service strategy. For example, employee in HSBC serve customer with the best service.
Place
HSBC comprises around 9,800 offices in 85 countries especially Hong Kong, China, and UK.
HSBC group moved headquarters in 1993 from Hong Kong to London
Internet Banking – customers can access their account 24 hours per day and 7 days per week without go to bank.
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Promotion
The best way to acknowledge promotion is to use advertising. HSBC used many kind of advertising, such as billboard, TVC, print ad, newspapers, spot radio and also website.
In addition, HSBC sponsored with many company and exhibition, such as Jaguar, HSBC Women’s Champions.
Competitor’s Analysis (SWOT Analysis)
According to Dess et al. (2008), SWOT Analysis is a powerful technique for analyzing organization’s internal and external environment. It consists of Strengths, Weaknesses, Opportunities and also Threats. Strengths and Weaknesses focus on internal factor which is evaluated inside organization, whereas Opportunities and Threats stress on external factor which is evaluated outside organization.
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Strengths
Firstly, HSBC use CSR strategy to support social and environment, for example HSBC and BGCI aims to protect 20,000 plants from extinction (HSBC Holdings plc, 2006). Thus, it can make good brand image.
Secondly, HSBC is one of the biggest banking and financial service throughout the world.
Thirdly, There is a lot of millions customer worldwide.
Fourthly, the bank no needs to borrow subsidy from the UK government, so HSBC is a strong financial company without control of UK government.
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Lastly, HSBC has a lot of well-trained staff to deal with customer inquiry.
Weaknesses
Customer confused with brand. In the last century, HSBC had set up many banks in different countries under different names, such as Hong Kong Bank of Canada, British Bank of the Middle East and HSBC Banco Robert. Nowadays, they were all branded together. However, the name change has hurt HSBC in brand recognition.
Opportunities
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HSBC has a large market share in Asia; consequently it is suitable for expanding branch in Asia.
HSBC’s high level of capitalization as a strong position to acquire assets.
Moreover, HSBC also has much capital to purchase vigorous banks such as Bank Ekonomi in Indonesia and so on.
Among less advertising coverage of competitors such as Natwest, Barclays, it may encourage customer to choose HSBC.
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Threats
In the past, HSBC Group CEO announced that HSBC received ten thousands of email viruses per day, and must spend much money to fix it.
UK Economy is getting down and expenditure in living cost increased resulting in less money to be saved.
Conclusion
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The marketing environments is very complicated system to analysis strategies of firms; many firms need to be thoughtful of factors that will be integrated depends on the trends in the market place. This paper has looked at the strategies of HSBC. It is a worthwhile to conclude that HSBC has fulfilled an excellent business in investment in its brand name, changing to hexagon symbol which stated “The World’s Local Bank”. It has not only enhanced the company and reinforced their customer basis, but also increased HSBC market share in the world. To sum up, remaining the world leader of the banking and financial services organization, HSBC has to adapt their strategic to respond customer demand and market needs.