SWOT Analysis and Literature Review of HSBC Bank

beat Analysis and Literature Review of HSBC coast bone AnalysisA s empennage of the internal and external purlieu is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis.The SWOT analysis provides information that is helpful in matching the firms resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection. The following diagram shows how a SWOT analysis fits into an environmental scanSWOT Analysis FrameworkEnvironmental Scan/ inside AnalysisExternal Analysis/ / StrengthsWeaknessesOpportunitiesThreatsSWOT MatrixStrengthsA firms strengths are its resources and capabilities that can be used as a basis for developing a competitive adv antage. Examples of such strengths include overtsstrong brand namesgood reputation among customerscost advantages from proprietary know-howexclusive access to high grade indwelling resourcesfavorable access to distribution ne cardinalrksWeaknessesThe absence of certain strengths whitethorn be viewed as a weakness. For example, each of the following may be considered weaknesses lose of patent protectiona weak brand namepoor reputation among customershigh cost structurelack of access to the best natural resourceslack of access to key distribution channelsIn both(prenominal) eccentrics, a weakness may be the flip side of a strength. Take the case in which a firm has a large amount of manufacturing capacity. While this capacity may be considered a strength that competitors do not share, it besides may be a considered a weakness if the large investment in manufacturing capacity prevents the firm from reacting quickly to changes in the strategic environment.OpportunitiesThe external e nvironmental analysis may reveal certain new opportunities for profit and growth. Some examples of such opportunities includean unfulfilled customer necessityarrival of new technologies repose of regulationsremoval of international trade barriersThreatsChanges in the external environmental also may present threats to the firm. Some examples of such threats includeshifts in consumer tastes away from the firms products government issue of substitute productsnew regulationsincreased trade barriersThe SWOT MatrixA firm should not necessarily pursue the more(prenominal) lucrative opportunities. Rather, it may pay sullen a better chance at developing a competitive advantage by identifying a fit between the firms strengths and upcoming opportunities. In some cases, the firm can overcome a weakness in order to prepare itself to pursue a compelling opportunity.To develop strategies that take into account the SWOT profile, a matrix of these factors can be constructed. The SWOT matrix (als o known as a TOWS Matrix) is shown belowSWOT / TOWS MatrixStrengthsWeaknessesOpportunitiesS-O strategiesW-O strategiesThreatsS-T strategiesW-T strategiesS-O strategies pursue opportunities that are a good fit to the companys strengths.W-O strategies overcome weaknesses to pursue opportunities.S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats.W-T strategies establish a antiaircraft plan to prevent the firms weaknesses from making it highly susceptible to external threats.HSBCHSBC is a global financial services company headquartered in capital of the United Kingdom, United Kingdom. As of 2010, it is the human beingss sixth largest curseing and financial services group and the worlds 8th largest company according to a composite measure by Forbes magazine. It has close to 8,000 offices in 87 countries and territories across Africa, Asia, Europe, northeastern America and South America and around 100 million customers. As of 30 June 2010 it had total assets of $2.418 trillion, of which roughly half were in Europe, a quarter in the Americas and a quarter in Asia.HSBC Holdings plc was founded in London in 1991 by The Hongkong and Shanghai Banking Corporation to act as a new group place company and to enable the acquisition of UK-based upcountry Bank. The origins of the bank lie in Hong Kong and Shanghai, where branches were first opened in 1865. Today HSBC remains the largest bank in Hong Kong, where the sort out Chief Executive is circulating(prenominal)ly based, and recent expansion in mainland China, where it is now the largest international bank, has returned it to that part of its roots.Its primary listing is on the London Stock deepen and it is a constituent of the FTSE 100 Index. It has secondary listings on the Hong Kong Stock Exchange (where it is a constituent of the Hang Seng Index), New York Stock Exchange, Euronext Paris and Bermuda Stock Exchange. As of August 2010, it was the larges t company listed on the London Stock Exchange, with a market capitalisation of 115.8 billion.HistoryHSBC (acronym origin the Hongkong and Shanghai Banking Corporation) was founded in the former British dependency Hong Kong (in March 1865) and Shanghai (one month later) by Scotsman Sir Thomas Sutherland (1834-1922). HSBC Holdings plc established in 1990 became the parent company to The Hongkong and Shanghai Banking Corporation in preparation for its purchase of Midland Bank in the United Kingdom and restructuring of ownership domicile for the impending transfer of sovereignty of Hong Kong to China. HSBC Holdings acquisition of Midland Bank gave HSBC Group a true market presence in the United Kingdom which was completed in 1992. As part of the takeover conditions for the purchase of Midland Bank, HSBC Holdings plc was required to relocate its world home from Hong Kong to London in 1993.Major acquisitions in South America started with the purchase of Banco Bamerindus of Brazil for $ 1bn in March 1997 and the acquisition of Roberts SA de Inversiones of Argentina for $600m in whitethorn 1997.In May 1999 HSBC embarked on a major acquisition in the United States with the purchase of Republic National Bank of New York for $10.3bn.Expansion into Continental Europe took place in April 2000 with the acquisition of Credit Commercial de France, a large French bank for 6.6bn.In July 2001 HSBC bought Demirbank, an insolvent Turkish bank. Then in August 2002 HSBC acquired Grupo Financiero Bital, SA de CV, Mexicos third largest retail bank for $1.1bn.The new headquarters of HSBC Holdings at 8 Canada Square, London officially opened in April 2003.Then in folk 2003 HSBC bought Polski Kredyt Bank SA of Poland for $7.8m.In June 2004 HSBC expanded into China buying 19.9% of the Bank of Communications of Shanghai.In the United Kingdom HSBC acquired Marks Spencer Retail financial Services Holdings Ltd for 763m in December 2004.Acquisitions in 2005 included Metris Inc, a US credi t card issuer for $1.6bn in August and 70.1% of Dar Es Salaam Investment Bank of Iraq in October.In April 2006 HSBC bought the 90 branches in Argentina of Banca Nazionale del Lavoro for $155m.In December 2007 HSBC acquired The Chinese Bank in Taiwan.In May 2008 HSBC acquired ILFS Investment, an Indian retail broking firm.SWOT Analysis of HSBCStrengthsThe bank is well capitalised and this has enabled it to perform relatively well against other banks in recent economic events.The level of capitalisation means that, going forward, the bank is unlikely to need to borrow from the UK government this lead enable it to retain more autonomy.The bank has a strong presence in acclivitous markets, putting it in a good position to take advantage of future growth in those economies.The banks global presence in Europe, Asia and South America helps to spread risk and offers strong economies of scale.Despite rebranding relatively recently (1999), the HSBC brand has become well-established and is considered particularly valuable within the industry.WeaknessesHSBC associates itself strongly with investment in the small subscriber line sector, but the current economic situation has led to increased risks, voltagely compromising the bodily function levels in this area of the operation.The bank was involved with sub-prime markets in the US and has had to write off large figures lent to high-risk borrowers.Despite falls in the UK interest rate, HSBC has increased its mortgage rates. This may be perceived negatively by borrowers and potential borrowers, adds pressure to an already depressed housing market and could ultimately lead to more defaulting as borrowers struggle with higher repayments.A redundancy programme announced recently may affect morale among staff, leading to decreased production and loyalty.HSBCs branding emphasises its global presence, and this may be seen negatively by some customers in its implication of homogenisation and lack of personalisation.Opportunit iesHSBCs high level of capitalisation places it in a strong position to acquire assetsBanks finding trading conditions particularly laborious at present may be available at low costHSBC also has adequate capital to purchase stronger banks such as Bank Ekonomi in Indonesia, in which it has purchased a stake to continue its Asian expansion despite challenging economic magazines.HSBCs generally strong position presents the opportunity to crush competitors during the economic downturn and to build a reputation for being one of the safer banks for depositors, helping to increase resources for lending.Negative press coverage of competitors such as HBOS may encourage customers to choose HSBC instead.ThreatsTrust in banks has decreased due to financial losses suffered by investors, who may be more inclined to invest elsewhere.Financial losses affecting banks and investors on a global scale suffer resulted in less credit being available to customers. In the UK this is coupled with increas es in living costs resulting in less money being saved.The falling property market has created a rise in numbers of homeowners with negative equity. If a property is worth less than was borrowed to finance its purchase, there is little likelihood that the bank will recoup all its losses if owners default.Claims have been made that HSBC has inform losses resulting from US sub-prime markets, and this could undermine confidence in the bank.Literature Review oblige 1HSBC moves private bank boss Chris Meares to AsiaThe head of HSBCs private banking business has become the latest of the banks senior managers to move from London to Hong Kong.By Harry WilsonPublished 600AM BST 22 Oct 2010Chris Meares, chief executive of global private banking at HSBC, will move out to Hong Kong as part of a reshuffle of the divisions steering, though the businesss will remain headquartered in London.Mr Meares move to Hong Kong follows that of HSBC chief executive Michael Geoghegan at the start of the year .Since then several senior HSBC managers have moved out to Hong Kong, while Stuart Gulliver, who will takeover as chief executive from Mr Geoghegan in January will also move from London to Hong Kong.Mr Gulliver, who currently runs HSBCs global investment banking business as well as its European operations, has spent much of his career in Asia.Speaking recently, he refused to confirm whether HSBCs headquarters would remain in London, with speculation growing that the bank could return to its historic home.In September, Mr Gulliver said he was rattling resuscitateed that the Government-appointed Independent Banking Commission could recommend the separation of retail and investment banking businesses.Hong Kong is keen to promote itself as an alternative to London and the senior officials from the city have been visiting the UK to promote the advantages of moving business there.Standard Chartered, which has large Asian operations, is also seen as another bank that could move its headq uarters out of London and its chief executive, Peter Sands, has made clear his concerns over the increasing amount of regulation in Europe and the UK.HSBCs decision to move of its private banking head to Asia in large part reflects the opportunities the bank sees in capturing a larger slice of Asias growing wealth.In a statement yesterday, HSBC said Mr Meares, along with the other management changes in its private bank was part of a strategy to take advantage of the entrepreneurial wealth creation taking place in emerging markets.Analysis Of ArticleThis article is regarding transfer of chief executive of global private banking,Mr Chris Meares, who is being replaced by Michael Geoghegan at the start of this year.Since the transfer of Mr Meares several more managers of HSBC have moved out of Hong Kong. Mr Stuart Gulliver who is taking over Mr Geoghegan is also moving out of Hong KongMr Gulliver, currently running HSBC Investment Banking and European Operation, has spent much time in A sia.He recently, while talking to media, refused to confirm that if the business is moving its headquarters to its native home that is Hong Kong.In September Mr. Gulliver expressed genuine concern over Independent Banking Commission appointed by government to recommend separate banking for Retail banking and Investment Banking.Hong Kong section of HSBC is much interested in publicity itself as an alternate to London. Official of Hong Kong are visiting UK to convey advantages of moving to Hong Kong.Standard Chartered, having large Asian operation is also seeking to move its headquarters out of London and their chief executive too.HSBCs idea of moving its private banking head to Asia reflects the opportunities that the bank is seeing to capture Asias growing wealth.ConclusionPositive full stop-It will help to increase profits for the company.Will help to gain wealth of Asia.Will provide employmentWill help to further avail of the company.Efficient and Effective working of management .Negative Points-Very riskCan lead to lossesCan also lead to demoralisation of other managers.Article 2 HSBC, Deutsche Bank Complete 1st Yuan-Denominated IRS In HKOCTOBER 22, 2010, 601 A.M. ETHONG KONG (Dow Jones)HSBC Holdings PLC (HBC) and Deutsche Bank AG (DB) completed the first yuan-denominated interest rate swap incubate in Hong Kong, the U.K. lender said Friday, in another sign of growing activity in the offshore yuan market.The IRS lie with, which was completed Thursday, will be delivered in deuce years and is based on the three-month Shanghai Interbank Offered Rate of 3.37%, HSBC said.HSBC declined to disclose the size of the deal, though a local broker said the deal was valued around CNY5 million.The new deal came amid Chinas efforts to boost yuan circulation in Hong Kong and to internationalize the currency.The market for yuan-denominated instruments outside mainland China has begun taking off as China experiments with loosening its controls on the currency, which isnt f reely convertible.Yuan IRS products in Hong Kong had earlier been denominated in the U.S. dollar and were non-deliverable.AnalysisHSBC and Deutsche Bank AG completed first Yuan-denominated interest swap rate deal (IRS) which is another sign of growing activity in the offshore yuan market.This deal was completed on Thursday and will be delivering in two years and based on three month shanghai Interbank offered rate of 3.37%.HSBC denied to disclose size of the deal but a local broker estimated this deal for about CNY5 Millions.This deal came after chinas efforts to boost yuan circulation in Hong Kong ant to internationalize the currency.The market for yuan denominated instruments outside china has started to take off as China is experimenting with loosening its control on the currency, which isnt freely convertible.Yuan IRS products in Hong Kong had earlier been denominated in the U.S. dollar and were non-deliverableConclusionPositive Point-Growing activity in offshore of Yuan market. Boost yuan denominated instruments outside china.China loosening its control on the currency of yuan.Internationalize the currency.Promote IRS products.Negative Points-Delivering in two years.Big market of US to compete with,which can result in lossesBIBLOGRAPHYhttp//www.telegraph.co.uk/finance/newsbysector/banksandfinance/8079081/HSBC-moves-private-bank-boss-Chris-Meares-to-Asia.htmlhttp//online.wsj.com/article/BT-CO-20101022-704524.htmlhttp//en.wikipedia.org/wiki/HSBChttp//www.microfinancefocus.com/news/tag/hsbc.