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Business in Global Context: HSBC Case Study

College- Gulf College - Muscat - Sultanate of Oman

Code: GSP4002

Task:

You have to consider any international bank in Oman. You have to analyse and evaluate its marketing strategies, applying the principles and practices of business in a Global context. In a challenging business environment, strategy gives an organisation the direction and the scope over the long term to achieve advantage through its Configuration of resources. You need to evaluate a company of your choice with global perspective.

Part 1: Analyse the company's Growth and performance. To begin your case study, evaluate the bank's internal and external capabilities and growth. Employ descriptive statistics to support your analysis and investigation.

Part 2: Carry out the SWOT analysis of the company. Using the information you gathered in step one, continue your analysis by examining and making a list of SWOT factors.


Answer

Introduction 

International banks in Oman have considerably strategized their market policy that has led to the subsequent success of the financial sector. In this assignment in order to identify the marketing strategies along with its principles and practices of HSBC, bank in Oman. This study attempts to evaluate the success of the bank in regards to the sustainable resourcing in the challenging business market of Oman. 


Part 1

Analysis of the HSBC’s growth and performance 

In a tone of empirical overview, it can be stated that HSBC Bank Middle East is a prospective subsidiary of HSBC Holdings PLC that maintains a diverse network of offices across several countries in Middle East. Oman is no such exception. As the historical accounts opine, HSBC PLC in Oman has been serving the country from the advent of Sultanate since 1948. In that course, it has been serving a diverse section ranging from corporate to individual financial services. In the recent decade, HSBC Oman has been able to establish over 90 branches across the country with full-service trading while heeding on several private banking operations. Moreover, it has been dedicated to provide several custodial financial services on behalf of the Muscat Securities Market. Furthermore, as a reflection of the courtesy patronized by the Sultanate, HSBC Oman is also dedicated to cater premier services to the major expatriates in the Omani residential provinces ( www.hsbc.co.om , 2017). Though it has been extensively considered that the services of HSBC Oman has been deteriorated after fusing with the Oman International Bank by the end of 2012, the relative financial stability of the original unit has been able to retain their prevalent status as one of the effective financial service providers across the globe.


The performance of HSBC Oman has been saturated with the auxiliary offerings that they are devoted to provide to their core customer and the characteristics can be scrutinized in terms of the feedbacks provided by their core consumers. For instance, HSBC Advance credit card and Premier cardholders are prone to receive various unofficial benefits such as an equivalent Entertainer access to the Plaza Premium Lounge at Muscat International Airport ( www.hsbc.co.om, 2017).


The evident switch to Mobile banking and several other virtual quarters reflects their adherence with the intention of enhancing of upgraded services. In the advent of virtual invasion and HSBC Oman, being consistently accused of breaching nominal virtual security protocols, the respective bank has been able to install SecureKey along with the facility of immediate SMS alerts after every transaction ( www.hsbc.co.om, 2017). It is by the virtue of their relative expertise of performance while adapting a global view of banking, the core customers of HSBC Oman has been enabled to make instant transfer to any of the overseas account.


Though it has been conveyed that after the forced agreement with new American Sarbanes-Oxley laws, the growth of HSBC Oman have hindered considerably, it is HSBC Oman that has been able to derive a staggering amount of investment from the global investors due to the stability of the economy of the original branch of HSBC PLC across the BRIC countries. 

 

Part 2

SWOT analysis of HSBC 

As it is already established that the underlying tussles of the banking sectors intends to turn the associated market intensely volatile day by day, it is imperative for the banking sectors to employ proper strategic management frameworks to cope with likely adversities. As the rivalry is comparatively more intense in Oman, HSBC PLC must feel a sheer necessity to employ effective strategic management tools such as SWOT to discern their stance in the underlying market while identifying their scope to obtain relative competitive edge. Before deploying the SWOT framework, it seems imperative to mention the prior customer focus of HSBC PLC in Oman in order to grasp their strategic intuition properly (Bilal et al. 2016). The target customer groups that HSBC PLC is desperate to tap typically belong to Private Banking, Individual Financial Services, Commercial Banking Sectors and Corporate & Investment Banking Markets


Strengths:

  • Successful global financial entity with the ability to offer prudent advices and suggestions to identical units regarding global trading tricks
  • Several global branches with diverse client bases
  • Relative expertise to propagate effective structural growth
  • In terms of profit, HSBC PLC is world’s second-largest bank
  • Fecund ideas to improve the amount of return from investments
  • Expertise to offer qualitative services with comparative ease


By the virtue of these strengths, HSBS PLC in Oman has been able retain their status as one of the strongest banks of the World (in terms of financial stability) in the phase of global financial crisis. As per some fecund global financial accounts, the bank has been able raise £750 million in order to replenish the respective treasury as it was cardinal for them to evade inevitable financial collapse. The profit characteristics of HSBC PLC in Oman over the last decade is quite impressive in terms of consistency and in the phase of brooding reluctance of the investors, HSBC PLC has been able to extract a staggering amount from them that they invested for preventing the identical concerns from drying up (Al-muharrami and Murthy, 2017). It is an inevitable consequence to have different principles regarding return in investment since HSBS PLC in Oman enjoys an intellectually diverse client base across the globe. It is by the virtue of their strengths that HSBC PLC in Oman has been able to sustain with their prevalent status in the era of rife financial collapse. 


Weakness:

  • Lack of branding
  • Bad debts

As per some worthy banking records, the banking businesses of HSBC PLC in Oman has been literally forced to imbibe with an unique brand name although it was already established with different brand names across the globe. Before integrating their business under an exclusive international framework, the previously mentioned incident has hurt their prevalent brand recognitions considerably (AlMaimani and Johari, 2015).

Furthermore, it has been discovered that several banking experts have imparted a perspective of scepticism towards the financial stance of HSBC PLC of Oman since they have been extensively accused of abrupt hikes in bad debts as compared to their proportion of loan portfolio.


Opportunities:

  • Steady business growth by the virtue of stable BRIC economy
  • Investment in Middle east in the ambience of global reluctance
  • Strong business presence by the virtue of oil industries

In the advent of global financial crisis, the HSBC PLC across the BRIC (Brazil, Russia, India, China) countries has been able to restore the balance of any decline which prevented every concern of HSBC PLC from drying up (Gattoufi et al. 2014). HSBC PLC in Oman is no such exception. The steady business growth by the virtue of stable BRIC economy has made the expansion of HSBC PLC across several countries seamless.

As the reluctance of the global investors to invest in Middle-East is already established as an unfortunate aftermath of the global decline and the law-and-order issues that most of the middle-eastern countries combating with, HSBC PLC have been able to exhibit the audacity to invest in the region considering the correspondence of oil industries as an opportunity (Parves, 2013).


Threats:

  • Huge earnings as a origin of conflict
  • Severe issues regarding virtual invasion
  • System rupture due to viruses

It is still a sustaining claim of most of the employees of HSBC PLC in Oman that the absolute gaining of the bank has not properly reflected in their wages, which intensifies the hostile atmosphere prevalent between the management and the employee union. Furthermore, feeble virtual security services of the Online branches of HSBC PLC in Oman with evident breaching of the obligatory virtual protection protocols could be posed as nascent threats in the oeuvre of HSBC PLC of Oman (Claessens and Horen, 2017)


Part 3

Effects of the competitive advantage 

The major advantage that ensures the competitive edge of the respective bank is the ability to retain the prevalent stature of steady growth and financial stability in the times of global economic recession. It has been experienced at that times that most of the identical concerns related to individual and corporate financial services has dried up due to the lack of proper financial expertise and global investors. Moreover, as an unfortunate aftermath of the global recession most of the global investors appear reluctant to invest on the global banks which could be cited as the main reason of the collapse of several financial entities (Mohamed, 2015). In this consequence, HSBC PLC has been able retain their operations intact by the virtue of their global patrons who did not let their prospective subsidiaries to dry up. This fabulous stability and consistent growth in the times of global recession can be cited as one of the prime effects of their relative competitive edge.


In terms of the current context and in an empirical note it can be cited that the status that HSBC PLC in Oman and several other Middle Eastern countries has been able to retain as the second largest financial services provider across the globe is chiefly due to their adherence of qualitative performance and upgraded services (Ananda and Devesh, 2016). Though the HSBC Oman has been consistently accused to be involved in persistent bad debts as compared to their proportionate loan portfolio immediately after the merging of Omani International Bank with HSBC PLC, it also need to be mentioned on the same note that the subsidiaries of HSBC PLC can only be able to persuade the global investors to invest in their schemes and business ventures. Most of the global investors hesitates to invest in the Middle Eastern regions chiefly due to the apparent political unrest and law-and-order issues, it is the competitive advantage of HSBC Oman that has been able to invest in those regions.


It can also be said that the drastic yet consistent reform that HSBC Oman has been able to maintain regarding their mode of services along with offering several benefits to their core consumer is by the virtue of their competitive advantage since in the meantime the identical concerns seem frustrated to devise their exclusive customer retention strategy. In the same regard, it can be said that it is quite an expected fact that HSBC Oman enjoys a comparatively culturally diverse client base across the globe since their stature and the dimension of competitive edge is that much attractive (Al Shubiri and Jamil, 2017).


In summary, it the adherence of HSBC Oman with qualitative and punctual services is one of the chief reasons that consolidates their competitive edge while proliferating it across the globe. Moreover, since it is a subsidiary of one of the globally recognized banks with a culturally diverse client base, it is easier for them to convince the global investors who feel abashed to invest after the gruesome aftermath of financial recession. Furthermore, their competitive advantage allows them to offer staggering loans to the other identical concerns with meagre repo rate (Al Shubiri and Jamil, 2017).      

  

Part 4

Ethics and corporate social responsibility 

HSBC Holdings PLC and their subsidiaries (HSBC Oman) have consistently maintained a comparative ethical soundness simply by adhering to their corporate social responsibilities sincerely. It has been feebly mentioned in the previous section that since HSBC Holdings PLC has been able to retain their financial steadiness along with a diverse client base across the years of global recession, the management serve financial assistance to their fellow identical entities simply by offering them substantial loans with meagre repo rates in the spirit of ethical responsibilities. In this regard, it can be mentioned that they have been effectively functioning throughout to enhance the standards of the financial sectors across the city. For instance, in 2006, HSBC Holdings PLC along with its subsidiaries and International Financial Corporation played a cardinal role to re-launch the Equator Principles that suggests some prudent recommendations regarding the environmental and social guidelines for project finance. This formulation of new guidelines seems to assist the improvement of social standards prior to the financing of projects and ensuring transparent implementation of that. These seem to earn a global applause as more that 50 financial institutions have re-adopted the recommended EPs as a reliable outline for global project planning.


In terms of policies that has been proposed by HSBC PLC in order to promote ethical financing practices, the respective bank appear quite sound since HSBC Oman have devised a fourth sector guideline of the Energy Sector Policy. These policies seem to provide the instructions to ensure good practice in terms of social and environmental standards within the energy industries ( www.hsbc.co.in, 2017). Moreover, HSBC Oman seems to present their consent on the Carbon Finance Strategy declared by their patrons that appear to cater prudent remarks on the implications of climate change. Furthermore, such strategy assists to comprehend the industrial exponents to develop a economy with lower carbon consumption ( www.hsbc.co.in, 2017).


It has been discovered that most of the entities of HSBC Holdings PLC appear committed to carbon neutrality and lowering the Carbon Di-oxide emissions within the phase of the operation. In the year 2006, an abrupt hike in per capita carbon consumption on behalf of HSBC PLC has been observed chiefly for their excessive air travel. In this regard, the respective unit seem to reverse the trend back while taking the reduction of carbon emissions consistently as a challenge. These commitments regarding the reduction of carbon emission has exhibited the fact that they are dedicated to carbon neutrality while addressing emerging issues with considerable circumspection.


In summary, HSBC Holdings PLC and its prospective subsidiaries has been able to improve their financial strategy while assisting the identical concerns considerably with a meagre interest rate. Moreover, HSBC Oman and similar exponents of the PLC seem dedicated to promote ethical practices across the industrial arena while suggesting prudent guidelines and principles to acquire so. In recent years, HSBC PLC along with their prospective exponents commenced a global education initiative known as Future First. This appears dedicated to serve the straying street children and orphans with requisite financial assistance to support their education programme ( www.hsbc.co.in, 2017).   


Part 5

Reflective summary 

It is evident from the previous discussion that there exist credible reasons to consider HSBC Holdings PLC and their subsidiaries as one of the greater financial service providers across the world. This remained as an universal status in favour of HSBC Holdings PLC with a consistent nature since they has been able retain that throughout their operational oeuvre. For instance, as it was discussed extensively in the study that in the times of the global financial collapse when most of the banking sectors appear prone to be dried up, HSBC Holdings PLC and their respective subsidiaries have been able to sustain a persistent financial stability while rising a substantial capital from that volatile market to quench the requisite of the treasury. In this same note, HSBC PLC has been able to offer substantial loans to the identical concerns with meagre interest rates that enable them to thrive on that adverse environment (Sree Rama Murthy and Al-Muharrami, 2014)


The massive stock market crash along with the consequences typically endows the global indicators with the reluctance to invest in the underlying market that is the main reason for the market, which dried up subsequently. In this regard, HSBC Holdings PLC along with their subsidiaries such as HSBC Oman has been able to enjoy a multicultural client base with all the requisite dimensions of diversity simply by the virtue of their relative competitive edge. Furthermore, it needs to be mentioned that the patrons and the exponents of HSBC Holdings PLC has not been willing to leave their subsidiaries suffer from financial draught and simultaneously offers them financial assistance along with loans with a meagre reverse repo rate that have enabled them to sustain in the time of intense adversities (Sree Rama Murthy and Al-Muharrami, 2014).


Several accusations have emerged during the phase when Omani International Bank seem to be merged with the HSBC Holdings PLC in order to become HSBC Oman regarding the degradation of services along with allegations of getting involved in bad debts. On the other hand, labour trouble along with employee strikes disrupted the functionality of HSBC Holdings in PLC on the appeal that their wages does not reflect the mammoth earning measures of the bank itself. In such adverse consequences when most of the concerns seem to lose, their clients HSBC Holdings PLC along with their subsidiaries seem to retain their prevalent status. Furthermore, when most of the globally acclaimed investors seem to refuse to invest in the Middle Eastern countries due the political turmoil and law-and-order issues rife there, HSBC Oman has been able to persuade their clients to continue investing on their businesses and schemes (Mohamed, 2015).


In the advent of technological expertise, when HSBC Oman decided to upgrade their services simply by devising a virtual platform to address the corporate and individual financial enquiries, issues began to emerge regarding the threats of virtual invasion. Moreover, several accusations seem to target the bank by saying that they have breached the nominal protocols of cyber security. This led the bank to install SecureKey as an analogue of their statement regsarding cyber security. Though accusations continue to evoke, but HSBC Oman seem to retrieve their prevalent stature. 


Apart from wielding the competitive edge on its zenith, HSBC Oman and the prospective exponents seem to be ethically sound in terms of the measures that they have been able to devise. For instance, their dedication towards the restoration of ecological balance simply by reducing the emission of carbon di-oxide appear commendable since they directly refused to get involved in any kind of activities that have association with carbon consumption. Moreover, they seem to promote the global educational programmes of the straying children and orphans with ethical liability (Mohamed, 2015).


In summary, HSBC Holdings PLC and its corresponding activities justify the global acknowledgement that they enjoy throughout their oeuvre. In terms of HSBC Oman that stained the brand recognition of the original unit after merging with their regional branch and the subsequent surrender on the Sarbanes-Oxley laws seem unable to vandalize their prevalent stature. Moreover, their competitive advantage chiefly earned by their strong corporate governance skills along with the ethical soundness seems to contribute to their higher longevity.              


Conclusion 

In the light of the above study, it can be concluded that, HSBC Holdings PLC and their associated exponents such as HSBC Oman has been able to frame a relative competitive edge chiefly due to their culturally diverse client base along with the ethical soundness that they have been able exhibit throughout their oeuvre of operation.

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