HSBC Group - Case Study Example

Marketing Case Study: HSBC Group Name Institution Date Table of Contents Table of Contents 2 Background Information of the Company 3 Organization Marketing Concepts 4 Decision Problem and Decision Maker 5 Decision pressure 5 Limits of Authority 5 Decision Making Criteria 6 Marketing Environment Analysis 7 SWOT analysis 7 Strengths 7 Weaknesses 7 Opportunities 7 Threats 8 Segmentation, Targeting and Positioning 8 Marketing Mix Strategies 9 Recommendations 10 Bibliography 12 Introduction The decision making criteria used by an organization is important in determining the success of the organization. It is important for the decision making criteria to be in line with the objectives of the organization (Balci et al., 2011). The marketing process depends on the concept for the purposes of growth and expansion. The Hongkong and Shanghai Banking Corporation (HSBC) is one of the most successful companies in the banking industry. This is due to the criteria used during the decision making process in terms of growth and expansion. It is through the strategies that the organization has been able grow at a higher rate and establish branches in all the continents. The strategies of the company are mainly influenced by the decision making criteria which gives the employees the power to make some of the most crucial decisions. The company is a global brand and is recognized allover the world due to its success. However with the growth of the banking industry, competition from the local companies is a challenge to the company. The management is therefore interested in the local market and it is exploring the possibility of penetrating in the local market. The paper critically discusses the possibility of a global brand penetrating in the local market in relation to HSBC and the decision making criteria. Background Information of the Company The company was founded in 1865 and it has been in operations since then. HSBC is a company operating in the banking industry and it has always performed well in the sector. The company has been ranked the best in the industry several times. It has more than 7,200 employees worldwide and it operates in all the continents. However, the strategies of the company are mainly global and it has a lot of investments in the Asian market (HSBC, 2012). This is due to the advantages it has enjoyed in Asia with an example being the first bank in Thailand. HSBC has more than 89 million customers worldwide which has contributed to the growth of the company. The high number of customers is advantageous to the company as it suffered less during the global recession. Acquisitions have been one of the most important strategies of The Company and it has led to the vast growth of the company. The company also embarked on the promotion of its brand name and a single logo was used for all the branches of the company. This is one of the global strategies of the company and it has played a crucial role during marketing. The company has also worked with other companies during the advertisement process and hence the success of its strategies. However, the current problem facing the company is the issue of localization for the purpose of penetrating deeper in the market. Organization Marketing Concepts The concepts of marketing used by the company are mainly aimed at ensuring customer satisfaction. All the marketing strategies of the company are based on customer satisfaction. It is for this reason that the company always informs their customers what to expect from the company. This is important for both the customers and the company. The company considers the customers as the most valuable asset and any complaint by the customer is usually dealt with immediately. On the other hand, the company has a customer care that is responsible for collecting the views of the customers regarding the operations of the company. The marketing strategy that has been employed by the organization is global. It ensures that the operations of the company are the same in all the branches. The policies are developed at the head office and implemented at all the branches. All the processes have been standardized across all the regions that it operates. This is because the company believes that the banking industry uses similar concepts across all the regions. This concept has been important for the organization in terms of developing strong policies and monitoring of the operations of the company. Supervision of the activities of the branches in different regions is also easy as the same strategies are used worldwide (Koichi, 2003). Advertisements also form one of the most important marketing strategies of the company. This has been done through collaboration with other companies from different parts of the world. The company collaborated with the Dubai and Sharja Airports in the UAE for the purpose of advertising it services. Through this collaboration, the logo of the company was branded on the air jets and air buses. The purpose of this advertisement was to ensure that the over sixty million passengers who use the airport recognize the company. Building the brand of the company is also important for the organization as it promotes the public image of the company. During this process, the management of the company recognizes the issues of cultural diversity in the world. Building the brand of the company has played a big role in the recognition of the company worldwide. Through this process, the customers from any part of the world can easily recognize the logo of the company and hence its popularity. It is through the marketing strategies of the company that the profits of the company have been increasing despite the harsh economic times. The local strategies have not been applied by the company as it believes in the standardization of the processes. However this issue is contentious due to the cultural diversity in different regions that may require the local strategies in order to penetrate deeper in the market (Solis, 2011). Decision Problem and Decision Maker Decision pressure The decision as to whether the company should adopt the localization of its operations in some regions depends on various factors. The decision pressure is caused by the high expectation in the Northern Africa region as well as the speed of implementation of the communication strategies. The pressure to make the decision may have both negative and positive outcome for the company. Knowing the situation is the most important thing for the company during the decision making. If the company is to switch to localization, it is important to know the consequences and hence solutions to any problems that may arise. On the other hand, if the company decides to stick to the global strategies it is important to know the outcome. Due to the impacts of the decision and the outcomes of the previous strategies used, it is important to make the most appropriate decision that will not affect the operations of the company or the generation of profits. Decisions made under pressure may not necessarily lead to a negative outcome provided the need for making the decision is clearly understood. However it is important for the organization to ensure that a wide consultation has been done so as to come up with the right decision (Bragge, 2010). Limits of Authority The managers in the case study are keen on the mater of globalization and localization. Their main aim during the decision making process is to ensure that the company is successful. However, the limit of authority during the decision making may impact negatively on the process. Although they have the authority to make decisions on behalf of the company, their authorities is limited. This is because their decision can be overruled by other senior managers as well as the directors. The team also has no powers to make the crucial decision but is supposed to come up with good reasons for their decision. The limit of authority may also prevent the team from exploring other alternatives during the decision making process. The limited power is therefore a factor that may affect the outcome of the process. This may lead to the wrong decision being made by the company. The limit of authority may also lead to the cancellation of the decisions made by the team. The company may argue that the team made decisions beyond the limits of their authority. The limit of authority is thus influential during the decision making and it may prevent the administrators from making crucial decisions that are likely to propel the Company to greater heights (Ehrgott, 2002). Decision Making Criteria According to Xu (2010), decision making criteria are useful to the team as well as the company as it determines how the decision will be made. The decision making criteria for the team will depend on various factors such as customer satisfaction, cost quality of services and the economy. Any decision made by the team will influence the criteria. The cost of localizing the operations may be low as compared to the global system that the organization is using. Making the decision of localization will thus have positive impacts on the company in terms of the cost. On the other hand, the economy has a direct impact on the localization of the company. The entry to the new markets is also directly dependant on the economy of the company and hence the determination of the decision to be made. However, in the event that the organization decides to continue using the global strategy, the cost will still be impacted. The ease of managing the company also depends on the strategies used by the multinational. Through the global strategy, it is easy to promote the brand of the company. The criteria used by the company therefore, have a direct impact on the company. This may also determine whether it is right for the company to make the changes or not (Forstmann, 2008). Marketing Environment Analysis SWOT analysis Strengths The company has various strengths that may work to its advantage as compared to the other companies in the sector. The company is financially stable as compared to other competitors. This means that it can be able to take any risks and still survive regardless of the consequences. The financial stability of the company can also enable it to invest in any strategy by availing the required resources. This means that the company can still localize its operations by investing heavily on the localization process. The popularity of the company is also a major strength. This is because the brand of the company is recognized worldwide and hence the ease of competing in any market environment. If the company localizes its operations, it will still benefit as its brand is recognized all over the world including the local market. The flexibility of the company is also important as it has the potential of dealing with customers from a diverse background. Weaknesses Despite the strengths of the company, some weaknesses are also present. The company has only invested in some particular regions. It may thus be difficult for the company to penetrate the new markets. Localization may thus be affected by this weakness as the company may face a lot of difficulties operating locally in the new market. On the other hand, the company has not developed adequate steps of dealing with hostile economic environment. This may also affect the company in the local environment incase it localizes its operations. Since the company has been using the global strategies, some of the managers are not conversant with the localization process which may present a challenge during the initial stages. The weaknesses of the company are however minimal and may not have a huge impact on the company incase it decides to localize. Opportunities Opportunities are also available for the company due to the high demand for banking services. Many institutions in the world are developing partnership with the banks for the purpose of development. The local people are also increasingly opening bank accounts and hence the demand for the banking services. Localizing the operations will play an important role in winning the confidence of the local people. On the other hand, new markets exist in Africa and other parts of the world. This is an opportunity for the company to invest in the new markets. The opportunities are thus important for the growth of any organization (Friesner, 2010). Threats The global economy is not performing well and this is a threat to the company. The banking sector always suffers greatly due to the global recession. This is because the banks depend on the economic growth for it to be successful. The localization of the company may also face threats arising from political unrest in some of the countries. The political unrest may destabilize the operations of the company and hence resulting to losses. The competition from the local companies is also a threat to the company. This may present a challenge to the company in the new markets and hence leading to the loss of revenue. Threats within the market environment have a negative impact on the performance of the company (Junfeng, 2011). Segmentation, Targeting and Positioning According to Kroening (2008), the process of segmentation is important for the organization before making the final decision. It mainly involved the process of identifying the potential customers. During the process, the market is analyzed and divided into different segments depending on its potential. The customers should be meaningful and should be in a position of adding value to the operations of the company. The local market has potential customers in most parts of the world. This is due to the growing demand of the banking services in the local market. The increased literacy levels have enabled the local people to know the importance of banking. However, this will require the company to localize the processes so as to penetrate deeper in the local market. The local people also have more trust on the institutions that are localized as compared to the globalized strategies. Targeting is the next important step after the segmentation process. This mainly involves the determination of which market to enter. This process should be done carefully based on the results of the segmentation. The market with he highest potential should be given the first priority as it will yield good results. Targeting the new markets in the Africa and other continents may yield positive results for the company. It is also significant to note that the cost of operations in Africa is low as compared to other continents. The governments in Africa are also interested in partnering with the banks for the purpose of steering development projects. This is an important step for the company and it will definitely require localization. This is due to the framework that the individuals and governments may require for the purpose of their operations. The positioning process mainly involves the implementation of the brand and strategies of the company within the chosen location. This process may also involve advertising the products and services of the company within the chosen localities. It is thus important for the company to promote its brand in the hosen areas for the purpose of creating awareness. During this process, the deep penetration in the local market depends on how well the company will position itself. Winning the customers in the local market may be difficult incase of poor strategies and positioning. It is for this reason that the localization is required as its principles are flexible and addresses the needs of the local people. The awareness of the customers concerning the products of the company plays a critical role in the growth within the chosen segment (Shimizu, 2009). Marketing Mix Strategies The marketing mix strategies play an essential role during the marketing process according to Opricovic (2007). This is because it defines the suitability of the marketing process in relation to the goods and services of the company. This process is usually guided by the 4Ps which includes the product, price promotion and place. The product offered by the company is intangible and requires a lot of planning for the purpose of satisfying the customers. The need for the product in the local market is high and hence its ability to perform well in the local market. The use of localization is also important during the marketing process and it will be important to build the confidence of the customers. The pricing of the product also affects its demand. The company in this case must adjust the process so as to suit the local people and hence solving the problem of localization. In this case the pricing will also involve the interest rate for loans as the company will be required to offer loans. Localization strategies will also be important for the company in terms of addressing the needs of the local consumers. Affordability of the products depends on the pricing and hence the need for developing a proper pricing mechanisms. The local people may be discouraged if the price of the products is too high. This is because most of the local markets are still developing the locals may not be well off. The penetration of the company in the market thus depends on the pricing of the products of the company. Promotion of the products and services is also an important concept of the marketing mix. This will play an important role in solving the problem being faced by the company. This is because it will create an awareness about the product and hence its penetration in the local market. The promotion of the products and services of the company will ensure that the local people are aware of the products and services of the company. The place is the last concept of the marketing mix and it requires the company to locate its offices in areas that are accessible to the customers. The location will determine the ability of the company to penetrate deeper in the local market. A suitable location that is close to the customers will increase the accessibility of the products and services of the company. The issue of localization can thus be solved through the use of the marketing mix strategies (Solis, 2011). Recommendations It is thus recommended that the company should consider localization of its global brand for the purpose of penetrating deeper in the market. This is due to the advantages of localization of the strategies of the company as compared to the globalization. The products of the company are on high demand in the local market and therefore the company will perform well. However, in order to penetrate deeper in the market and to ensure that the products are consumed, localization is required. The localization process is also important in terms of winning the confidence of the customers and hence the deeper penetration. The company should also ensure that the interest rates on the loans are adjusted so as to make it fit in the local market. This will play an important role during the growth of the company. The local people will only be friendly to the business if the services offered by the company are affordable to them. The methods of payment should also be localized for the purpose of accommodating the local people. This is because the people in the local market may take long to pay for the loans depending on their financial status. Localization of the strategies of the company will also play an important role in attracting partnership with the local governments. This is because most governments in the local market prefer working with institutions that use local strategies. Aggressive advertisement of the product of the company should also be done locally. This is for the purpose of promoting the services of the company. The promotion of the products of the company should also be done using the local strategies. This is for the purpose of ensuring that the local customers are featured during the promotion of the products of the company. It will play an important role in developing the sense of ownership and hence promoting the brand of the company as well as the localization process. It is also important for the company to understand the cultural implications of the local people as it may affect the process of localization. The location of the company is also important in terms of ensuring that the local people can accesses it. This should be done after making a careful analysis of the market situation. The localization concepts should thus be adopted as it has more benefits to the company in the local areas as compared to the global strategies. Conclusion In conclusion, it is important to note that the performance of Hongkong and shanghai Banking Corporation in the global scene is admirable. This is due to the advantages that the company is enjoying over its competitors. However, the company is using the global strategy which has disadvantages in the local scene in some regions. Localization of the global strategies is possible and it will play an important role in the growth and development of the company. The local strategies will also be important for the company when venturing in the new markets. According to the market mix analysis, the company has a high chance of succeeding using the local strategies in some of the regions where the demand for its services is high. Bibliography Balci, F, et al, 2011, Acquisition of decision making criteria: reward rate ultimately beats accuracy, Attention, Perception, & Psychophysics, 73(2), 640-657. Bragge, J, 2010, Bibliometric Analysis of Multiple Criteria Decision Making/Multiattribute Utility Theory, IXX International MCDM Conference Proceedings Springer, Berlin 634: 259–268. Ehrgott, M, 2002, Multiobjective Combinatorial Optimization, Multiple Criteria Optimization, State of the Art Annotated Bibliographic Surveys. pp. 369–444. Friesner, T, 2010, History of SWOT analysis, Marketing Teacher. Forstmann, B, 2008, Striatum and pre-SMA facilitate decision-making under time pressure, Proceedings of the National Academy of Sciences 105.45 (2008): 17538-17542. Hastie, R, 2009, Rational choice in an uncertain world: The psychology of judgment and decision making, Sage Publications, Incorporated. HSBC, 2012, About HSBC, Retrieved on 17 November 2012, from, . Junfeng, W, 2011, SWOT Comparative Analysis of China's Automobile Finance Companies and Commercial Banks in the Automotive Consumer Market, Value Engineering, 22, 103. Koichi, S, 2003, Symbiotic Marketing Strategy, 4th edition, Souseisha Book Company. Kroening, D, 2006, Decision procedures, Springer. Opricovic, S, 2007, A fuzzy compromise solution for multicriteria problems, International Journal of Uncertainty, Fuzziness and Knowledge-based Systems, Vol. 15, No. 3, pp. 363–380. Shimizu, K, 2009, Advertising Theory and Strategies, 16th edition, Souseisha Book Company. Solis, B, 2011, Engage!: The Complete Guide for Brands and Businesses to Build, Cultivate, and Measure Success in the New Web, John Wiley & Sons, Inc. pp.201-202. Xu, X, 2010, Multi-criteria decision making approaches for supplier evaluation and selection: A literature review, European Journal of Operational Research, 202(1), 16-24. Read More