MANAGEMENT AND CHANGEBehavioural Theory- HSBC has a participative approach where stakeholders are encouraged to provide input into decision making employees are seen as an asset to the business and a lot of energy is placed in finding, retaining and motivating them.Political- The need for negotiation, bargaining, building of support bases and strong leadership to maximise performance and manage conflict and changeContingency – HSBC management responds to changing circumstances swiftly in order to remain successful and competitive.
External Influences:Cultural diversity: HSBC operates in 77 countries and territories around the world each with different languages, tastes, religions and business practices. Aims to highlight cultural trends and varying customs. Corporate social responsibilities: If it does not demonstrate CSK then it may lose confidence of its increasingly self conscious stakeholderInternal Influences: New business cultureGlobalisation and technological development have contributed to a new business culture within HSBC. Structural responses to change??? Outsourcing-HSBC has appointed WPP to provide its creative advertising, media and direct marketing services worldwide. HSBC would be better served from a single marketing agency.
??? Flatter business structures- Business structure has generally flattened, leading to a fewer layers of middle management and a corresponding widening of the span of control. Advantages:- Lead to job enrichment and enlargement- Improving communication and problem solving Disadvantages:- Lead to a loss of employee motivating as gaining promotion becomes more difficult??? Strategic alliances and networks-HSBC has undertaken an agreement with the international ???Travelex??™ company, which is mutually beneficial. HSBC allows travelex to operate its own foreign currency units within selected HSBC branches. HSBC has thus widened its services to customers using the expertise of travelex and gained an advantage over its competitors. Creating Change: 1. Identifying the need to changeTechnological advancement, deregulation of the financial industry and increasing competition in the finance industry were the indicators to the management of HSBC of the need to change. Management decided that in order to remain successful, rapid expansion and adoption of new technology was vital. 2.
Setting achievable goalsThe ultimate aim for HSBC was to be a successful international bank with a local output which maximised shareholder returns. 3.Creating a culture of changeIn creating change at HSBC, management adopted the teamwork approach to change. HSBC has highlighted the importance of team structures in its latest five year strategic plan. Teamwork combined with a collaborative management style has contributed to the success of creating a culture of change at HSBC. MARKETINGThe market research process that HSBC uses includes:1.
Identification of needs2. Collection of primary and secondary data3. Data analysis and interpretation 4. Modification of strategies or plans Market research has provided HSBC with information on: ??? Types of customers likely to use HSBC (consumer, business, government) and their needs??? Changes in customers behaviour or needs??? Factors influencing customer decisions and the buying processSpecific marketing strategies include more proactive marketing, continual development of the HSBC brand and building an ethical sales and marketing culture throughout the group Market segmentation allows HSBC to develop products to meet the needs of each target group. HSBC??™s market is divided both geographically (location) and by customer groups (differentiated, demographic and niche). Examples:Differentiated- HSBC provides its ???Premier??™ range of services for its high net worth customers.Demographic- HSBC responds to changing demographics in selecting target markets, for example it is increasing the services it provides for retirees as a response to ageing populations.
Nice- HSBC looks for niche marketing opportunities PositioningHSBC positions itself in relation to its competitors by highlighting that it is both a local and worldwide organisation HSBC markets itself as ???The word??™s local bank??™. HSBC also positions itself as a socially responsible organisation contributing a lot of time and money to charitable organisations worldwide with a focus on the environment and on education. MARKETING MIX-THE 4psProduct and Service1. Personal financial services ??? E-banking services??? Innovative new products are developed and offered by HSBC to widen the product range offered, satisfy identified niche markers and to have a competitive edge. 2.
Consumer Finance??? HSBC lends money and provides related services to people who do not qualify for loans from banks3. Commercial Banking??? HSBC sells products and services to small and medum-sized enterprises, from sole traders and partnerships to incorporated businesses and publicly listed companies. ??? HSBC business internet banking is provided and is increasing 4.
Private Banking??? Financial services are provided to high net-worth clients??? Internet private banking is provided is increasing BrandTHE HSBC brand is now recognised around the world and the Bank continues to develop it. In 2005, HSBC was rated as the 29th most valuable global brands following its inclusion on the list of top 50 brands in 2003. PriceHSBC uses a range of pricing strategies. Interest rates are market based reflecting the supply and demand for funds. Interest rates differ according to risk, the greater the risk to the Bank of the customer defaulting on the loan the higher the interest rates. HSBC-Australia has moved increasingly to differentiated-pricing since 2002 for its most loyal customers. PROMOTION HSBC use both above the line and below the line promotional strategies.
Above the line promotional strategies include paid advertisements such as TV and print media options. -Online adverting via ninemsn and locally advertises on free to air networks 7,9,19 and on cable televison. Below the line marketing- ??? Direct mail marketing involves sending advertisements to reach a selective customer base via the bank??™s mailing list.
For example, advertisements inserted with customer bank statements. ??“permits high market selectivity which is personalised and flexible. Commercial Sponsorships:SportsCommunity SponsorshipEducationEnvironment PLACE/DISTRIBUTIONCustomer relationship marketing-HSCBS works to deliver its products to clients in the manner that the clients choose.HSBC??™s products are distributed at bank braches, directly to customer??™s homes or offices and increasingly to wherever the customers may be roaming if technology permits.
HSBC encourages customers to use the internet as it is the most cost-effective delivery channel. SOCIAL AND ETHICAL ISSUES??? Takes great care to ensure communications to customers are not misleading and are easy to understand, accurate, fair and unbiased??? Does not seek to mislead customers, seek to mislead customers, sell inappropriately, or hide unfair or significant terms in the small print of it product literatureEMPLOYMENT RELATIONSShareholders:HSBC has around 200,000 registered shareholders in 100 countries worldwide. As labour. Shareholders are interested in employment issues and employment indicators. Customers:HSBC estimates it has 110 million customers worldwide with a total e-customer base of almost 20 million.
HSBC conducts regular surveys to monitor customer satisfaction and gauge the effectiveness of its employees in satisfying their requirements. Employees:HSBC employs over 250,000 people worldwide. HSBX has approximately 1,400 full time employees. In Australia, only 20% of the private sector workforce is unionised and union membership is not large at HSBC. HSBC has around 200,000 registered shareholders, many of whom are interested in employment issues and recognise that employees are they key to a successful service business and are interested in labour indicators and the cost of labour.