...Corporation (HSBC) was founded in Hong Kong and Shanghai in order to finance the growing trade between China and Europe. HSBC has it’s headquarter in London and enriches an international network which comprises around 6,200 offices in 74 countries and territories (HSBC, 2013). For decades, HSBC has grown and adapted to conquer the difficulties in China’s revolution and economic crises and now becomes the largest foreign bank in China. This essay combines core module theories and empirical case study to analyze HSBC’s strategy. In the first part, this essay will demonstrate how the strategy of HSBC changed, and compare the strategies before and after the accession to the WTO. The second part will discuss advantages and disadvantages of concentrating on rural areas and emerging markets. The influence of financial crisis, future opportunities as well as threats will be analyzed at last. 1. HSBC’ strategy and China accession to the WTO 1.1. The reason for changing strategy Down the decades, HSBC’s has grown and adapted their strategy from localization to globalization for China in order to react to the changes of economic reform and financial liberalization. HSBC differentiates its strategy from those competitors by describing the unique characteristics which is ‘The world’s local bank.’ Due to this position and strategy, HSBC is involved directly and indirectly in China's modern economic development and reform. HSBC’s strategy in China changed for several reasons. First, HSBC had an...
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...HSBC in China Case Analyses from Luthans & Doh, In-depth Integrative Case 4.1 Chander ZHU Dec. 2014 IBS_HSBC in China Hong Kong and Shanghai Banking Corporation was founded to finance the growing trade between Europe, India and China in Hong Kong March 1865 and month later in Shanghai. (King, 1987) With its longtime settled in China, HSBC is already member of top tier financial institutions operating in the biggest emerging market and been the largest foreign banking group in China. This essay is aiming to exam the strategy of HSBC revolution over the years in China, meanwhile to illustrate the HSBC’s strategy changed before and after China’s accession to the WTO. Then, the strategy of HSBC’s expands in China’s rural areas will be mentioned with both evaluation of advantages and disadvantages. Following, the strategy of HSBC on how to enter and operate in the other emerging markets will be discussed in terms of successful cases and setbacks. Finally, the influence from world economic crisis on HSBC and future potential opportunities for HSBC will definitely be focused on. Before the WTO accession in 2001, China’s banking industry...
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...Corporation Limited, HSBC for short, is a famous bank and financing institution, and enjoys a high reputation around the world. Thomas Sutherland, the founder of HSBC, realized a demand for local banking facilities in Hongkong and on the China coast. Hence, the Hongkong and Shanghai Banking Corporation was founded in 1865 and the first bank opened in Hong Kong in March 1865 and at the same year, the first branch opened in Shanghai. Nowadays, the business of HSBC is distributed in more than 100 countries and regions and HSBC has over 100 million customers all over the world. Chinese market is quite important and special for HSBC and Shanghai was chose by HSBC and opened the first branch in 1865. Although the founder was a Scot, HSBC still headquartered in Hong Kong until 1980s. In early stage, HSBC hoped to become the local bank of China and gave services to the clients all over the world but now, HSBC preferred to be a global bank to cater to Chinese. Therefore, the China strategy is crucial for HSBC. The China strategy of HSBC can be divided into three stages, which was before Oct, 1949, before China’s accession to the WTO and after China’s accession to the WTO. In the middle of the 19th century, more and more British merchants came to China to do business but Qing government lacked banks or financing institution. Mr. Sutherland recognized the demand and founded HSBC to give services to the Brutish merchants and Chinese merchants. HSBC considered that China was a potential market...
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...International Dimensions of Business HSBCs ascent into China. Word Count excluding references and table of contents: 3354 Business Management Contents Aims 3 1. Introduction 3 1.1 HSBC and China 3 1.2 Foreign Activity 4 1.3 HSBC in China 5 2. Chinese Business Environment 5 2.1 PEST Analysis 6 Political- Communism and World Trade Organisation Membership 6 Economical - High levels of FDI and a strong economy 8 Social- Education and Ageing Population 10 Technological- Accessibility 11 2.2 Analysis of the Chinese banking industry 11 2.3- Porter’s Five Force analysis 12 2.4 Culture Analysis 15 3. Mode of Entry 18 3.1 Reasons for mode of entry. 18 3.2 International Theory 18 4 - Conclusion 20 References 20 Aims This report will look at banking giant HSBCs entry into mainland China. The aim is to 1. Provide a brief outline of HSBCs entry into china, including background information on HSBC and China and take a look at the nature and location of HSBCs foreign activity. 2 Identify and analyse the main characteristics of the business environment in China that are likely to have influenced HSBCs decision to operate there. 3 Evaluate the factors that HSBC took into account when choosing its mode of international entry into China. 1. Introduction Globalisation has interconnected the world and is seen by some as an evolutionary process, although it does have its critics. Expansion into foreign markets is as a must for big businesses if they want to...
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...Bus 162 Team 7: HSBC in China 1. How has HSBC adapted its global strategy to operate in China, both before and after China’s WTO accession? Answer: Prior to the WTO accession negotiations, China’s banking industry operated as a cog in China’s centrally planned economy. The banks adhered to directed lending practices from the government and in turn created some of China’s most successful enterprises, but also supported thousands of other inefficient and unprofitable stateowned enterprises. This practice left state commercial banks with massive amounts of debt that was largely unrecoverable and hordes of nonperforming loans. In 1865, HSBC was founded to finance the growing trade between Europe, India, and China. HSBC rapidly expanded by opening agencies and branches across the globe, but maintained a distinct focus on China and the Asia-Pacific region. By the 1880s, the bank issued banknotes and held government funds in Hong Kong, and also helped manage British government accounts in China, Japan, Penang, and Singapore. After World War I and II, HSBC turned to dramatic expansion through acquisitions and alliances in order to diversify. The bank moved its headquarters in 1993 to London from Hong Kong and continued its global acquisition strategy. In December 2001, China finally acceded to the World Trade Organization (WTO). A number of policies were immediately implemented such as foreign banks were allowed to conduct foreign currency business without any market access restrictions...
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...three years, HSBC Holding plc’s profit before tax was 18,680, 22565, and 20649 million dollars respectively. Asia’s profit before tax was 14,625, 15853, and 18030 million dollars respectively. This proportion of Asia’s profit was as high as 78.3%,70.3%, and 87.3%. Therefore, i can believe that HSBC bank’s major profit from Asia. [1] Table 1 shows the profit before tax of geographical regions [pic][2] Why we has goal in Asia? According to the above table, we can see that Asia had the extremely high profit before tax compared to other parts of world. Also, Asia is the region which has the largest number of developing countries in the world. Such as China, India, Indonesia, and Malaysia. Especially, with China’s economic reform deeply, there has more investment opportunities will emerge. Why we hasn’t goal in Middle East and North Africa? We also can found Middle East and North Africa had a continued momentum of increased. But, we still made a decision we hasn’t goal in Middle East and North Africa. There has two reasons, the first reason is there has low level of economic. The second reason is local political instability increases investment risk. Strategic Options and choices In order help HSBC Holding plc to meet the goals and objectives, three strategies, expansion in China, restore customer confidence, product and service development in the next five years. Below are the details of these three strategies: Expansion in China In China, real GDP growth...
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...Benefits HSBC strategic operations have reflected a global world view that has offered the bank tremendous opportunities for growth as seen by the growth in developing markets (HSBC.com, 2016). The profitability of developing countries has surpassed profits for developed markets such as USA and Europe. An illustration of the same can be seen by the asset and profit ratio in developed markets and developing markets which show positive numbers in terms of profit (Morris and Liu, 2015). Another benefit to operating in the emerging markets is the opportunity to tap into the wealth management industry. The banks origin in Hong Kong coupled with the presence of an already established wealth market in the region makes an opportunity for the bank to acquire more clients. HSBC’s has also taken advantage of its diverse cultural image and reduced cost of wages to outperform its operations in developed markets (HSBC.ca, 2011). The cost of running its operations in developing countries such as Brazil, Singapore, India and Thailand is much lower than in Europe. The reason for cheaper operations cost is as a result of reduced remuneration cost in areas of developing countries in comparison to the already developed countries. The risks associated with the bank include the inconsistent application of policies and regulations in the new markets (Henning, 2016). The problem of acquiring licenses in the developing markets poses a challenge to the bank (Wildau, 2016). The bank has also faced the problem...
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...example in this case study – recognise that they can only stand out in a tough sector by competing on an international scale. This increasingly means doing business in high-growth emerging markets like China and leveraging RMB to gain that vital competitive advantage. Background Telco, with its Head office based in London, began life as a manufacturer of wire-line equipment for the Western European aerospace sector. Following the privatisation of national telecoms operators from the late 1980s, it refocused its business to supply carriers in Europe and the US. Telco has been an HSBC client for more than ten years, after finding that domestic banks could not match its international expansion strategy. HSBC’s global network supported its exports growth across new markets by supporting all Telco’s export invoices. Rolling waves of telecoms deregulation saw Telco and other suppliers enter the mobile handset market in the 1990s, attracted by the significant growth opportunities. The intense competition and tightening margins in equipment supply – not least the demand from emerging markets – saw Telco make its first trip to China on a sourcing mission for basic components. Building a business In China At the company’s request, HSBC relationship managers helped guide Telco’s entry into China by working with professional advisors in the Far East to design a tailored business structure and business strategy. The bank also nominated a local Chinese relationship manager to ensure its business...
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...Is Argentina a good bet for HSBC, or should they shut down operations and invest more aggressively in fast growing china? The year 2001 was disastrous for HSBC. It lost over $1.1 billion due to Argentina's economic problems compared to their profit in previous year of $324. It was forced to rethink loans and to decide if the political and economic instability in Argentina was worth the risk of continuing operations there. The company managed to beat the financial crisis of 2007-2009 only by raising additional capital from shareholders, offering high-quality products and services to customers, and increasing operating income. Because HSBC is one of “the ten largest banks in terms of overall market share in foreign-exchange trading,” it did not have to obtain a government bailout to stay in business. In spite of this, Argentina is still a small market compared to faster-growing nations in Asia, so the firm should be very careful in its decision to remain in the country. Even former chief executive Keith Whitson agreed that the company should not continue to invest in Argentina, one reason being the devaluing of the peso. In addition to it, the rigid government policies make it a country that is very volatile to crisis, which is not good for HSBC. It is apparent that HSBC is controlling neither money market nor the fiscal policy. They are just doing business and becoming the victims of situation. HSBC should continue to be cautious in its approach to increased investment in Argentina...
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...growth markets HSBC Holdings plc UK HSBC Latin America Holdings (UK) Limited HSBC North America Holdings Inc. HSBC Latin America BV HSBC Bank Canada The Hongkong and Shanghai Banking Corporation Limited HSBC Bank (China) Company Limited 99% HK HSBC Investments (North America) Inc. HSBC Bank Argentina S.A. HSBC Bank Australia Limited HSBC Finance Corporation USA HSBC Bank Brasil S.A. HSBC Securities (USA) Inc. Bank of Communications Co., Limited (‘BoCom’) HSBC Bank Egypt S.A.E. 94% HSBC Bank Malaysia Berhad 19% PRC HSBC Private Banking Holdings (Suisse) SA HSBC Bank plc UK HSBC Private Bank (Suisse) SA The Saudi British Bank 40% HSBC Bank (Taiwan) Limited HSBC Bank (Vietnam) Limited HSBC Bank Middle 80% East Limited Germany 99% HSBC Mexico S.A. HSBC USA Inc. HSBC Bank USA, N.A. Hang Seng Bank Limited HSBC Bank A.S. 62% MENA3 HK HK Turkey Hang Seng Bank (China) Limited 99% HSBC France 99% 99% HSBC Seguros S.A. HSBC Trinkaus & Burkhardt AG HSBC Insurance (AsiaPacific) Holdings Limited Hang Seng Insurance Company Limited HSBC Seguros (Brasil) S.A. Mexico HK HSBC Vida e Previdência (Brasil) S.A. HSBC Life Insurance Company Limited HSBC Insurance (Singapore) Pte. Limited HSBC Life (UK) Limited ...
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...OVERVIEW About HSBC BANK Headquartered in London, HSBC is one of the largest banking and financial services organizations in the world. HSBC's international network comprises around 9,500 offices in 85 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With listings on the London, Hong Kong, New York, Paris and Bermuda stock exchanges, shares in HSBC Holdings plc are held by around 200,000 shareholders in some 100 countries and territories. The shares are traded on the New York Stock Exchange in the form of American Depositary Receipts. Through an international network linked by advanced technology, including a rapidly growing e-commerce capability, HSBC provides a comprehensive range of financial services: personal financial services; commercial banking; corporate, investment banking and markets; private banking; and other activities. History The HSBC Group has an international pedigree which is unique. Many of its principal companies opened for business over a century ago and they have a history which is rich in variety and achievement. The HSBC Group is named after its founding member, The Hong Kong and Shanghai Banking Corporation Limited, which was established in 1865 to finance the growing trade between China and Europe. After the British established Hong Kong as a colony in the aftermath of the First Opium War, local merchants felt the need for a bank to finance the growing trade between China and Europe (with...
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... Finally these stocks are selected as our trading gap trading objects: 0005.hk(HSBC HOLDINGS);00031.hk(CHINA AEROSPACE);0700.HK(TENCENT);00027.HK(GALAXY ENT) and 0040.HK(GOLD PEAK); Here are some introduction about them and some simple analyses will be give along with their stock price this year (from June). 0005.hk(HSBC HOLDINGS): Introduction HSBC Holdings plc is a British multinational banking and FINANCIAL services company headquartered in London, United Kingdom. It is the world's fourth largest bank. It was founded in London in 1991 by the Hongkong and Shanghai Banking Corporation to act as a new group holding company. The origins of the bank lie in Hong Kong and Shanghai, where branches were first opened in 1865. The HSBC name is derived from the initials of the Hongkong and Shanghai Banking Corporation. As such, the company refers to both the United Kingdom and Hong Kong as its "home MARKETS". HSBC has around 6,600 offices in 80 countries and territories across Africa, Asia, Europe, North America and South America, and around 60 million customers. As of 31 December 2013, it had total assets of $2.671 trillion, of which roughly half were in Europe, the Middle East and Africa, and a quarter in each of Asia-Pacific and the Americas. As of 2012, it was the world's largest bank in terms of assets and sixth-largest public company, according to a composite measure by Forbes magazine. HSBC is organised within four business groups: Commercial Banking; Global Banking and...
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...------------------------------------------------- Charoen Pokphand Group buys share of Ping An from HSBC Holdings Plc Critical Strategic Analysis Prepared for: Mr. Sheikh Morshed Jahan Associate Professor Course Instructor: Business Strategy (W501) Prepared by: Tabassum Jahan RH 59 Batch 18 Bachelor of Business Administration Institute of Business Administration (IBA) University of Dhaka September 24, 2013 What Happened * December 5, 2012 | : HSBC announced that HSBC Insurance Holdings and the Hong Kong and Shanghai Banking Corporation Limited, two indirect wholly-owned subsidiaries of HSBC Holdings plc, would sell their entire shareholdings in Ping An Insurance Co. , China’s biggest private insurer, to the Thailand-based Charoen Pokphand Group (CP Group) at 59 HK dollars per share. | * February 1, 2013 | : Wholly owned subsidiaries of the Charoen Pokphand Group Company Limited received regulatory approval from the China Insurance Regulatory Commission (“CIRC”) to purchase the Ping An Insurance’s shares. The 4 buyers are indirect wholly-owned subsidiaries of CP Group - All Gain Trading Ltd, Bloom Fortune Group Ltd, Business Fortune Holdings Ltd and Easy Boom Developments Ltd. | The whole 15.6% stake was sold for $9.38 billion. HSBC group has already made a $1.9 billion paper profit on the deal as a result of Ping An’s shares being a fifth higher than the HK$59.00 ($7.61) that it agreed to pay. Concerned parties About HSBC HSBC Holdings plc was founded in London in 1991 as a British multinational...
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...Diligence Investigation 5 1.2.3 Risk of lending to SMEs and Derivative Deposit problems 5 1.2.4 Risk of collateral assets auctions 6 2.0 Analysis on internationalization of operation overseas 6 2.1 Key factors identification and comparison 6 2.1.1 Operation efficiency on ROA and ROE perspective 6 2.1.2 Operation scale and scope 7 2.2 Government potential influence on policies and regulation 8 2.3 Challenge and Risk based on the analysis 8 2.3.1 Strategic partnership with developed bank 8 2.3.2 Human Resource management 8 3.0 Analysis on internationalization of interest rate liberalization 8 3.1 Government potential influence on policies and regulation 9 3.2 Comparison between Chinese Mainland banks and HSBC 9 Conclusion 9 Appendices 11 Reference 13 Introduction From 2013, the trend of catching up with international standard and increasing Chinese banking competitiveness is under the agenda of PBOC through the frequent policies transformation and the corresponding applications with more focusing on risk generated by shadow banking and internet finance. As a result, after experiences of liquidity problem in the interbank overnight lending market twice in 2013, and corresponding to the requirement of the Basel III, Chinese Mainland banks needs to have taken some necessary steps on the way of internationalization of the capital...
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...References. RESEARCH PROPOSAL The Hong and Shanghai Bank Corporation Recruitment and SELECTION PROCESSES, COMPARISON AND DEVOLPMENT BETWEEN THE UNITED KINGDOM AND BANGLADESH. Background: HSBC was born from one small idea – a local bank serving local needs. In March 1865 HSBC opened its doors for business in Hong Kong and today it welcomes customers across the globe as the World’s Local Bank. Back to top HSBC is named after its founding member, The Hong Kong and Shanghai Banking Corporation Limited, which was established in 1865 to finance the growing trade between Europe, India and China. The inspiration behind the founding of the bank was Thomas Sutherland, a Scot who was then working for the Peninsular and Oriental Steam Navigation Company. He realised that there was considerable demand for local banking facilities in Hong Kong and on the China coast and he helped to establish the bank which opened in Hong Kong in March 1865 and in Shanghai a month later. Soon after its formation the bank began opening branches to expand the services it could offer customers. Although that network reached as far as Europe and North America, the emphasis was on building up representation in China and the rest of the Asia-Pacific region. HSBC was a pioneer of modern banking practices in a number of countries - for instance, in 1888 it was the first bank to be established in Thailand, where it printed the country’s...
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