Long-term Goals/Objectives
Goal #1: Increase profit before tax over the Next 5 Fiscal Years from 2015 to 2019 by 40% in Asia.
In the past 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 slowed from 7.7% in 2013 to 7.4% in 2014, largely due to a slowdown in activity in construction and manufacturing investment which was only partially offset by resilient infrastructure investment. Headline annual CPI inflation fell steadily to 1.5% in December, significantly below the government’s target of 3.5%. The People’s Bank of China eased monetary policy in November by cutting policy interest rates for the first time since July 2012. The one-year deposit rate was lowered by 25bps to 2.75% and the one-year lending rate by 40bps to 5.6%. Further measures were announced in December to support bank lending and spur economic activity.[3] In addition, According to the National Bureau of Economic Statistics, in 2011 China's urban population exceeded its rural population for the first time in the country's history, at 690 million people versus 656 million, respectively. China's urbanization made the country's impressive economic growth over the past 10 years And China will continues to urbanize. It's taken thirty years for China's population to be more urban than rural, and it's expected that China has another 20 years or more of urbanization ahead of it.[4]
Table 2 shows the China’s urbanization rate in 2008-2013
[pic][5]
According to above data, we can know that China’s economy type is belong to government driven economy. With China’s economic reform deeply, there are more investment opportunities will emerge in various industries. If HSBC bank can own enough market share in the future. We can believe that HSBC’S profit will be rapid growth in the next five years. Therefore, HSBC bank need to set its business as early as possible in the second and third tier cities. its brand advantage and big cash flow advantage will help HSBC bank work better.
Table 3 - Pros and Cons of expansion in China
|Pros |Cons |
|More market share |Increase cost |
|More profit in next few years |More competitors |

Restore customer’s confident
In the recently year, negative news of tax evasion always haunt the HSBC bank. Few days ago, the French financial state prosecutor has requested that HSBC’s Swiss private bank be sent to criminal trial over a suspected tax-dodging scheme for wealthy customers.[6] if HSBC bank can not eliminate the negative news early, it will effects HSBC bank set its business in the Asia since HSBC will difficult to get the trust of the government and customer.
Table 4 - Pros and Cons of restore customer’s confident
|Pros |Cons |
|Get the customer confident |Pay high penalty |
|Own government trust | |

Product and service development
In HSBC bank, the global private banking was the weak business in China.
Table 5 shows the profit of China.
[pic][7]
According the table , we can found that the global private had negative profit in 2014. Therefore, developing the global private banking is imminent work for HSBC bank. With China’s finance market reform deeply, more and more people wish invest in other countries finance markets so that they can make their assets value rise. It provides a good opportunity for HSBC bank to creates create a platform for investment. In this platform, HSBC can offer other countries’ good investment project which conform to these high level customer’s risk tolerance. According the HSBC Annual Report and Accounts 2014, HSBC bank already become the first foreign custodian bank to service renminbi qualified foreign institutional investors based in Singapore and South Korea. Also, it became a member of the Shanghai Gold Exchange’s international board, a newly established trading platform connecting mainland China’s gold market to global investors. In addition, HSBC bank received regulatory approval to be one of the first market makers to directly trade renminbi, euro and Singaporean dollars in China’s interbank foreign exchange.[8] If HSBC bank can own more finance authorization by China government, we can believe that the profit of Asia curve should be steep upward.
Table 6 - Pros and Cons of product and service development
|Pros |Cons |
|More market share |Increase cost for security |
|High profit | |

According our analysis, we proposed to take all strategies that we mentioned above. First of all, There are no conflict between these three strategies. Second, all of them have low risk. Third, all of these strategies can help HSBC bank get great benefit. Therefore, we will take all strategies to help HSBC bank achieve goal.

Table 7– Choice of Strategic Options
|Strategy |Implement? |
| Product Development |⎫ |
| Restore customer’s confident |⎫ |
| Expansion in China |⎫ |
| | |
| |⎫ |
| | |
| |⎫ |
| |⎫ |
| |⎫ |
| |⎫ |
| |ξ |
| |⎫ |

Action plan
Year 2015
As the first year, HSBC bank need build 100 HSBC outlets, 36 HSBC rural bank outlets and 50 Hang Seng Bank outlets in the second tire city at the end of the year. Then, they need find the solutions with the court as soon as possible in order to restore the reputation. In addition, HSBC bank should own more finance authorization through China government.

Year 2016
In the second year, HSBC bank should own some market share and some reputation in China. In this year, the biggest challenge is compete to other local bank and international bank. HSBC bank should offer the best product and service to customer so that they can keep the market share rise.

Year 2017
Once again, HSBC bank should open 80 HSBC outlets, 20 HSBC rural bank outlets and 25 Hang Seng Bank outlets in third tire city at the end of the year. Also, HSBC bank continue use the high quality service to maintain high competitive so that it can gain more market share.

Year 2018
In the fourth year, customer product problem will coming in this year since most finance products’ maturity period is 3- 4 years. Such as, real return is below to expect return, finance product make customer loss money. If HSBC bank can not deal with these problem, it will effect its future profit.

Year 2019
In the final year, all the products sells and market share is belong to stable. Therefore, we also predicted HSBC bank’s profit in Asia should increase by 10%.

Measure and evaluation of performance
Once the goals and objectives have been set, the next step is to build a performance measurement system to track on the progression in achieving the goals and objectives. Measuring and evaluating performance is so important and necessary that it gives the management the vital information about what’s happening at the moment.[9]

During the whole measuring process, if HSBC bank fail to achieve certain goals or processes, they should find out the reason behind the failure as soon as possible; trying to prevent the same problem again and adjust the strategic action plan to pull things back to the right track. Below are the criteria for measuring HSBC bank goals and objectives over the next five years:

Goal #1: Increase profit before tax over the Next 5 Fiscal Years from 2015 to 2019 by 40% in Asia.
Since the total objective over the next five years is to have a growth of 40% in terms of profit before tax in Asia, HSBC bank should expect an 8.78% growth rate for each year from fiscal 2015 to fiscal 2019 in theory. However, theory is theory; companies would rarely experience an equal growth rate over four to five years in reality. Therefore, HSBC bank should base on the measurement of financial performance of the current year to adjust the planned growth for the next year. For example, Since first year’s work will increase their cost; therefore, the first year profit before tax maybe only increase 4%. In order to competitive with other banks,the profit in Asia maybe rise 6%. Also, HSBC bank continue use the high quality service to maintain high competitive so that it can gain more market share. Therefore, In the third year, we predicted HSBC bank’s profit in Asia should increase by 10%. In the fourth year, HSBC bank’s profit in Asia should increase by 10%. In the final year, all the products sells and market share is tend to stable. Therefore, we also predicted HSBC bank’s profit in Asia should increase by 10%.
Table 8– Projection of profit before tax in Asia from 2015 to 2019
| |2015 |2016 |2017 |2018 |2019 |
|Growth Rate (%) |- |8.78 |8.78 |8.78 |8.78 |

References

HSBC Annual Report and Accounts.(2014). Retrieved from: http://www.hsbc.com/investor-relations Investing in China. (2015). Retrieved from Investopedia: http://www.investopedia.com/articles/07/invest_china.asp French prosecutor formally requests trial.(2015). Retrieved from Theguardian http;//www.theguardian.com/business/2015/mar/13/hsbc-swiss-private-bank-criminal-trial-request-france China urbanization rate.(2015). China urbanization rate. Retrieved from Baidubaike. http://wenku.baidu.com/link?url=tbttyEFE_M933lYwSgj5GJ2r9k6Tf3OgHStjxlsicL52ZRX-Gabe2m_AQA1KVgwPdLNCx7RjE2PK6QLPTH2F0mTWhe4iaye2dL8idlo943y Measure Performance and Set Targets.(2015) Retrieved from Info Entrepreneurs. http://www.infoentrepreneurs.org/en/guides/measure-performance-and-set-targets/ -----------------------
[1] HSBC Annual Report and Accounts 2014
[2] HSBC Annual Report and Accounts 2014
[3] HSBC Annual Report and Accounts 2014
[4] Investopedia. 2015. Investing in China
[5] Baidubaike.2015. China urbanization rate

[6] Theguardian.2015. French prosecutor formally requests trial

[7] HSBC Annual Report and Accounts 2014
[8] HSBC Annual Report and Accounts 2014
[9] Info Entrepreneurs. Measure Performance and Set Targets.