Capitalizing for the Future: HSBC in 2010 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Capitalizing for the Future: HSBC in 2010
Following the financial crisis of 2007/2008, HSBC CEO Michael Geoghegan saw a fundamental change in global opportunities and risks. With increasing regulation and fierce competition between banks, the Western hemisphere was going to be a tougher place to do business. Emerging markets, however, offered many opportunities. Geoghegan reasoned that in HSBC's case, a turn to emerging markets would be a return to its roots and to managing risks that it knew. But HSBC needed to understand what the implications of the new strategy-"moving to emerging markets"-were for its portfolio and overall risk profile. Especially, how should HSBC reallocate capital freeing up in the West across its diverse geographies and business lines?
Swot Analysis of "Capitalizing for the Future: HSBC in 2010" written by Anette Mikes, Dominique Hamel includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hsbc Geoghegan facing as an external strategic factors. Some of the topics covered in Capitalizing for the Future: HSBC in 2010 case study are - Strategic Management Strategies, Competitive strategy, Corporate governance, Emerging markets, Financial management, Recession, Risk management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Capitalizing for the Future: HSBC in 2010 casestudy better are - – cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, geopolitical disruptions, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China,
increasing energy prices, there is backlash against globalization, etc
Introduction to SWOT Analysis of Capitalizing for the Future: HSBC in 2010
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Capitalizing for the Future: HSBC in 2010 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hsbc Geoghegan, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hsbc Geoghegan operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Capitalizing for the Future: HSBC in 2010 can be done for the following purposes –
1. Strategic planning using facts provided in Capitalizing for the Future: HSBC in 2010 case study
2. Improving business portfolio management of Hsbc Geoghegan
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hsbc Geoghegan
Strengths Capitalizing for the Future: HSBC in 2010 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hsbc Geoghegan in Capitalizing for the Future: HSBC in 2010 Harvard Business Review case study are -
Training and development
– Hsbc Geoghegan has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Capitalizing for the Future: HSBC in 2010 Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Highly skilled collaborators
– Hsbc Geoghegan has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Capitalizing for the Future: HSBC in 2010 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Hsbc Geoghegan digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hsbc Geoghegan has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Operational resilience
– The operational resilience strategy in the Capitalizing for the Future: HSBC in 2010 Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Low bargaining power of suppliers
– Suppliers of Hsbc Geoghegan in the sector have low bargaining power. Capitalizing for the Future: HSBC in 2010 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hsbc Geoghegan to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Hsbc Geoghegan is present in almost all the verticals within the industry. This has provided firm in Capitalizing for the Future: HSBC in 2010 case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to recruit top talent
– Hsbc Geoghegan is one of the leading recruiters in the industry. Managers in the Capitalizing for the Future: HSBC in 2010 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Hsbc Geoghegan has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Analytics focus
– Hsbc Geoghegan is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Anette Mikes, Dominique Hamel can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Effective Research and Development (R&D)
– Hsbc Geoghegan has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Capitalizing for the Future: HSBC in 2010 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Hsbc Geoghegan are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Sustainable margins compare to other players in Finance & Accounting industry
– Capitalizing for the Future: HSBC in 2010 firm has clearly differentiated products in the market place. This has enabled Hsbc Geoghegan to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Hsbc Geoghegan to invest into research and development (R&D) and innovation.
Weaknesses Capitalizing for the Future: HSBC in 2010 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Capitalizing for the Future: HSBC in 2010 are -
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Hsbc Geoghegan supply chain. Even after few cautionary changes mentioned in the HBR case study - Capitalizing for the Future: HSBC in 2010, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hsbc Geoghegan vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Hsbc Geoghegan is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Hsbc Geoghegan needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hsbc Geoghegan to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Hsbc Geoghegan, firm in the HBR case study Capitalizing for the Future: HSBC in 2010 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Hsbc Geoghegan has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Products dominated business model
– Even though Hsbc Geoghegan has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Capitalizing for the Future: HSBC in 2010 should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Hsbc Geoghegan has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
No frontier risks strategy
– After analyzing the HBR case study Capitalizing for the Future: HSBC in 2010, it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Interest costs
– Compare to the competition, Hsbc Geoghegan has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Capitalizing for the Future: HSBC in 2010 HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Hsbc Geoghegan has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Hsbc Geoghegan has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Capitalizing for the Future: HSBC in 2010, it seems that the employees of Hsbc Geoghegan don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Opportunities Capitalizing for the Future: HSBC in 2010 | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Capitalizing for the Future: HSBC in 2010 are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hsbc Geoghegan can use these opportunities to build new business models that can help the communities that Hsbc Geoghegan operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Hsbc Geoghegan to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Loyalty marketing
– Hsbc Geoghegan has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hsbc Geoghegan to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Hsbc Geoghegan to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hsbc Geoghegan can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Capitalizing for the Future: HSBC in 2010, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hsbc Geoghegan can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Hsbc Geoghegan can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Learning at scale
– Online learning technologies has now opened space for Hsbc Geoghegan to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hsbc Geoghegan in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– Hsbc Geoghegan can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Building a culture of innovation
– managers at Hsbc Geoghegan can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Finance & Accounting segment.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hsbc Geoghegan in the consumer business. Now Hsbc Geoghegan can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hsbc Geoghegan is facing challenges because of the dominance of functional experts in the organization. Capitalizing for the Future: HSBC in 2010 case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Capitalizing for the Future: HSBC in 2010 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Capitalizing for the Future: HSBC in 2010 are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hsbc Geoghegan in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Hsbc Geoghegan in the Finance & Accounting sector and impact the bottomline of the organization.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Hsbc Geoghegan needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Consumer confidence and its impact on Hsbc Geoghegan demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Hsbc Geoghegan business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Capitalizing for the Future: HSBC in 2010, Hsbc Geoghegan may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hsbc Geoghegan can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Hsbc Geoghegan is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Hsbc Geoghegan needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.
Technology acceleration in Forth Industrial Revolution
– Hsbc Geoghegan has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Hsbc Geoghegan needs to keep up with the evolution of technology in the Finance & Accounting sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hsbc Geoghegan can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Capitalizing for the Future: HSBC in 2010 .
High dependence on third party suppliers
– Hsbc Geoghegan high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing wage structure of Hsbc Geoghegan
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Hsbc Geoghegan.
Weighted SWOT Analysis of Capitalizing for the Future: HSBC in 2010 Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Capitalizing for the Future: HSBC in 2010 needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Capitalizing for the Future: HSBC in 2010 is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Capitalizing for the Future: HSBC in 2010 is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Capitalizing for the Future: HSBC in 2010 is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Hsbc Geoghegan needs to make to build a sustainable competitive advantage.