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 - – increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, technology disruption,
there is backlash against globalization, increasing transportation and logistics costs, 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 -
Strong track record of project management
– Hsbc Geoghegan is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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.
Superior customer experience
– The customer experience strategy of Hsbc Geoghegan in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
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.
Learning organization
- Hsbc Geoghegan is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Hsbc Geoghegan is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Capitalizing for the Future: HSBC in 2010 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
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 -
Skills based hiring
– The stress on hiring functional specialists at Hsbc Geoghegan has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow decision making process
– As mentioned earlier in the report, Hsbc Geoghegan has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Hsbc Geoghegan even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hsbc Geoghegan is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Capitalizing for the Future: HSBC in 2010 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
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.
Slow to strategic competitive environment developments
– As Capitalizing for the Future: HSBC in 2010 HBR case study mentions - Hsbc Geoghegan takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Capitalizing for the Future: HSBC in 2010, is just above the industry average. Hsbc Geoghegan needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Anette Mikes, Dominique Hamel suggests that, Hsbc Geoghegan is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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.
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 -
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.
Buying journey improvements
– Hsbc Geoghegan can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Capitalizing for the Future: HSBC in 2010 suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hsbc Geoghegan can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Hsbc Geoghegan can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Hsbc Geoghegan can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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.
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.
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.
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.
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.
Creating value in data economy
– The success of analytics program of Hsbc Geoghegan has opened avenues for new revenue streams for the organization in the industry. This can help Hsbc Geoghegan to build a more holistic ecosystem as suggested in the Capitalizing for the Future: HSBC in 2010 case study. Hsbc Geoghegan can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 -
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hsbc Geoghegan with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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.
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.
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 .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth 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.
Stagnating economy with rate increase
– Hsbc Geoghegan can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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.
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.
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.
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.
