Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for HSBC Holdings PLC ADR (United States)
Based on various researches at Oak Spring University , HSBC Holdings PLC ADR is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion,
increasing household debt because of falling income levels, supply chains are disrupted by pandemic , etc
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Introduction to SWOT Analysis of HSBC Holdings PLC ADR
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that HSBC Holdings PLC ADR can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the HSBC Holdings PLC ADR, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which HSBC Holdings PLC ADR 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 HSBC Holdings PLC ADR can be done for the following purposes –
1. Strategic planning of HSBC Holdings PLC ADR
2. Improving business portfolio management of HSBC Holdings PLC ADR
3. Assessing feasibility of the new initiative in United States
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of HSBC Holdings PLC ADR
Strengths of HSBC Holdings PLC ADR | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of HSBC Holdings PLC ADR are -
Superior customer experience
– The customer experience strategy of HSBC Holdings PLC ADR in industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in industry
– HSBC Holdings PLC ADR has clearly differentiated products in the market place. This has enabled HSBC Holdings PLC ADR to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped HSBC Holdings PLC ADR to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that HSBC Holdings PLC ADR 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.
Diverse revenue streams
– HSBC Holdings PLC ADR is present in almost all the verticals within the industry. This has provided HSBC Holdings PLC ADR 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 Holdings PLC ADR is one of the leading players in the industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management in the industry
– HSBC Holdings PLC ADR is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
– HSBC Holdings PLC ADR 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 of United States is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Cross disciplinary teams
– Horizontal connected teams at the HSBC Holdings PLC ADR 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.
Digital Transformation in industry
- digital transformation varies from industry to industry. For HSBC Holdings PLC ADR digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. HSBC Holdings PLC ADR 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.
Innovation driven organization
– HSBC Holdings PLC ADR is one of the most innovative firm in sector.
Training and development
– HSBC Holdings PLC ADR has one of the best training and development program in industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High brand equity
– HSBC Holdings PLC ADR has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled HSBC Holdings PLC ADR to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of HSBC Holdings PLC ADR | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of HSBC Holdings PLC ADR are -
Workers concerns about automation
– As automation is fast increasing in the industry, HSBC Holdings PLC ADR needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High cash cycle compare to competitors
HSBC Holdings PLC ADR 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.
High bargaining power of channel partners in industry
– because of the regulatory requirements in United States, HSBC Holdings PLC ADR 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.
Slow to strategic competitive environment developments
– As HSBC Holdings PLC ADR is one of the leading players in the industry, it 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.
Employees’ less understanding of HSBC Holdings PLC ADR strategy
– From the outside it seems that the employees of HSBC Holdings PLC ADR 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.
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 Holdings PLC ADR supply chain. Even after few cautionary changes, HSBC Holdings PLC ADR is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left HSBC Holdings PLC ADR vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– From the outside it seems that HSBC Holdings PLC ADR needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department at HSBC Holdings PLC ADR can leverage the sales team experience to cultivate customer relationships as HSBC Holdings PLC ADR is planning to shift buying processes online.
High dependence on HSBC Holdings PLC ADR ‘s star products
– The top 2 products and services of HSBC Holdings PLC ADR still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though HSBC Holdings PLC ADR has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, HSBC Holdings PLC ADR has high operating costs in the industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract HSBC Holdings PLC ADR lucrative customers.
Slow decision making process
– As mentioned earlier in the report, HSBC Holdings PLC ADR 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 Holdings PLC ADR 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.
Increasing silos among functional specialists
– The organizational structure of HSBC Holdings PLC ADR is dominated by functional specialists. It is not different from other players in the industry, but HSBC Holdings PLC ADR needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help HSBC Holdings PLC ADR to focus more on services in the industry rather than just following the product oriented approach.
HSBC Holdings PLC ADR Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of HSBC Holdings PLC ADR are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for HSBC Holdings PLC ADR 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 Holdings PLC ADR to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. HSBC Holdings PLC ADR 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 Holdings PLC ADR 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in industry, but it has also influenced the consumer preferences. HSBC Holdings PLC ADR can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for HSBC Holdings PLC ADR in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the industry, and it will provide faster access to the consumers.
Developing new processes and practices
– HSBC Holdings PLC ADR can develop new processes and procedures in industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, HSBC Holdings PLC ADR is facing challenges because of the dominance of functional experts in the organization. HSBC Holdings PLC ADR can utilize new technology in the field of industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
– HSBC Holdings PLC ADR 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.
Creating value in data economy
– The success of analytics program of HSBC Holdings PLC ADR has opened avenues for new revenue streams for the organization in industry. This can help HSBC Holdings PLC ADR to build a more holistic ecosystem for HSBC Holdings PLC ADR products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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 Holdings PLC ADR can use these opportunities to build new business models that can help the communities that HSBC Holdings PLC ADR operates in. Secondly it can use opportunities from government spending in sector.
Better consumer reach
– The expansion of the 5G network will help HSBC Holdings PLC ADR to increase its market reach. HSBC Holdings PLC ADR will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Learning at scale
– Online learning technologies has now opened space for HSBC Holdings PLC ADR 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.
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 Holdings PLC ADR 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, HSBC Holdings PLC ADR can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Threats HSBC Holdings PLC ADR External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of HSBC Holdings PLC ADR are -
– 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.
Increasing wage structure of HSBC Holdings PLC ADR
– 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 Holdings PLC ADR.
Stagnating economy with rate increase
– HSBC Holdings PLC ADR 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 industry.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. HSBC Holdings PLC ADR will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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 Holdings PLC ADR needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. HSBC Holdings PLC ADR can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
– HSBC Holdings PLC ADR needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. HSBC Holdings PLC ADR can take advantage of this fund but it will also bring new competitors in the industry.
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 Holdings PLC ADR business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– HSBC Holdings PLC ADR 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.
– HSBC Holdings PLC ADR 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 industry regulations.
– 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 Holdings PLC ADR in the sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, HSBC Holdings PLC ADR may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for HSBC Holdings PLC ADR in industry. The 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.
Weighted SWOT Analysis of HSBC Holdings PLC ADR Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at HSBC Holdings PLC ADR 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 HSBC Holdings PLC ADR 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 HSBC Holdings PLC ADR 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 HSBC Holdings PLC ADR 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 Holdings PLC ADR needs to make to build a sustainable competitive advantage.