IntroductionThe success of an organization is largely dependent on the manner in which an organization is able to understand the evolving international environment and change according to it. This also requires proper understanding of the different culture which is present especially while working in the international market and developing strategies to use it effectively and ensuring that the employees remain motivated to perform on all areas. HSBC bank has witnessed a change in their style of working and has brought the required changes by understanding the different opportunities which China and other international market presented.
This has thereby ensure that HSBC looks at different developments like culture, changing business opportunities and other areas based on which the performance has been better and stronger. This will also help HSBC bank to develop different strategy for the future keeping in mind the different opportunities that the business provides and will thereby help to grow their business. Purpose of ReportThe report evaluates the change in HSBC strategy due to changes in China’s strategy especially after been included in WTO. In addition it to the report also evaluates HSBC strategy in other market, the different positives and negatives before HSBC, the manner in which crisis was dealt and the future direction for HSBC.
This will thereby help to give a strong idea about the complete performance of HSBC and the different factors both internal i. e. resources, skills, flexibility and so on along with external opportunities like changing business environment, better understanding of culture, and other external factors which helped to transform the entire working style. HSBC Strategy in China before & after WTO accessionHSBC strategy before accession of China to the WTO was totally contrasting and different to each other as China’s accession to the WTO brought wide spread reforms which changed the financial industry and resulted in a change in the strategy of HSBC.
The description of HSBC strategy is asHSBC Strategy in China before WTO accession: Before China became a part of WTO the banking industry was closed within the confines of the economy and the industry performed as a centrally planner economy. This was a phase when foreign banks were not allowed to perform in the country as investment in the banking sector was not allowed.
The State Commercial banks performed most of the functions and worked on the directed principle of lending which was communicated from the government. This resulted in the investment being made in some of the unsuccessful state owned enterprise and created a lot of debt which was non-recoverable and nonperforming. This thereby hardly provide any opportunity to HSBC to act as the work was mainly controlled by state commercial banksHSBC Strategy in China after WTO accession: After China became a part of WTO the banking industry witnessed widespread changes and reforms.
China’s economy was opened to foreign competition which allowed banks like HSBC to start functioning in the country. This provided the opportunity which HSBC bank was looking for. HSBC started its services in the country. HSBC started to provide different banking services like personal financial services, consumer finance, commercial banking services, corporate, investment banking and market. This thereby ensured that HSBC was able to carry out almost most of its activities. HSBC bank was also able to witness the opportunity that China presented and thereby started on their strategy of acquisition.
The bank started to have share in the insurance sector and slowly with the passage of time looked at the different opportunities which the smaller rural and urban places in China provided. They started to open their branches and looked towards customer satisfaction (Fizel, 2003). While looking to do so HSBC ensured that they understood the culture that was prevalent in China and based on it made changes in their style of work which helped to understand the wants and provide services based on it.