HSBC Strategy Case Study
Key Learning Outcomes
By the end of the case, students should be able to:
- Understand what the BCG (Growth-share) matrix is.
- Analyse the various strategic business units in HSBC's portfolio and assess which ones are the stars and cash cows generating the most value, or the question marks, and dogs that may need further investment or divesting to achieve a balance of the portfolio.
- Apply strategy business models and frameworks such as the BCG matrix to real company cases.
1.0 INTRODUCTION
The UK banking industry is highly oligopolistic with the biggest four banks Lloyds Banking Group, Barclays, RBS and HSBC bank, also referred to as the “Big Four” controlling a combined market share of 77.17% for current accounts in the UK’s banking industry. HSBC is the biggest bank in UK in terms of assets and one of the largest banking and financial institutions in the world with over 1.89 trillion GBP in assets in 2017 and over 7500 offices across 80 countries across Europe, Middle East, North Africa, Asia, North America, and Latin America (Annual Report and accounts 2017; Statista 2017).
Established in 1865 with its headquarters in London, HSBC bank has many subsidiaries such as First Direct, M&S bank, and HSBC bank Bermuda, among others. In 2017, HSBC bank had an annual revenue totaling $51.445billion with a profit $11.88billion up from $3.45billion in 2016 (Statista 2018). In addition, its profit margin increased by 11.56% from 6.57% in 2016 to 18.13% in 2017, the second highest among UK banks (Orbis 2018).