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Hsbc Porter's Five Forces Analysis

Essay by   •  July 14, 2011  •  Case Study  •  535 Words (3 Pages)  •  4,558 Views

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Porter's Five Forces analysis is a framework for business development and industry analysis; it is invented by Michael E. Porter (QuickMba, 2009). The five forces provide a simple perspective for analysing and assessing the market position and competitive strength of the organisation. There are five key factors of the force which are intensity of rivalry, threat of entry, threat of substitutes, buyer power and supply power. By clear understanding the context of each force, the company will able to "have important insights which can drive them to implement effective strategies to outgrow their competitors. and take fair advantages of its strength and improve its weakness regards to the market situation.

Force 1: Intensity of rivalry

There are many rivals in the financial and banking sectors; HSBC has been using efficient strategies to maintain its leadership position in the market. Other rival companies are very competitive and highly capable to compete in many segments which HSBC operate. In order to maintain its leadership position, for example: Barclays has branches all over the world and provide wide range of service such as personal banking, private banking, financial service.... It operate its business in many segments which HSBC operates, it is one of HSBC major rivals. Citigroup is an American financial service group, "it has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. (Citigroup, 2011)" Citigroup is one if the HSBC's major competitors in financial sectors. HSBC developed different strategic plans to ensure that "they are being the number one choice of their customer in the financial and banking sectors."(HSBC, 2011)

Force 2: The Threat of Entry

There are potentials for HSBC group to earn high profit in this type of industry. This attracts other companies to enter due to the potential of earring high profit. There are also several threats of new market entrants for HSBC, "these new entrants sometimes can make or break an organisation like HSBC. (Pdfcast, 2010)" In response the threat of market entry, HSBC has established entry barriers to maintain its competitive advantage in the market. The group is also able to ensure the existing customer remain loyal to them and attracts new loyal customer by using its strong brand image.

Force 3: The Threat of Substitutes

HSBC is aware that its competitors are producing new products and providing new services in the future (Pdfcast, 2010). The threats are these substitutes' service and products which can stimulate HSBC company work harder to maintain its market position and increase its profit. HSBC PLC is able to provide different needs and service for individual customers by using different strategies which has decreased

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