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Company Analysis HSBC Report


Executive Summary

HSBC Bank is one of the largest banks in the world, and the largest foreign bank operating in Canada. The bank has been pursuing entry into the Kenyan economy, an economy which is characteristic with unskilled and semi-skilled labor, like all other developing economies. The Kenyan authorities have been exercising caution, avoiding harm on the people, the economy and the available resources.

The company’s characteristics, which will favor its entry into the Kenyan banking industry, include its promotion of trade links between different economies, its identification with host economies, and its efforts to foster the development of modern banking and finance services.

The bank will also be favored by its reconstructive strategies, its favorable entry strategies, and the strategies of identifying and addressing the financial needs of marginalized groups. These characteristics will favor the minister’s verdict, regarding allowing the company to enter the Kenyan economy.

Introduction

The HSBC Bank of Canada is a bank operating in Canada, as a part of the expansive British banking company, HSBC, which is among the world’s largest banking groups. HSBC is the seventh principal banking company in Canada, running outlets in all Canadian provinces, except Prince Edward.

The bank is the largest foreign owned banking company within the country, with its corporate headquarters at the financial hub of Vancouver, British Columbia. The company has been pursuing entry into the Kenyan market, an economy which is characteristic with unskilled and semi-skilled labor force.

The Kenyan government has also been pushing to nurture an industrial base, which will help offer employment opportunities and aid in raising the living standards of the Kenyan people. The Kenyan government has also been practicing caution, by not allowing foreign and local companies to set up economic ventures, which are likely to harm the country’s economic base, the country’s people or the available resources.

This paper is an explicative report written to the Minister, explaining the company, and discussing how its entry strategy and venture approaches will be favorable to the Kenyan economy. The report will show how the company is a favorable candidate to venture into the Kenyan economy, as it is a candidate not likely to affect the economy negatively.1

Discussion

Since its 1865 inception, the company has been financing trade between China and Europe. The bank’s inception was also based on the substantial demand for local banking services, both at Hong Kong and the China coastal trade lines.

Throughout the 19th century, the bank expanded its operations into China, the Indian subcontinent, South East Asia, North America, Japan and Europe, pioneering modern banking services and trade finance. As a result of the diversity of the economy, the bank started diversifying its business through mergers, amalgamations and alliances.

The strategic approaches of the bank, also include banking on marginalized groups, which are often not addressed by mainstream banking, including women and the youth, who may not own assets to present as security for credit. The bank further identifies with the areas and the markets it is operating at. T

he 1990s saw the consolidation of different businesses into the company, including the joint venture, for example, the formation of the Wells Fargo HSBC trade bank in 1995. In 1997, a new auxiliary Banco HSBC Bamerindus was created in Brazil. In 1999, the bank signed an M.O.U with the Korean government, towards the acquisition of a controlling stake in Seoul Bank, a major commercial bank in Korea.2

From a detailed analysis of the Kenyan economy, it was clear that the economy identified with a number of characteristics, all associated to developing economies. These include low standards of education, poor health care, unemployment, poverty and limited access to resources and infrastructure, like safe water.

From evaluating the entry strategies of HSBC, the bank will help eliminate these weaknesses of the economy in a number of ways. The company’s strategies, since its inception, were based on fostering international trade, which helps eliminate the economic imbalances within the Kenyan economy.

This is the case, as by promoting the development of international trade through financing export and import trade, the company will aid in the creation of employment as well as reduce the poverty levels registered among the country’s citizens. From the historical track record of the company, it has focused its operations around the major areas of demand, in offering banking services.3

Throughout the 19th century, the company registered a track record of fostering the up-take of modern banking and trade finance services, which can be very helpful to any economy, based on the benefits drawn from adopting modern banking models and trade financing.

For example, the bank has been fostering the uptake of more flexible, convenient and effective banking models, which can be accessed at any time, when banking customers need such services. From entry into the Kenyan economy, the bank will offer models that are likely to foster the flexibility of access to banking services and banked finances, these including the creation of 24/7 banking models.4

From the track record of the bank, it has engaged in the reconstruction of economies like that of the Hong Kong economy, which it rebuilt after the Second World War. The bank did that by identifying areas of financial need and development insufficiencies.

From venturing in the developing economy, the bank will aid in development, through identifying areas of financial need and development, including unemployment and poverty, which can be addressed through the creation of finance access platforms and capacity building.

From this company’s strategy and economy entry model, the company will be able to identify areas of financial need and development insufficiencies.5

The company’s reputation can also be identified in its ability to revise strategy and strategic diversity, for example, its shift to expanding its operations in other countries through alliances, mergers, amalgamations and acquisitions.

From the usage of such strategies, the company stands the chance of not threatening the banks, already operational within the developing economy. As a result, it will not harm or threaten local companies, and the people’s welfare, which relies on the employment from such companies.

The company will also not affect the resources of the nation, through capitalizing on established and accepted means of resource exhaustion.6

From the historical record of the bank, it also banks on marginalized groups, these including women and youths, who are more vulnerable to economic constraints and the lack of access to credit facilities. The bank achieves this through employing its wide range of personal finance packages, which will offer employment and income creation opportunities for these groups.

As a result, it fosters economic development from their contribution, thus the realization of a faster economic development. As a result, this will be advantageous to the development of the entire economy, that of the people as well as the Kenyan resource base, which will be very advantageous to the entire economy.

From this strategy, the company will help in building trade capacity, which will help the workers as well as the companies operating within the Kenyan economy, realize the full advantages of local and international trade opportunities.

From such a model, there will be the establishment of reciprocal trade agreements between the different areas where the company is operating in, which will help the Kenyan economy as well as the workers, draw from the system. Based on the company’s recognition of un-identified groups, the elimination of poverty and unemployment will be fostered, thus should be allowed entry into the Kenyan economy.7

Bibliography

Berger, Allen, and Robert DeYoung. “The effects of geographic expansion on bank efficiency.” Federal Reserve Board Finance and Economics 2 (2001): 3-5.

Berger, Allen et al. “The consolidation of the financial services industry: causes, consequences and implications for the future.” Journal of Banking and Finance 23. 2 (1999): 135-94.

Berger, Allen et al. “The efficiency of financial institutions: a review and preview of research past, present and future.” Journal of Banking and Finance 17. 2 (1993): 221-249.

King, Frank. The History of the Hong Kong and Shanghai Banking Corporation. New York: Cambridge University Press, 1987.

Mauro, Guillén. Multinationals, Ideology, and Organized Labor. New Jersey: Princeton University Press, 2003.

Muirhead, Stuart. Crisis Banking in the East: The History of the Chartered Mercantile Bank of India, London and China, 1853-93. New York: Scolar Press, 1996.

Sullivan, Arthur, and Steven Sheffrin. Economics: Principles in Action. New Jersey: Upper Saddle River, 2003.

Footnotes

1 Frank King, The History of the Hong Kong and Shanghai Banking Corporation (New York: Cambridge University Press, 1991), 25.

2 Stuart Muirhead, Crisis Banking in the East: The History of the Chartered Mercantile Bank of India, London and China, 1853-93 (London: Scolar Press, 1996), 34.

3 Arthur Sullivan and Steven Sheffrin, Economics: Principles in Action (New Jersey: Upper Saddle River, 2003), 471.

4 Guillén Mauro, Multinationals, Ideology, and Organized Labor (New Jersey: Princeton University Press, 2003), 123.

5 Allen Berger et al., “The consolidation of the financial services industry: causes, consequences and implications for the future,” Journal of Banking and Finance 23. 2 (1999): 135-94.

6 Allen Berger et al., “The efficiency of financial institutions: a review and preview of research past, present and future,” Journal of Banking and Finance 17. 2 (1993): 221-249.

7 Allen Berger and Robert DeYoung, “The effects of geographic expansion on bank efficiency,” Federal Reserve Board Finance and Economics 2 (2001): 3-5.

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IvyPanda. (2019, December 10). Company Analysis HSBC. Retrieved from https://ivypanda.com/essays/company-analysis-hsbc/

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"Company Analysis HSBC." IvyPanda, 10 Dec. 2019, ivypanda.com/essays/company-analysis-hsbc/.

1. IvyPanda. "Company Analysis HSBC." December 10, 2019. https://ivypanda.com/essays/company-analysis-hsbc/.


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IvyPanda. "Company Analysis HSBC." December 10, 2019. https://ivypanda.com/essays/company-analysis-hsbc/.

References

IvyPanda. 2019. "Company Analysis HSBC." December 10, 2019. https://ivypanda.com/essays/company-analysis-hsbc/.

References

IvyPanda. (2019) 'Company Analysis HSBC'. 10 December.

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