Introduction
Business in a global context today has made business organizations face
many challenges and higher competition levels. This global competition has made
organizations innovate in their management strategies, leadership styles and services
in order to reach competitive advantage and improve their performance. Most
companies today are working on an international level in order to reach higher
profitability and achievement. Working in such a global context makes it
difficult to boost the market and reach competitiveness easily so business
organizations try to apply techniques of global management and make use of the
cultural diversity in the work environment. There are many challenges facing
any business that is done in an international work environment or in a global
context as there are many strategies for enhancing business in a global context
and they should be based on deep analysis and evaluation. (Kalkan, 2011) The
current paper is analyzing and evaluating the marketing strategies of HSBC bank
Oman through applying the principles and practice of business in a global
context and how the bank is employing its resources and internal and external
capabilities and growth.
Analysis of the company's growth and
performance
Since the many financial crisis that spread all over the world, banks
internationally tried hard to protect their industry and market share as well
as improving their growth level and performance. HSBC has been one of the most
important international banks that is trying to keep and improve its level of
growth and performance. HSBC Oman improved its internal and external
capabilities in order to improve its growth and performance, the bank has added
many services and updated its current services to boost the banking and
financial market in Oman. First of all, the bank provided many opportunities
for helping drive major projects in Oman such as providing trading facilities
for Al Fairuz trading and contracting company as the bank provided it with a
special loan system for purchasing its equipment. HSBC provides the company
with an invoice discounting facility that is invaluable when it comes to
managing the delayed payment challenges that can arise on major infrastructures
projects. Projects of this type added too much to the bank's name and
reputation internationally as the company is dealing with suppliers from all
over the world. (Businesshsbc, 2017)
The bank has also added many services that provided different solutions
for customers and attracted them in order to invest with HSBS. It provides many
investment solutions that can help small and big investments grow and make
profits. Examples are the global payables and global receivables the bank has
delivered to its customers. The bank provided its customers with new electronic
payment solutions in order to improve the way they manage their capital. The
bank helped customers increase the efficiency of their operations by providing
them with new services such as personal banking, internet banking, mobile
banking and a variety of cards and ATM services that suit all needs and are
easy to be accessed by all available means. The bank has been trying to raise
its efficiency by raising its capitals through clients' investments in the
bank's projects. The bank has been facing a profitable growth challenge by
tailoring many liquidity solutions that suit the local market regulations and
the bank has tried to raise profits and investments, for example, during the
last 3 years total fines of RO 32,410 were imposed on HBON and its Pakistan
operations for regulatory penalties. This amount comprised of fines of RO
30,000 levied by the CBO relate to procedural, delegation of powers, policies
and operational issues relating to integration. The Chairman has responded to
the CBO and a Board approved action plan is in place to rectify the issues.
Fines equivalent of RO 2,410 were levied by State Bank of Pakistan on HBON's
Pakistan operations relating to operational issues. The bank is also trying to make business
with other banks and raise deposits and thus profits as according to the bank's
report of 2014, aggregate deposits held with commercial banks registered a
significant increase of 10.9% to RO17.3 billion in December 2014 from RO15.6
billion a year ago. Government deposits with commercial banks increased by
10.1% to RO5 billion, while deposits of public enterprises reduced by 6% to
RO0.88 billion during the same period. Private sector deposits, which
constituted 64.7% of total deposits with commercial banks, increased 13.5% to
RO11.2 billion in December 2014, from RO9.9 billion a year ago. The bank's
external capacity is also high and effective as the bank is raising its
efficiency of operations by managing its cash on a portfolio basis that
includes about more than fifty international markets as the bank's global
liquidity solutions include a variety of investment, self-funding and deposit
techniques. The bank will tailor its liquidity solutions and will restrict them
in order to be compliant with the regulations of the local market and not to
restrict the services' availability. The bank approaches combines both
effective information system and consistent services to be integrated easily in
the business of any investing organization and the bank also includes a great
management system that supports key clients' processes such as payable and
receivable. (HSBC Annual Report, 2014)
SWOT Analysis of the company
|
Strengths The bank depends on strong human resource management
and high efficient human resources who are trained on the latest banking
systems and techniques. HSBC presents many services and investment solutions
including internet banking, personal banking and liquidity and liability. The bank deals with many international companies and
have very strong clients from all over the world. The bank has a wide range of global liquidity
solutions and is trying to be tolerated with the local market regulations. The bank provides its clients with guarantees and insurance
systems. The bank has a variety of payment methods. The bank has strong infrastructure that provides
many projects and facilities to its clients. The bank is increasing its operational finance to be
working capital. The bank has a strong information system that is
highly secured and protected. The bank depends on a strong effective net dealing
with its customers via strong and efficient customer service team that uses
the internet and mobile services to connect with clients and meet their
needs. |
Opportunities The bank has many opportunities for attracting more
clients from Oman and form other countries as the bank provides a variety for
solutions suitable for investment and projects. The bank has effective services that are strong and
fast and can ensure accurate and safe delivery to boost other market rivals. The IT systems of the bank is stronger and updated
than others in the market. The bank can expand its businesses in the area of
the Middle and Far East depending on the success it made with companies in
these areas. Realizing the margins in line with the risks taken. The bank can make expansion of anti-cyclical investments.
It can also add some management
activities to encourage human resources innovate. It can also build new client relationships via the
internet and social media. It can broaden its product portfolio and enhancing
cross-selling activities. Boosting HSBC reputation to be regarded as a
reliable partner in the international transport industry in the Gulf area and
Middle East and MENA area. |
|
Weaknesses The bank is in need to apply other different types
of banking systems such as Islamic banking services such as Shariah services.
The bank is in need to provide solutions for big
companies that need big loans for great projects and the Omani law and
regulations restrict them. The bank needs to train its human resources on
updated Information Technology and updates in the banking services. Online contact with client need to be stronger. The bank need to find more effective means of
communication with customers online such as chatting or social media sites. The bank needs to present more tax free solutions
for its clients. |
Threats Imbalance in currency prices especially the US
Dollar compared to Omani Riyal. Problems in the global financial markets that may
affect foreign investments. The rivals of the market especially those electronic
banks such as PayPal and Moneybokers and others that provide easy transaction
solutions and easy online purchasing. Development of the prices of goods locally and
internationally. Differences in clients' needs and purchase movement.
The updated technology that changes daily in all
fields and in banking fields in particular. The rising threats of recession. The employees' turnover that is based on the
expatriate employees in the bank as this affects the human resources
management in the bank and the customer services. The effects that are occurring on the bank's net
interest margins that may happen due to early payments and other financial
activities in the bank. (Ommani, 2014) |
Effects of competitive advantage
Wang, (2014)
discussed how competitive advantage can be reached by the business organization
and what features can show the organization has competitiveness over its rivals
and how the organization can reach competitive advantage. He explained that
there are determiners that the organization can seek in order to measure its
competitiveness as he mentioned The Market-Based View (MBV) of strategy that argues that
industry factors and external market orientation which are the primary
determinants of firm performance and how the
organization can find out the operations and activities it should focus on in
order to increase competitiveness. This was also confirmed by Hana, (2013) who
added that innovation can bring in competitive advantage to the business
organization and it should be based on the market needs and that technological
improvements can add features to the competitiveness of the organization in
addition to cooperation and identified production routes.
HSBC depends on
different areas of business in order to achieve competitive advantage as the
bank focus on its industrialized operations as the bank exerts great efforts on
cost reduction so as to protect its margins. The bank has different local and
international projects that are meant to develop its resources and encourage
clients to invest in it. Clients' satisfaction is aimed at the industrialized
operations of the bank through the streamlined processes and the compensation
strategy the bank is delivering for its clients in order to reinforce their required
sales behaviors. Another area of interest in the bank is the asset protection
strategy as it is mainly focused on by the bank in order to ensure
competitiveness. The bank is trying to move to compliance in order to ensure it
is one of its business activities and this raises clients' trust and confidence
in the bank's business and raise competitiveness. The bank tries to protect its
asset through improving risk management capabilities. The bank also has
effective management of the technology based risks as many clients fear
investing in such a high technologized environment and this raises
effectiveness and competitiveness of the bank. Leadership is also well trained
to implement such technology and make full use of it and encourage clients to
invest using it. Stability of the bank's operating platforms also encourages
clients to trust the bank and invest in it. Another important area of
competitiveness the bank focuses on is the delivery transformation as the bank
gives much interest and support to the mobile payments and mobile network
operators as well as emerging innovators as this increases the investment
levels with the bank. The bank's digital services are very strong and much more
important than others found in different banks. Another area for
competitiveness the bank focuses on is the return on capital as the bank tries
to reshape its own competitive landscape by increasing opportunities for
clients to have high benefits and profits as well as helping the economy of
Oman generally to be improved through the services and projects the bank
delivers to its clients in Oman as this increases revenues and raises the
bank's competitive strength.
Ethics and corporate social responsibility
Harrison et al,
(2015) discussed how the stakeholder theory can be an effective ethical
approach for effective management, they referred to the need to support the
organization vi stakeholders' support as the organization has to regard all
stakeholders' needs and meet them and treating them morally and give much care
to the business ethics and corporate social responsibility. They also confirmed
that the business ethics is related to good management and lead to higher
financial performance. This was also mentioned by Litz et al, (2008) who added
that the theory sheds the light on corporate negligence of some organizations
and that this leaves a big impact on stakeholders and on the organization's
name, the organization should give much care to issues related to ethics and
the environment and that leadership should be effective strategist in dealing
with issues relevant to stakeholders. They added that stakeholders should be
classified into groups and each group should receive the proper interest by the
business organization. This will reflect on the organization through the
support of stakeholders and raising its reliability. Legislated access to
information by stakeholder is one of their rights and they should have full
awareness of the organization's activities and interests, projects and
aspirations for future of the organization and stakeholders' welfare.
Stakeholders' support can be gained by building a bridge of trust between
leadership and the stakeholders. The firm performance should include developing
its performance related to ethics and corporate social responsibility.
The HSBC board gives much importance
to a very high standard corporate governance that is able to create a bigger
value on the long term for the bank's stakeholders based on the bank's strategic
goals. There are some main principles that the bank's ethics and corporate
social responsibility are based on including the bank's financial strength,
risk management, giving care to the environment, speed and accuracy, informing
stakeholders and high competitive levels of performance as well as the high
quality of the services. The bank depends on integrating resources and
allocating them to the welfare of both the bank and the clients and the Omani
and global society as stakeholders include all elements in these areas. The
bank has governance policy that depends on effectiveness of the bank's board of
directors and its clear vision and strategic direction for development. The
bank also sponsors many charity and social events in Oman and globally in addition
to many other projects that provide welfare and benefits to the local and
international society.
Reflective summary
The current paper discusses how HSBC Oman bank can represent a good
example for working in a global context, the bank has many ways it is growing
through such as the different facilities and project aids it presents for Al
Fairuz trading and contracting company including the special loan system for
purchasing its equipment. Growth also depends on the high technologized
services the bank presents to its clients such as personal and internet banking
as well as the online services and ATM machines services. The bank also has
many strengths and opportunities that can improve its position in the market
and improve its performance such as its strong information system and customer
service as well as opportunities in the Middle EAST AND Far East where the bank
can expand its business and projects. The bank yet faces some threats and
suffers some weaknesses such as the need to apply different types of Islamic
banking in order to meet the clients' needs related to Islamic banking. Threats
include the changing prices of currency especially the US Dollar compared to
the Omani Riyal and other currencies. The bank is very keen on ensuring competitive
advantage through different services and projects that add too much to the
Omani economy and by industrialized operations, international projects,
stability of revenues, high profits, risk management capabilities, asset
protection, technologized environment, delivery transformations, mobile
services and internet banking. The bank focuses on ethics and corporate social
responsibility in order to maintain all stakeholders' interest and
satisfaction, this includes employees in the bank, clients and local and
international society, stakeholders are well informed about the bank's
activities and they have enough awareness related to the services the bank
provides the Omani society with. The bank is a sponsor for many charitable
projects in Oman and worldwide in addition to social events as well. The bank
depends on strategic goals to meet the expectations and aspirations of
stakeholders. The bank is recommended to add new service such as Islamic
banking services and innovate in the current services it has. The bank is asked
to compare other rivals such as those online banks including PayPal and
Moneybokers and try to add services they have to the bank's clients online in
order to make transactions easier and faster and more secured. The bank is
recommended to train its human resources, give them new compensation system and
retain them with different means in order not to turnover and cause loss to the
bank or represent threats. The bank is asked to increase its CSR activities and
share in more social and educational events in Oman and internationally in
order to achieve more competitive advantage in such a global context.
References
1. Businesshsbc, (2017). 'Helping drive major
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2. Hana, U. (2013). ' Competitive Advantage Achievement through
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82-96, March 2013 ISSN 1804-171X (Print), ISSN 1804-1728 (On-line), DOI:
10.7441/joc.2013.01.06
3. Harrison, J. Freeman, E. Abreu, M. (2015).
' Stakeholder Theory As an Ethical Approach to Effective Management: applying
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