markets might give good returns.

Traditionally, HSBC’s culture has embraced caution, discipline and

risk avoidance.

Before the China’s WTO accession negotiations, China’s banking industry operated as a cog in
China’s centrally planned economy. China’s gained accession to World Trade Organization (WTO) in
December 11, 2001 has then opened up greater market opportunity for HSBC to leverage their
global strategy to grow their presence in China. The Chinese economy is dominated by bank -based
financing, which accounts for more than 75% of all financial assets in China (Lu, 2006). China’s
banking sector was already affected by non-performing loan crisis when they

As HSBC’s strategy of “Managing for Growth”, this strategy builds on HSBC’s global,
international scope and seeks to grow by focusing on the key customer groups of personal
financial services, managing its international networks and business development in the
emerging markets, one of the strategy that HSBC has adopted is to constantly surveying on
the emerging markets that they are planning
market growth and therefore uses long-term profits instead of immediate results and uses

other companies as a benchmark. This proved to be true in Mexico, where HSBC found great

success due to the implementation of credit cards and the expanding market. HSBC also

bought an undercapitalized bank that helped it succeed. In Argentina, however, the results

were not nearly as good. When the Argentinian government converted American dollars to

pesos, the strong economy quickly fell. The devaluation of the currency created major losses

for most banks, especially HSBC and its strong presence in Latin America.

1. What are the pros and cons of HSBC’s “Managing for Growth” strategy?

Like any strategy, HSBC’s “Managing for Growth” strategy has many pros and cons

associated with it. It “aims to vault HSBC to the world’s leading financial services company”

(Managing for Growth, 547). Pros of this strategy include using peers to set targets for itself

and instead of expecting immediate results, this strategy understands the earnings over the

long term. Eight pillars were used to plan goals and how to achieve them, being a very big

pro. Unfortunately, HSBC increased their spending, which increased expenses, and profits

decreased. HSBC became outranked and employees soon left the company, creating a major

con to offset the pros.

 2. How did HSBC withstand the world economic crisis? Was HSBC’s position

weakened or strengthened as result of the crisis? What were the results of HSBC

group strategy in 2009? What regions were identified as new global opportunities?

“The consequences of global economic crisis were severe for the world’s banking system,

prompting thousands of banks to seek financial assistance from their local government”

(Economic Crisis and Financial Performance, 546). HSBC however still profited in 2008,

even though the profits were lower than that of 2007. This is mostly due to their strong

hold in emerging markets. They see Asia as having major potential growth and China as

key to future success. India is also a grand possibility.

3. What is the core of HSBC’s current “Organic Growth Strategy” in China? Why did

HSBC decided to expand its financial services in China’s rural areas? What are the

pros and cons of the rural expansion?

HSBC plans to expand into China using two strategies – Organic growth and Strategic
investments. With the organic growth strategy, the plan is “organic business growth via own
branch network” and the strategic investments are “creating value and synergies from
HSBC’s investment in strategic partners” (HSBC Current China Strategy, 555). To expand
rural business growth, government campaign