Global Marketing Decisions - 1

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CIM Membership Number: 40053628
Module Title: GLOBAL MARKETING DECISIONS (2304)
Qualification: Postgraduate Diploma in Professional Marketing - Level 7
Cambridge College of Business and Management – Sri Lanka

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GLOBAL MARKETING DECISIONS MEMBERSHIP NO - 40053628 2020/JULY
GLOBAL MARKETING DECISIONS (2304)

JULY – 2020
Total Word Count -5215 (Within10% + Variance)
Page 3 of 43
Table of Contents
Task 1 - HSBC Strategic Position in the global market and International marketing strategy .................... 7
1.a Critically evaluate HSBC’s strategic position in the global marketplace and their readiness to compete
globally. ......................................................................................................................................................... 8
1.a.1 Introduction ....................................................................................................................................... 8
1.a.2 Critical evaluation of the External and Internal environment .............................................................. 8
1. a.2.1 Critical evaluation of the impact of MACRO drivers ................................................................. 8
1.a.2.2 Critical evaluation of MICRO Industry related drivers ................................................................ 8
1.a.2.3 Critical evaluation of HSBC’s Internal Environment .................................................................. 9
1.a.3 The 3 type of strategies which involve in strategic position .............................................................. 10
1.a.4 Conclusion ...................................................................................................................................... 10
1.b Critical evaluation of the appropriateness of the current international marketing strategy for HSBC ....... 11
1.b.1 Introduction ..................................................................................................................................... 11
1.b.2 Prioritization of key markets of HSBC ............................................................................................ 11
1.b.3 Advantages and disadvantages of each market ................................................................................. 11
1.b.4 HSBC Degree of adaptation to current market ................................................................................. 12
1.b.5HSBC Strategic observations ............................................................................................................ 12
1.b.6 HSBC’s overall extent of success in handing the market .................................................................. 12
1.b.7 Conclusion ...................................................................................................................................... 13
Task 2 - HSBC Strategic options to grow and maximize profitability while analysing the strategic risk. .. 14
2.a Critically assess and priorities TWO strategic options available to HSBC for maximizing growth and
profitability .................................................................................................................................................. 15
2.a.1 Introduction: .................................................................................................................................... 15
2.a.2 Critical evaluation of Selected two strategic options to HSBC for maximizing growth and
profitability. ............................................................................................................................................. 15
2.a.2.1 Differentiation strategy - Point of differentiation ...................................................................... 15
2.a.2.2 Product development strategy ................................................................................................... 16
2.a.3 Evaluate and select TWO strategic options using FSA framework ................................................... 17
2.a.4 Conclusion: ..................................................................................................................................... 18
2.b Analyse the strategic risks facing HSBC in successful implementation of each of the TWO strategic
options outlined in Task 2 (a) and recommend relevant mitigation strategies to reduce the impact of the risks.
..................................................................................................................................................................... 19
2.b.1 Introduction: .................................................................................................................................... 19
2.b.2 Analyse the strategic risk facing in HSBC and recommending risk mitigation strategy and
justification .............................................................................................................................................. 19
2.b.3 Conclusion: ..................................................................................................................................... 21
TASK 3 – CUSTOMER RELATIONSHIP MANAGEMENT ..................................................................... 22
3.a Organization Summary ........................................................................................................................... 23
3.a.1 Organization Name - Hatton National Bank PLC ............................................................................. 23
3.a.2 Type of the organization .................................................................................................................. 23
3.a.3 Size of the Organization .................................................................................................................. 23
3.a.4 Product and services ........................................................................................................................ 23
3.a.5 Customer Base and main competitors .............................................................................................. 23
Page 4 of 43
3.a.6 Summary of Stakeholders ................................................................................................................ 23

3.a.7 Current approach to customer satisfaction and loyalty...................................................................... 23
3.b Critical evaluation of CRM techniques used by HNB to increase customer satisfaction and loyalty ........ 24
3.b.1 Introduction ..................................................................................................................................... 24
3.b.2 Critical evaluation of CRM techniques from a strategic perspective of HNB bank ........................... 24
3.b.3 Justification of recommended CRM techniques that can be used for strategic Benefits .................... 25
3.b.3.1 Developing customer base ........................................................................................................ 25
3.b.3.2 Improve Cross-selling Frame work........................................................................................... 25
3.b.3.3 Enhance Overall Profitability of HNB ...................................................................................... 25
3.c Critical appraisal of the organizational constraints impacting the successful implementation of CRM
techniques at HNB identified in task 3 (b). ................................................................................................... 27
3.c.1 Conclusion ...................................................................................................................................... 28
Annexure 01 - Strategic Audit .......................................................................................................................... 29
Annexure 02 - Financial strengths..................................................................................................................... 35
Annexure 03 - Range of products and services .................................................................................................. 36
Annexure 04 – Key Stakeholders benefit (Impact on HNB stakeholders) .......................................................... 36
Annexure 05 - How HNB Listen to their stake Holders and Mendelow’s Metrix .............................................. 37
Annexure 06 - Current approach to customer satisfaction and loyalty at HNB .................................................. 38
Annexure 07 - Competitor Analysis .................................................................................................................. 39
Annexure 08 - CRM implication....................................................................................................................... 40
Annexure 09 - CRM Technique ........................................................................................................................ 42
Annexure 10 - Constraints of CRM .................................................................................................................. 42
References ........................................................................................................................................................ 43
Annual Reports................................................................................................................................................. 43
Research Papers................................................................................................................................................ 43
Tables
Table 1 - Critical evaluation of the impact of MACRO drivers ........................................................................... 8

Table 2 - Critical evaluation of MICRO Industry related drivers ......................................................................... 9
Table 3 - Critical evaluation of HSBC’s Internal Environment............................................................................ 9
Table 4 - Current strategy analyse ..................................................................................................................... 10
Table 5 - GE matrix HSBC ............................................................................................................................... 11
Table 6 - Advantages and disadvantages of HSBC Markets .............................................................................. 11
Table 7 - HSBC Degree of adaptation to current market ................................................................................... 12
Table 8 - Rate & Rank of the HSBC market handling success........................................................................... 12
Table 9 - Critical assessment of Differentiation strategy - Point of differentiation ............................................. 15
Table 10 - Critical assessment of Product development strategy ....................................................................... 16
Table 11 - FSA framework ............................................................................................................................... 17
Table 12 - Strategic risk facing in HSBC and recommending risk mitigation strategy ....................................... 20
Table 13 - Financial Highlights of HNB Source (Annual Report of HNB 2019)................................................ 23
Table 14 - Current CRM Techniques ................................................................................................................ 25
Table 15 - Constraints impacting the successful implementation of CRM techniques ........................................ 28
Figures
Figure 1 - Physical Distribution and affirmation – Source annual report ........................................................... 23

Figure 2 - product and services – Source annual report ..................................................................................... 23
Page 5 of 43
Abbreviations
AI Artificial intelligence
GMB Global Banking and Markets
RBWM Retail banking and wealth management
YOY Year on Year
PBT Profit before tax
GPB Global and private Banking
RAW Risk Weighted assets
HNB Hatton National Bank
NII Net interest income
CRM Customer Relationship Management
SME Small and medium enterprises
Bn Billions
Mn Millions
PAT Profit after Tax
PBT Profit before Tax
CSR Corporate Social Responsibility
NPS Net Promoter Score
CSAT Customer Satisfaction score
BOM Branch operating module
CASA Currant accounts and savings accounts
ROE Return on equity
ROCE Return on Capital Employed
US United State
UK United Kingdom
AML Anti-money laundering
NPA Nonperforming assets
RoTE Return on tangible equity
CAPEX Capital expenditure
GDPR General Data Protection Regulation
Page 6 of 43
Task 1 - HSBC Strategic Position in the global

market and International marketing strategy
Word Count -1373
To The Senior Management Team of HSBC

From Marketing Consultant
Subject HSBC Strategic position in global market place and current market
strategies
Date 05-06-2020
Executive Summery
This report critically evaluates the strategic position in the global market place and HSBC readiness to
compete globally and analyzing the appropriateness of the current international marketing strategy for
HSBC.
Page 7 of 43
1.a Critically evaluate HSBC’s strategic position in the global marketplace and their
readiness to compete globally.
1.a.1 Introduction
This report takes into account the strategic audit (annexure 1) and summarizes the strategic position of
HSBC in the global marketplace and its readiness to compete globally. According to Aaker&
McLaughlin (2007), strategic position specifies how the business aspires to be perceived, relative to its
competitors and market. HSBC needs to determine what changes it needs to make and whether it is
capable of effecting such changes (Johnson &Scholes, 2005). It is identified that HSBC competes with
both leading international banks as well as domestic banks within the countries it operates in.
1.a.2 Critical evaluation of the External and Internal environment
1. a.2.1 Critical evaluation of the impact of MACRO drivers

Using the SWOT &PESTEL framework, the macro environment is analysed in (Audit 1and 8) as it
provides a comprehensive analysis of the environmental influences. Audit 9 discusses this further how
these will affect HSBC in different scenarios.
Macro drivers Critical evaluation Impact

Brexit UK and the china is the biggest market for HSBC and this will effect to High
deterioration of the market share and implementation of new regulation and
china- U.S trade war. HSBC should focus its preparations in France as its
primary banking entity within the EU. Further can extent its operation in
Netherlands and Ireland. HSBC's revenue, 49%, comes from Asia. Hence
they should ready to focus more on this region to mitigate income loss in EU
region.
Emerging Emerging Markets have been big drivers of global growth. Emerging High
market Markets have always been integral to HSBC. There is a great opening for
HSBC to look for more joint ventures and partnerships, to take advantage.
However, HSBC highly depend on china. Young growing populations in the
emerging world will be the world’s new workers and consumers. By 2025,
80 per cent of the world’s middle-class consumers will be in countries.
HSBC should ready capture these emerging markets.
Consumer There is a behavioral shift to buying online, rather than brick and mortar. Medium
behavior Customers a want banking to be more accessible, processes to be made
easier, personalized products with options and tailor-made experiences.
HSBC have ‘bad inflation’ caused by trade tariffs and high good pricing.
HSBC currently introduce more technology products. However usage of it
not up to the stand.
Table 1 - Critical evaluation of the impact of MACRO drivers
1.a.2.2 Critical evaluation of MICRO Industry related drivers

Utilizing the product onion (Audit 14) and porters five forces (Audit 7) aim to showing how HSBC is
making its global strategy and what the competitive advantages are they getting from this business
strategy.
Page 8 of 43
Micro drivers Critical evaluation Impact

Industry Rivalry Even though HSBC high secure banks with more loyalty programs High
(Audit 7) imply customers have high cost of switching, Certain markets are
dominated by few other players. Industry growths to decline
triggering battle of the market share. Exits made difficult due to high
investment. Collaborating with competitors to gain market share
rather than competing for small markets and fintech solutions will
reduce the rivalry.
Customer value HSBC’s brand values focus on communities, connectivity and global High
proposition analysis communication.HSBC need to focuse on augmentet and potential
(Audit 14) products.They have to have a plan on future value proposition
discussed in audit.
HSBC highest revenue receiving from the RBWM. Need to dominate Medium
RBWM customer segments in home country markets. HSBC need to
Segmental analysis actively assess the impact of economic developments in key markets
(Audit 10 & 11) on specific customer segments and portfolios and take the maximum
out of it.
Table 2 - Critical evaluation of MICRO Industry related drivers
1.a.2.3 Critical evaluation of HSBC’s Internal Environment

Current strategy analyzes in Mckinsey 7S (Audit 4) and the following summery table critically
question the application of it. Involvement of stake holders (Audit 3) and cultural web (audit 5) are
analyzed in the audit.
Internal drivers Critical evaluation Impact

Systems What are the systems that store the relevant details? Like High
cloud at HSBC, where will the data be aggregated in a single
system prior to Statistical Analysis? Where are the decision
controls and how are they communicated, monitored and
evaluated to ensure that the decisions are relevant and reach
only the intended stakeholders in a timely manner? What
internal rules and processes does the HSBC use to keep the
related insights? HSBC university can focus on this.
Shared value What are the core values of the HSBC? Since people are High
integral to the creativity and understanding between
businesses, are they bound by the same core value? What is
the HSBC culture and strength of their values? Are they
guided by a relentless pursuit of insights to be derived and
that are addressing relevant business problems? What are the
fundamental values that the HSBC team was built on? Are
they in alignment with the values that are of relevance
today?
Skills What are the strongest skills represented within the HSBC? High
Is it a good mix of business understanding, and Technology
Acumen to deliver value? Are there any skills gaps? What is
the HSBC known for doing well in response to business
problems? How quickly are the results obtained? Creativity
of solutions and adaptation to the problems at hand are
required essential skills. Are they in accordance with the
rapid changes happening across HSBC along with
technological relevance across business problems? HSBC
university can more focus on these issues.
Table 3 - Critical evaluation of HSBC’s Internal Environment
Page 9 of 43
1.a.3 The 3 type of strategies which involve in strategic position
Comparative Strategy Product & Market Strategy Growth strategy

Cost leadership, differentiation and Key areas of this discuss under HSBC through strategic alliances,
focus. Cost leadership is not an product market strategy in ansoff mergers, joint ventures, franchising
option for HSBC. Differentiation matrix.(audit20) and acquisitions achieving rapid
reduce the bargaining power of HSBC Increase number of growth and expansion in the
customers by increasing value for the customers, number of branches in different markets and regions.
bank, not by holding the customer strategic locations via penetration. HSBC and global payment form
forcedly and improve switching cost. Using new technology product joint venture to merchant service.
Innovation as a tool to offer development happening at HSBC. Throughout the period of 150 years
differentiated augmented services. Most of the region and different HSBC engage in many ways in
Both best value and low cost value market currently HSBC using this growth strategy.
focus strategies use in different strategies in manageable way. It can
markets and products. be improve further.
Table 4 - Current strategy analyse
1.a.4 Conclusion
Key strength is they are having firmness in PAT and PBT, positive cash flow, operational excellence
and spread of products, strong sustainability reputation focus, and unique culture. The key weaknesses
are lack of centralization, no specific position in the local banks, less technology embarking, and less
penetration at emerging markets. (Audit 2)
Page 10 of 43
1.b Critical evaluation of the appropriateness of the current international marketing

strategy for HSBC
1.b.1 Introduction
Hollensen, Nasiums (2007) suggests a good sequential design of entrance into global markets having
an increasing “commitment” to international markets given that the international experience of the
business grows. Baker, M (1993) recognizes possibility mitigation built in internationalization,
protecting often the firm with adverse fluctuations in the country wide economic pedal.
1.b.2 Prioritization of key markets of HSBC
HSBC operates through offices in countries extending Europe, Middle East & Africa, Asia, North
America and Latin America (Audit 16) Asia and Europe are the key markets and Asia is in the first
place in Geographical Revenue (Audit 18). By using audit material, we can prioritize key markets using
GE matrix.
Table 5 - GE matrix HSBC

1.b.3 Advantages and disadvantages of each market
Market type Advantages Disadvantages Marketing
Strategy
Europe Ring fencing, having numerous Low reputation, Diversification
operations, High growth uncertainty (Brexit)
potential
Middle East & Africa $4.5 Bn growth in customer Low profits, exit from Strategic
account value, deposit & int some markets withdrawal
trade business
Asia Belt and Road initiative, relax Branch closures, profit Growth Strategies
FDI restrictions and simplified fallen in India, and restructuring
banking procedures, biggest
customer market
North America Customer value is high, higher Branch closures ,less Restructure
ROE & ROCE contribution for profits,
Latin America onshore & offshore business, Low revenue, US- Growth Strategies
Global presence China trade dispute,
economic uncertainty
Table 6 - Advantages and disadvantages of HSBC Markets

As per the audit 16 and 18 highest advantages will get from the Asia and Europe. Hence HSBC need
more focus on these regions.
Page 11 of 43
1.b.4 HSBC Degree of adaptation to current market

HSBC is serving in different cultures under different factor conditions while facing to bilateral
agreements, drivers of globalization and economic of scale. Following table finding the key factors base
on international marketing strategy. (Audit16)
As per cultural web (Audit 5) HSBC dealing with several cultures communities.
When they are entering in to different segments buyer behavior will play a major
Culture role. People react differently in different location. This is effect to internally and
externally. Some areas HSBC close their branches less growth due to mismatch of
adaptation.
Law related to open banking and fintech differ from regions, Infrastructure cost
Factor Conditions differs from the countries, labour law and capital requirement is differing to each
region. High adaptation cost on these factors to HSBC.(Audit 2)
How to reach economic of scale according to country environment using systems,
withdrawing. Effect of bilateral agreements such as brexit, north America and
Demand conditions middle east and UK, ASIAN.
Table 7 - HSBC Degree of adaptation to current market
1.b.5HSBC Strategic observations
The product market strategies analyse by using Ansoff matrix (Audit 20). HSBC’s experiences which
spans over and intellectual properties such as its largest customer database allows the bank to optimize
its delivery network by providing the right product to the customer using the most cost-effective
process. Due to the high switching cost, it is hard to move customer. (Audit10) In terms of market
capitalization, HSBC is the 9th biggest Bank in the world. HSBC could focus on premium pricing
strategy for its premier market products, while establishing lower margins for the generic banking
products intended for mass customers to ensure optimum results. Emerging options like Islamic
Banking and Insurance industry are also viable options for HSBC to grow. Emerging markets, the key
negatives would be the adaptation to the operating environment, local regulations aimed at protecting
domestic industry, the level of technological advancement, and the risk of uncertainty. Standardization
helps HSBC to work under one platform.
1.b.6 HSBC’s overall extent of success in handing the market

As per the rating by referring 1.b.4 factors and audit 16 can identify success of HSBC’s adoption in
market region wise.
Market type Culture Factor Demand Revenue Rate Rank

conditions conditions mix
Europe 2 2 3 2 9 2
Middle East & 5 3 5 5 18 5
Africa
Asia 1 1 1 1 5 1
North 3 4 2 3 12 3
America
Latin America 4 5 4 4 17 4
Table 8 - Rate & Rank of the HSBC market handling success
(Rating given 1 to 5 bases on best option to lowest)
Page 12 of 43
1.b.7 Conclusion
HSBC find them in a unique position to harvest the opportunities which comes along with this changing
landscape. Expanding in to emerging markets would also strengthen HSBC’s competitive advantage
and would further strengthen. Therefore, Middle East is having a high risk which has low revenue
compares to other markets and Asia is having higher revenue which shows a low risk.
Page 13 of 43
Task 2 - HSBC Strategic options to grow and

maximize profitability while analysing the strategic
risk.
Word Count - 2196 (Within 10% + variation)
To The Senior Management Team of HSBC

Subject Strategic options available to HSBC for maximizing the growth and
relevant risk mitigation strategies
Date 10-06-2020
Executive Summery
In this brief report priorities, the product development and differentiation strategic options at HSBC
for increase growth and profitability while analysing the strategic risk involving in implementation
and how HSBC can mitigate or reduce the impact of it.
Page 14 of 43
2.a Critically assess and priorities TWO strategic options available to HSBC for
maximizing growth and profitability
2.a.1 Introduction:
Product development and differentiation should implement where the revenue is high geographically
as well as having sufficient capabilities and competences to launch the product. We have summarized
the HSBC competitive advantage (Audit23) and new competencies (Audit21) in the Audit. The strategic
intent is not inspirational, enthuse, and gain commitment and strength performance. Its lacks of a vivid
description of the future. Therefore, propose new vision is being at the forefront of economic prosperity
by focusing on new trend at HSBC (Audit 15). Staff cannot easily recall, remember and concise, clarify
overall purpose, the business they are in and there is no an idea to make a difference and to do this.
HSBC is the world 9th largest bank in the world. To become a number one bank in the industry they
have to identify their unique competences and develop the correct product development and
differentiation strategies in all markets.
2.a.2 Critical evaluation of Selected two strategic options to HSBC for maximizing growth and
profitability.
2.a.2.1 Differentiation strategy - Point of differentiation

Key points Critical Assessment of strategy Effect to growth & profitability
 Premier proposition HSBC has good spread of customers among Access premium level checking relationship
 Linked screen, Beta different value proposition and porter's without fees on bank transactions and other
App, international competitive strategy identified differentiation new initiatives builds on the unique
support centre, is the best option for HSBC. However, they qualities of products. HSBC create a list of
online knowledge are not focusing properly in all region characteristics its products contain that
centre differentiation. competitors lack.
 In branch business Standardization of global platform will
specialists If HSBC can form at lease regional based reduce the cost.
 HSBC University universities will help to increase the unique
 Embracing Fintech values. Branch business specialists deliver an
(Digital Banking)- experience to customers, HSBC university
open banking HSBC can introduce tabs for their frontline increase the adaptation to different culture.
 HSBCs global staff and equipped them with new technology. This will gain an advantage in the market
platform Proposed branch business specialists to even when there are similar products
 Multi/ Omni Channel deliver a professional face to face service. available
delivery Because this will create strategic lock on
 Operational Standardization of global platform will be their customers.
excellence benefited to differentiation.
(restructuring)
 Big data analysis Competitors can use in-house data by using Introducing more fintech will be initially
open banking. HSBC need to improve the data high cost but it creates brand loyalty in
policy security. The advanced analytics customers and reduces the cost in long run.
technology extract key data within these
documents before feeding it into the bank's Differentiation create segment value
transaction processing systems; boosting proposition creates exit barrier; reduce the
accuracy whilst freeing up staff for more bargaining power of customers by increasing
value-adding activities. value for the bank.
Big date embracing machine learning to make

batter sense of that data and detect money
laundering. Restructuring the group needed to
reform and centralization was key to this, as
local practices in many countries differed
greatly.
Table 9 - Critical assessment of Differentiation strategy - Point of differentiation
Page 15 of 43
2.a.2.2 Product development strategy

Key points Critical Assessment of strategy Effect to growth & profitability
 Augment (added Globalization that is bringing an When there is an exit barrier which
value) through increase of competition and at the reduces the bargaining power of
digital banking same time a decrease in physical customers and high switching cost.
 Social media borders, forcing organizations that Even, if the customer wants to leave the
interfaces- FB, want to have success seeks new bank, the customer cannot easily exist
WhatsApp, alternatives of processes. One feature from the bank.
Instagram of these challenges is the recognition
 Cause related that to compete effectively in rapidly Omni channel banking provides the
products - Credit changing markets and must interaction between customers and bank
cards, solar loans continually develop new products. with various channels that increase the
 Specialist business market growth.
account for SMEs HSBC need to increase utilization of
and corporate its products which highlighted in key
leveraging the points. Products with enhanced security which is
global platform a faster, simpler way to log on to the new
 Salary (loans/ Bancassurence and merchant can HSBC Malaysia Mobile Banking App.
overdrafts) bundled couple with existing product such like This will help to reduce cost to income
offer capitalising insurance premium with ratio.
 Products with the lease and say insurance free.
enhanced security - Digital branch concept and other fintec
Virtual pins The innovation labs, which form part solutions will help to save time of the
 Non-core banking of a wider global strategy to simplify employees for productive work.
(fee based) and enhance the bank’s technology. Bancassurence and merchant and trade
businesses - services will give a good fee base income.
Bancasurance, Bank need to have strong R & D unit.
merchant payment Therefore, continues development of
services the product is a must to keep
 Launch a Digital competitive advantage in the market.
branch Large banks Like HSBC have more
 Launch a Fintech potential to keep this advantage as a
innovation Lab in fist mover to industry since they have
UK strong financial back ground.
 Research and
development
Table 10 - Critical assessment of Product development strategy
Page 16 of 43
2.a.3 Evaluate and select TWO strategic options using FSA framework
Differentiation strategy Product development
Suitability Asia and Europe are having high HSBC maintain a privileged position in
revenue compares to other regions high-growth markets, particularly in
where we should have enough cash Asia and the Europe which is high in
flows to the country where we will revenue where there is a product
need capitals for the new development occurs which is the
technology. So, Asia and Europe are conformity of the strategy in relation
the best suitable places for strategic position of banks derived
differentiation where strategic through its core competencies and
position of banks derived through its resources.
core competencies and resources.
Acceptability Asia and Europe are showing high Since there is high revenue at Asia which
revenue which shows the low degree is showing 48.60%, the risks are
of potential resistance where the minimum in this area that is The strategy
differentiation strategy is acceptable is capable of delivering the expected
which satisfy expectations of outcomes. Europe also showing high
stakeholders. acceptability on new products.(E.g. Ring
fencing banking)
Feasibility Asia and Europe comprises enough HSBC having unique resources and
resources, skilled people as well as competencies as well as skills people
competencies where these regions which gives maximum growth for the
are fulfilling all the requirements for business from Asia market for the
implementation of new strategy. product development where the strategy
HSBC won’t require new is practically possible to implement.
competencies because, current
competencies are supporting for
implementation.
Further, we can use cash flow
analysis and break even analysis to
gauge feasibility.
Table 11 - FSA framework
Page 17 of 43
2.a.4 Conclusion:
The product development and differentiation strategy create exit barriers which reduces bargaining
power of the customers. Further, it will lead for lock in strategically at bank by increasing value for the
bank which increase switching cost and create a sustainable competitive advantage.
Page 18 of 43
2.b Analyse the strategic risks facing HSBC in successful implementation of each of the
TWO strategic options outlined in Task 2 (a) and recommend relevant mitigation
strategies to reduce the impact of the risks.
2.b.1 Introduction:
HSBC is a larger bank which has to conscious about risk management. Because, handling shareholder’s
money and customer’s depositor’s money there has to be an extra care when take think about the
framework of risk management. There has to be an auditing, inspection, dual control (Check and
balance system) to verify the accuracy of the operation. When the bank crashed, the depositors are not
getting their money back and that may affect for economic system, legal system, political system and
social system of the country. The whole purpose of ring fenced banking is to make sure even if they
lend to someone the mortgage customers in the UK and that the portfolio goes down which does not
mean that entire HSBC will be go down. Only the ring-fenced goes down which is having separate
board of directors, committee from HSBC bank. (Refer Audit 12 and 22).
2.b.2 Analyse the strategic risk facing in HSBC and recommending risk mitigation strategy and
justification
Strategic uncertainty is effect to both of these options and gradual deterioration of competitive action
that results in the failure of an organization. Them for acknowledge and respond to uncertainty in the
business environment and changing a strategic direction is a must for HSBC in these options.
Strategic option Types of risks Risk Justification
selected for Mitigati
HSBC on
Strategi
es
Differentiation Economic Risks-Bank might face Accept When the rates are being
for volatile foreign exchange risk in the risk fluctuating, they have to accept,
the new technology which affect understand and impose insurance,
for clients where they won’t forward contract for their
penetrate into the markets. sustainability.
Increasing NPA, per capita income
effect to this. economic slowdown
in the euro zone
Financial risks-When there is a Reduce Bank should spend more on
differentiation bank should invest the risk diversified products and measure
for the selected point of each risk using expected
differentiation due to diversified Value (EV) and sensitivity
technologies. Financial crime like analysis (SA) which helps to
identity theft or card fraud put check the profitability of the bank.
customers at risk. AML system tracking will benefit
to this.
Reputational Risk-When the Reduce Giving proper training, Whistle
differentiation strategy is imposing or avoid blowers will mitigate impact of
to the bank, there should have new the risk reputation risk. The reputational
changes for the system. There are risk matters are managed in a
different kinds of staffs at various globally consistent manner will
knowledge’s who cannot adopt for help to mitigate.
the new changes. It will effect to
service level and may lead to fraud
risk. Staff conducts and job
security.
Page 19 of 43
Business Risk- compliance risk Transfer Transfer the risk on differentiation

related to the differentiation of if the bank is unable to adopt for
digital products, aggregation of the changes. Introducing proper
account is high. Alliance risk also CRM system will reduce
involve in this specially having new customer complain.
sign up with companies. Customer
experience also affect to this.
Unable to adopt to the new
changes.
Product Economic risks- Accept In highly volatile market this will
development Economic risk is having a huge the risk affect to P&L. Hence we need to
impact for RWA where we should have proper product mix in
change one product category to advances and lending. New Tax
another (High risk product category implementation and government
gives high margin and low risk rules cannot avoid.
product category gives low
margins) that impacts for the
profitability of the bank. Under
scenario (Refer six page audit 09)
planning we make assumptions
which can be wrong as well as
scenarios too(Brexit decision,
emerging market economies and
rising demand for digital
banking).Sometimes, black swans
are things which we do not even
think of it (Sunami and pandemic
condition).Ring-fenced banking is
also an economic issue.
Financial Risks-It can impact for Reduce In the product development, bank
the profitability, liquidity, the should spend money for the
balance sheet and ROTE of the CAPEX. All these things should
bank. Where there is a product have a payback period,
development bank should invest for understand forecasted cash flows,
the capitals. Risk that interest rates net present values (NPVs),the
on the loans and deposits may economic values that it adds
change over the time. which is a feasibility part where
bank can understand whether it’s
fordable or not(FSA framework).
Reputational Risk –Loss of Avoid/ Here at HSBC chairman is not
corporate reputation impacts for reduce taking his personal responsibility
share price, investor confidence and the risk (CEO’s tax avoidance) in the
reduce the stock, gives operational product development which leads
issue, issue of data theft, closures to reputational setbacks, poor
and customer complaints. Conflict management in money
within organization. Lack the laundering, fraud and breaking,
technical capabilities. sanctions.
Market risks- Uncertainty about Transfer Have to control; cost to income
the types and extent of customer ratio and presence it the market.
needs that can be satisfied by a Timely and reliable knowledge
particular technology or new about customers with information
product. Lack of understanding of a reduce the market risk.
new product. Market competition
volatility. Brexit challenge
Table 12 - Strategic risk facing in HSBC and recommending risk mitigation strategy
Page 20 of 43
2.b.3 Conclusion:
Risk management process should be carried out continuously and systematically by identifying possible
sources of loss, and therefore risks. Primary role of risk management is to protect customers, business,
colleagues, shareholders and the communities that bank serve, while ensuring HSBC are able to support
its strategy and provide sustainable growth. Keeps a good record for types of risk arising from the bank;
auditing and inspection will help to monitor the risks. Whistle blowing policy is where people who
proactively inform the senior management there is a something goes wrong in investigating. HSBC
continue to enhance and advance data insights, data aggregation, reporting and decisions. HSBC carry
out ongoing improvement and investments in data governance, data quality, data privacy, data
architecture, machine learning and artificial intelligence capabilities. Risk management framework
(governance and structure, risk management tools and culture) help align employee behaviour with risk
appetite.
Economic outlook and capital flows, Geopolitical risk, libor transition, Climate-related risks were
adversely effect to the HSBC in some scenarios. HSBC risk management priorities focus on assessing
the transition and physical risk in wholesale credit portfolio, reviewing retail mortgage exposures in
respect of natural hazard risk, and developing scenarios for internal use in risk management, planning
and bottom-up stress testing. HSBC should alien with Contingency Plans to measure their ability to
withstand bank-specific or market crisis scenario. Expected losses can be covered by reserves and
provisions and unexpected losses require capital allocation. Hence bank need to have a vigilant
mechanism to monitor risk to safe guard their stake holders.
Page 21 of 43
TASK 3 – CUSTOMER RELATIONSHIP

MANAGEMENT
(Critically assess and appraise customer relationship management at Hatton National Bank)
Word Count – 1646 (Within 10% + variation)
To The Senior Management Team of Hatton National Bank PLC

Subject Critically assessment and appraise of customer relationship management at
HNB
Date 07-05-2020
Executive Summary
The purpose of presenting this report is to assess which customer management systems benefits to HNB
increase customer satisfaction and loyalty while analysing the HNB’s constraints limit success of
implementing the CRM techniques.
Page 22 of 43
3.a Organization Summary

3.a.1 Organization Name - Hatton National Bank PLC
3.a.2 Type of the organization
Hatton National Bank PLC (HNB) has been a leader in the banking industry in Sri Lanka for 129 years,
supporting the economic growth of the country. A public limited Company incorporated on 5th March
1970 under the Laws of the Republic of Sri Lanka. The Company was re-registered under the
Companies Act No 7 of 2007 on 27th September2007 (PQ82).
3.a.3 Size of the Organization

HNB is the 5thlargest public listed company by market capitalization at the Colombo Stock exchange
and ranked as the Sri Lankan entity with the 7th highest brand equity by Inter-brand (annexure -2).
Figure 1 - Physical Distribution and affirmation – Source annual report

Total assets Equity Operating Profit Profit Rating by Return on Deposits from Gross Loans
(Rs.) (Rs.) Income(Rs.) before after tax Fitch Assets Customers and Receivables
tax (Rs.) (Rs.) (Rs.) (%) to Customers
1,196Bn 150Bn 77Bn 29Bn 15Bn AA-(lka) 1.27 771,939 771,939
Table 13 - Financial Highlights of HNB Source (Annual Report of HNB 2019)
3.a.4 Product and services
Bank has arranged different products in line with each business segment. Those products are dedicated
for the participants for each business segment and they are more towards the enterprises of the economy
(annexure 3).
Figure 2 - product and services – Source annual report

3.a.5 Customer Base and main competitors
HNB serve to both B2B market and B2C markets. Higher portion comes from B2C since HNB is a
retail bank. HNB is currently more focus on opulent customers and blue-chip companies (Annexure –
7).
3.a.6 Summary of Stakeholders

The ultimate position is with the definite stakeholder that is the Central Bank of Sri Lanka who is
regulating the industry. HNB long term sustainability depends on strong relationship with stakeholders
(Annexure 4 &5)
3.a.7 Current approach to customer satisfaction and loyalty

HNB aspire to be recognized as the most customer centric bank, this is a high priority. HNB will also
leverage their relationships to Innovate and enhance customer value proposition, driving ultimate goal,
customer satisfaction (Annexure 6).
Page 23 of 43
3.b Critical evaluation of CRM techniques used by HNB to increase customer

satisfaction and loyalty
3.b.1 Introduction
CRM application define as enhances to develop and maintain long lasting relationship with customers
and explained fact of CRM such as strategic, operational, analytical and collaborative (Buttle, 2009).
HNB targets being at the top business banks in the market by improving assistance quality,
diminishing call surrender rate, aside from satisfying different goals lined up with client requests is a
must. HNB is currently looking for smooth CRM assistance tasks to improve their customer
engagement.
Identifying most profitable customers by using pareto policy, customer live time vale and behavioural
segmentation (annexure 8) is most use full to identify customer basket vale, Transaction volume/value
and the profit of the customer. This will help to do profitable business rather than just doing business.
3.b.2 Critical evaluation of CRM techniques from a strategic perspective of HNB bank
Current CRM Advantages and Disadvantages Customer Recommendations
techniques satisfaction
and loyalty
H/M/L
Sales Bank can easily see what products the H HNB can take all customers
automation customers currently use, what products to one platform/system.
(Annexure 09) they are eligible for and what the Currently, they are using
benefits should be added to the multiple channelled no
additional product or service. It’s easier integrated system to know
for management to project cash flows, about customer. Several
revenues, and sales pipelines. products using several
Can lead to inadequate communication Flat forms. This will be easy
between departments, required to do social marketing
experienced people, initial cost required, camping and follow-ups.
and has to engage in technological Oracle or Market is ideal for
updating of the system. HNB in present scenario.
Customer It generates increased sales M HNB had a negative
management Builds customer loyalty experience on data
(Annexure 09) Improves profitability, lowers price Management. One time they
Strengthens customer relationship get the warning from the
It gives banks proactive access to regulator due to
technology that helped them improve mismanagement of the Data.
customer retention by using product Since this is a good option to
bundling, Cross-sell as just additional secure customer data
money grab. accuracy and keep the
Implementation cost is high. integrity and Confidential.
It can disrupt the relationship with the
existing customers HNB has very low cross
selling ratio on their Product
basket. Front Liners are not
aware about customer. At
present only way they can
identify the customer by
looking at their physical
loyalty card only.
Customers should have a great
Customer experience from the first point of H HNB recently introduce
experience contact. Hence automated call centre
management however that process not give
Page 24 of 43
(Annexure 09) Provide good customer experience will 100% benefit to customers
help to new customer Acquisitions, due to lack of integrations.
Better Customer Engagement, Increased there for need to introduce
Customer Conversions, Reduced Cost multichannel integration with
of Service and Marketing and many proper equipped Customer
more. experience unit.
This will lead to less innovation and
implementation cost is high. Since all
customers are not same calculated risk is
high.
Affiliate Advocates is one of the most valuable H HNBs net promoter rate is
Marketing and cost-effective channels. This 64% is not enough to grow
(Annexure 09) channel Connecting, engaging and business from existing
building meaningful relationships with customers.
audiences than traditional marketing.
Motivation for both parties to engage in These techniques are highly
referral program is essential. High NPS recommended for financial
scores achieve a higher level of sector as Cost effective
profitability and more sustainable methods.
growth. Using customer surveys can
increase Current Satisfaction Feedback,
Tracking Changes in Feedback, and
Shows Commitment to the Customer.
Table 14 - Current CRM Techniques

3.b.3 Justification of recommended CRM techniques that can be used for strategic Benefits
3.b.3.1 Developing customer base

The bank needs to give sufficient consideration to build client base definitely. It is conceivable if the
exhibition is at agreeable level, the current customers can prescribe others to have banking association
with the bank he is they are associated. Hence forth looking for references from the current clients for
the forthcoming future clients can build up their customer base. In this way, the bank needs to actualize
parcel of imaginative CRM measures to catch and hold the clients. There is requirement for a move
from bank driven exercises to client driven exercises. It is the ideal opportunity for taking thoughts from
clients to improve its administration.
3.b.3.2 Improve Cross-selling Frame work

The arrangement presents a brought together 360° perspectives on the client, permitting single point
access to all the connections the client has fashioned with the bank. This alongside strong client
investigation viably bolsters genuine relationship banking, giving a hearty structure to strategically
pitching chances. CRM arrangement likewise coordinates with other white named answers for
encourage logical and customized client commitment, with a sharp spotlight on right-talk driven right-
sell.
3.b.3.3 Enhance Overall Profitability of HNB

CRM empowers banks to give representative's better preparing that encourages them handle clients
without any problem. It accomplishes better foundation and at last adds to better generally execution.
The results of CRM banking arrangements are client procurement, maintenance and gainfulness. Banks
that don't execute CRM will without a doubt end up with lesser benefit combined with a sharp decrease
Page 25 of 43
in the quantity of clients. Automation helps to maximize value from existing outsourced operations,
void costly investment in technology transformation while achieving planned objectives as well as
support business growth, processes, products, and innovations within the business model without high-
cost technologies that enhance the profit of the bank.
Page 26 of 43
3.c Critical appraisal of the organizational constraints impacting the successful

implementation of CRM techniques at HNB identified in task 3 (b).
Considering the factors causing the risk of failure in CRM will increase the understanding of how to
get a positive development for CRM System (Fjermestad & romano,2002). Kale (2007) argues that
CRM project failure ranges from 60-80. Hence identifying issues and risk factors in adaptation of CRM
is must. CRM is principally a business program, and it requires an authentic organization between
different offices to guarantee that both business and innovation issues are overseen successfully.
Moreover, CRM not just takes existing business forms and makes them increasingly effective, yet it
likewise requires these procedures to be changed. For a CRM usage to be fruitful, chiefs inside the HNB
need to ensure that all the partners comprehend and bolster the necessary procedure changes. (Annexure
10)
Effecting factor Critical appraisal of constraints

Culture When new technological systems and tools are implementing there will have
resistance for the changes. HNB is having hierarchical system in the
organization. The employees who are working at HNB they are reluctant to
adopt for the new changes. There are employees who are above 40 not easily
accepting for the innovative systems which can be crisis at HNB bank.
Human and Managers at HNB should have an important role by sharing CRM team’s
capabilities vision with the management. The leaders’ role has to be that of a facilitator for
implementing CRM. Effective Leadership skills result in the success of CRM
initiatives. Managers at HNB should have knowledge to operate and
implement innovative CRM model such as Dynamics 365 Microsoft, Oracle
CRM, Sales force, Adobe, SAP as well as data warehousing (data marts), IT
architecture. Therefore, bank should have trained staff to implement above
mentioned systems, if not there can be strategic uncertainty, diverting from the
core business, facing for banks when selecting strategic alternatives. Further,
there might be strategic risks like reputation visibility and vulnerability risk.
Data mining (Analytics, reporting; BI, data cleansing, ‘opt in’ permission
marketing,) Knowledge of GDPR are the CRM competencies which requires
capabilities to handle the business.
There are different kinds of employees at a different knowledge level, there
can be a dispute gaining the training on new innovative training programs.
Therefore, when they implement the new systems there might be minor errors
for the bank which can lead reduced profitability in the bank.
Technological Sales automation is presenting new innovative frameworks and hardware at
ability HNB. At the point when new IT frameworks, programming, and such are sent,
the manner in which individuals carrying out their responsibilities would
likewise change. It very well may be likewise being as Multi-Pronged Change
Strategy. Rather than surging, CRM group can lean toward a steady change.
Workshops and conceptualizing gatherings with deals, promoting, and client
support staff can be directed to examine CRM techniques. HNB do prepare
workers and as a matter of first importance, they attempted to change
representatives' outlook from activity driven to client driven ones. Change in
the executives is significant to advance client adjustment. Significant spotlight
depends on preparing to accomplish adjustment. There are different
programming apparatuses for CRM like Siebel frameworks for operational
CRM; Tera data for information distribution centre; SAS for information
Page 27 of 43
demonstrating exercises. HNB likewise build up an assignment administrator

program that causes agents to see 360-level of client see
Finance HNB use different CRM tools, platforms & applications such as Devices,
contact centre (in/out bound), e-commerce, POSM, Digital tools (AI, AR, VR,
MR), social media platforms, Cloud services, mobile or tab integration that
requires high trained staff.
HNB should spend more money for the software, training and equipment.
Therefore, there can be financial risk (shareholder value, investment, liability
and loss).
Structure When innovative system is introducing at HNB should focus on the structure
of the organization (structure of international reserves investment by
instrument) through CRM champion, key account management, lack of senior
management buy in and a CRM vision (leadership).
Table 15 - Constraints impacting the successful implementation of CRM techniques
3.c.1 Conclusion
Hatton National Bank PLC (HNB) has been a leader in the banking industry in Sri Lanka. Bank has
arranged different products in line with each business segment. HNB serve to both B2B market and
B2C markets. The ultimate position is with the definite stakeholder that is the Central Bank of Sri
Lanka. HNB aspire to be recognized as the most customer centric bank, this is a high priority. HNB
targets being at the top business banks in the market by improving assistance quality, diminishing call
surrender rate, aside from satisfying different goals lined up with client requests. Here, identified four
main techniques such as sales automation, customer management, Customer experience management
and Affiliate Marketing. Reduced costs, improve cost selling framework and enhance overall
profitability are the strategic Benefits of justified CRM techniques. There are constraints in the
implementation of CRM techniques at HNB through culture, human and capabilities, technological
ability, financial services and structure. Finally, HNB bank should implement automated integrated
system for the operations to get the high efficiency and profit for the business.
Page 28 of 43
Annexure 01 - Strategic Audit

1.SWOT Analysis
STRENGTHS OPPORTUNITIES
Strong financial performance - Total Assets $2,558 Bn, Deposits of Developing markets - Double the size of created economies by 2050,
$1,457 Bn, net loans of $981 Bn Profits rise in 2017, strong balance sheet, worldwide white-collar class development 2Bn+ by 2030 (driven by Asia),
revenue (Asia 48.6% $23.3 Bn, EU 30.2% $15.3 Bn), PBT $ 20 Bn (2018) China's belt and street, triple inland and seaward business in Brazil, business
16% YOY growth, revenue $54 Bn 5% YOY growth , ROE 8.6% (2018) clients need access to developing markets, growing in HK (high per capita GDP),
6.8% YOY growth, PBT 2018 – Co. Banking $7.7 Bn, RBWM $7.1 Bn, Mexico plan to be the fourth-biggest bank, Asia developing for as long as 30
GBM $6.1 Bn, GPB $344 Mn, GPB 16%+ YOY, RBWM PBT 9%+ YOY years, China, India loosen up their FDI limitations, incredible opening to seek
$7.1Bn Com Banking 12%+ (growth across all categories). after JVs and Associations, clients look astounding worldwide systems.
Process reengineering & automation -Data management tool for small Digital improvement – There is high availability, expanding network, powers
and medium enterprises, Link Screen (B2B), open banking first mover, AI worldwide progressions of exchange, fund and information, GDP empowering
for client intel utility, Robo adviser (wealth advice) ForgeRock (Identity agent 44% worldwide clients are carefully dynamic, clients look for openness,
management software). portfolio justification in the business in numerous nations.
Extensive Product lines- Retail banking and wealth management, global Create universal system - Serve cross outskirt Businesses and encourage int
banking and markets, commercial banking, global private banking. exchange, capital streams, influence arrange for development, turnaround US
business.
Strong sustainability reputation focus - Banking 320K homeless with Customer behavioural changes - simplified& Automation of process, personalized
Shelter & Crisis to claim benefits. products & experiences,
Strong brand equity- Brand centre (networks, availability, and worldwide Making the ring-fenced bank in the UK / Penetrate the UK & HK
correspondence) reflects (unwavering quality and notoriety for high business market- assist to increase market share. Biggest customer markets (UK $399 Bn, HK
principles), values (open, associated, reliable, honesty) $485 Bn)
New situating (trust, strength, and constancy), desire (being a world-driving Put resources into wealth and retail business locally - Leverage worldwide
universal bank, featuring society, networks, and working together). social portability, riches creation,
Lean management - Restructuring (exited 97 businesses, 20 countries, Open banking and growth in online & mobile banking -User access & control
redundancies), centralism, fewer systems, economies of scale, one over data, Enhanced Customer experience (speech, language & tone), re-launch
mission, shed 1000+ products, EU & US restructure. revamped App to new markets. Can get the first-mover benefit
Unique culture - Strong values, diverse (144 languages), 85.5% staff retention, Propelling HSBC University - Online and disconnected preparing, utilizing
48% Male & 52% female, rewards & recognition linked to values computerized instruments.
Global expansion- 40 Mn customers, 65 countries, operates in NA, EU, Quickening advancement through developing Fintech - Blockchain, API
ME & NA, Asia & LA, HQ in UK, corporate centre. 238 K employees, (open) banking, Mobile (Beta App), Distributed computing (bolster robotized
entrance to high growth markets, strategic Mergers & Acquisitions, Joint administrations), AI (online security, biometric innovation, unique mark and eye
Ventures, grown its international network, trading in different countries estimations, thumbprint, voice acknowledgment, facial sweeps), VR, MR, IBMs
(Mexico, Australia, France, Canada, USA, India, Malaysia, Singapore, psychological figuring stage Watson resource directors to discover openings and
UAE which is benefit for its asset and liability funding for its asset & dangers.
liability funding,
Strategic partnerships & Joint ventures -AT Institute (Econ data High market development rate - Global financial market is as yet growing
science), MOU Digital trade chain, Trade shift, Ayasdi AI start up, (benefits 2009 $115 Bn, 2018 $1,112 Bn 2019 $1,135 Bn), ROCE 2019 (Central
SpiceJet (mobile payment platform), Bib Fintech, political approval in Asia 23%, Africa 20%, Caribbean 19%, Asia 10%, EU 8%).
China, global payments through transaction processing.
Rich heritage - For more than 150 years we have connected customers to Strategic acquisitions &diversification - Strategic investments in retail
opportunities. We enable businesses to thrive and economies to prosper, (Jessops EU, Debenhams UK), invest in strategic Fintech start-ups.
helping people to realize their ambitions which ranked 9th in the world Improving subsidiaries business- Insurance, factoring, merchant services,
(Tier 1 Capital). leasing, pawning
WEAKNESSES THREATS
Unsuccessful processors & practices- Online banking system is not Rival against the competition - China has the world's best 4 biggest banks, US
working in UK which is the major issue (internet banking 64 %, mobile in fifth - eighth, Mitsubishi UFJ tenth, US banks are 40% productive resource
banking 35%), overdraft charges could Quadruple in UK (39.9% IR for use, China biggest, most noteworthy benefits, higher ROE and ROCE, EU Banks
NPA), £5 daily fee for going into an unplanned overdraft eliminated added (diminished their terrible advances and misfortunes and Spanish banks
interest-free buffer of £25 to bank accounts & Advance accounts, 26 Mn expanding their benefits), open banking, benefits in UK banks expanded by a
OD users in the UK , third in spite of Brexit, the same time behind French banks have higher ROCE.
Develop experience management - Ranked 10 out of 12 major banks on Vulnerability on Brexit - Impact UK, EU and worldwide financial part, hinder
reputation UK (62.6 scores). Two major services KPIs (NPS and speed neighbourhood gracefully chains and moderate worldwide development, UK
quality of complaint resolve)- UK NPS recommend 75% (2018), 72% banks may lose pass porting rights in EU, EU has 500 Mn clients, 22 Mn
(2017) & HK (2018) 71% & 72% (2017), Speed complaint resolution 2018 organizations
- 77% resolved the same day/next day (compared to 75% 2017), 14% of
complaints in 2018 took more than 5 days to resolve, compared to 15% in
2017.
Poor corporate governance and reputation record-Chairman is not Intervention of regulator and compliance requirements - Ring-fencing,
taking his personal responsibility, Swiss bank has assisted for tax evaders PSD2 legislation rules in the UK, information insurance, EU and CMA
which leads to reputational setbacks, poor management in money Directives on open financial guidelines, cloud innovation (more grounded
laundering, fraud and breaking sanctions will be impacted on the trade-in guideline required).
China with involvement in the arrest of CFO in China.
Adverse financials-PBT has decreased by 18% in 3 months Unpredictability of the environment - Interest rates in the US dollar BLOC
expected to fall, US-China taxes war (lose certainty, debilitate speculation
universally), US limitations on Chinese organizations.
There is no specific positioning in the world’s local bank – World local Data fraud & security risk - Money laundering, open financial API security
bank confused brand positioning (information encryption and insurance in the more seasoned advertise)
There is a high percentage of males in senior management Risk involvement - so many risks are involving such as financial crime risk,
reputational risk, operational risk
Lack of centralization- HSBC has a lack of centralization Consolidation or closures of branches - Australia 9% drop in banks, Germany
this has caused the Swiss scandal issue due to lacking of 450 branches, Citi bank 80% of branches in Korea, Netherlands decreased 50%
Monitoring system. branches in 10 years, In US industry close 2,624 branches, HK (buyers esteem
branches). sold out the Pakistan operation, sold subsidiary business in brazil
HSBC slow-moving in technology adoption. Organizational restructure in last 6 years- exit 97 businesses 20
countries, job losses (loss of customer interaction/relationships,
Page 29 of 43
2.Issues and Critical success factors and strategic plan

Key issues Critical Success factors Strategic Priorities- 5 years goal and objectives
Embrace banking technology –open Firmness - Low RWA, Revenue, PAT and PBT, Reduce cost to income ratio - Through lean
banking, Fintech, AI and cognitive positive cash flow, ROI management, consolidation, channel migration,
computing, cloud banking productivity measures,
Penetrate Emerging Market – Asia, Operational Excellence - Agility, IT infrastructure and Double PBT in 5 years
Mexico security, lean management
Drive Local Scale Through RBWM - Scale - Cross selling capability, number of customers, Optimizing branch network in high growth -
Large middle class, create a strategic CASA % (low cost funds), number of branches China (belt & road), India, Brazil, Mexico, leverage
lock in, troublesome HNWI international network, US Business
Rectifying Competitive Positioning - Spread of Products and Services - Covering all sub Increase ROCE(return on capital employed) –
Reputation,values, strapline, strategic segments Manage Expected credit loss/ Low income
intent, culture, Countries below industry averages
JVs, Long Term Strategic Alliances & Product innovation capabilities to offer differentiated Triple operating income - Emerging markets,
Partnerships- mutually beneficial services middle income segment, improve NIM's
Stakeholder Engagement - Prioritizing Risk management and Cost savings -is important Digital on boarding - 20% onboarding growth YOY
key stakeholders, expectation analysis tosurvive in highly competitive industry Increase market share by 40% in UK
Strategic Lock In - Primary Corporate Governance and sustainability Improve shareholder returns - ROE &Rote
Transactional Account, Cross selling, Framework - overcoming growth, sustained dividends, EPS
increase switching costs sustainabilitychallenges,Adopting to new regulatory
standards
Maintain strong market position-Segment value Asset growth - Reduce RWA, healthy LCR
proposition
3.Stakeholders expectation Analysis
Stakeholder Expectation Analysis Power Interest
Analysis
Internal Employees Acknowledgment, rewards, preparing, future ability advancement HSBC college, L H
'Associated Cash”, reasonable wages, honesty to serve better
Connected Customers Differentiation, secure exchanges, progressed monetary management, trust, flexibility, L H
constancy, mindfulness on new advances, Fintech education, updates also, better CRM
SME-Cheaper cost, separated item go, developments, help to development aspirations,
authority accounts, share information with outsiders
Suppliers Detailed view on offerings, buyer inclinations, security concern, CRM information L H
Shareholders Dividends(restructuring), buy-backs, ROE H H
External Regulators & Bolster organizations, ensure the economy, citizens, help (UK, International) H L
Governments
Media Online life utilization, emergency circumstances and publicizing H L
Local Impact of business changes to the culture, help for the society L L
communities
4.Machesney’s 7S 5.Cultural web
Strategy To be the global market leader in innovative digital
Stories 150-year heritage, established in 1836, launched
banking
first telephone bank, First Direct 24x12x365,
Centralized control system, 80% GM new appointments, M&S acquisition, biggest merger-Midland bank
Structure
global communication
with HSBC group
Fewer systems, customer data management system(cloud)
Systems HSBC university training, properly functioning finance Symbols Workforce diversity, HSBC secure key, head
system office in London, In-branch business specialists,
International Support Centre, Online
Style Autocratic is the leadership style
Knowledge center, contactless credit cards, HSBC
Values-critical to achieve HSBC’s ambitions-,
Link Screen, Selfie verification system, First
Dependable, Open for different ideas and culture,
open banking API, ForgeRock
Shared Connected customers, communities, regulators and
each other Power Structures Autocratic decision making by top level
Values Organizational Centralized control system, 80% GM new
HSBC brand reflects  reliability, reputation for high business standards
Brand values focus on  communities, connectivity and global Structure appointments, global communication
communication Control Systems CEO’s restructured system, in-branch specialist
More than 225000 diverse employee bases, going through Routines & Rituals Sponsorship of British cycling, trainings support
trainings support the culture, HSBC university for future the culture, Rewarding culture
Staff trainings, Paradigm Global leader in digital/mobile banking
, Better EOS, values for Risk Management and innovation by providing simpler better faster
Responsibility solutions with maintaining sustainable finance
Speak 144 different languages, enhance job related skills, focus
Skills
educational initiatives, digital tool ‘Connected Money’
6.Competitor Analysis
Figures in $ millions Industrial and China Agricultural Bank of JP Morgan Bank of Wells Fargo Citigroup Mitsubishi
Comm. Bank of Construction Bank of China America UFJ
China Bank China
Rank 2019(Tire 1) 1 2 3 4 5 6 7 8 10
Assets 3,970,000 3,020,000 3,280,000 3,050,000 2,600,000 2,500,000 1,930,000 1,700,000 2,800,000
Liabilities 3,640,000 3,640,000 2,810,000 2,800,000 1,380,000 1,700,000 1,700,000 2,650,000
Operating income 104,000 91,000 77,900 72,300 109,000 91,200 86,000 79,900 66,000
Net Profit 42,900 25,500 27,700 27,600 5,800
Market Capitalization 207,000 207,000 213,000 319,000 189,000 168,000 158,000 146,000
No. of employees 460,000 345,971 444,000 310,000 250,000 208,000 261,000 204,000 180,000
Net Profit margin 41.3% 28.0% 35.6% 38.2% 8.8%
Op. Income per employee 226,087 263,028 175,450 233,226 436,000 438,462 329,502 391,667 366,667
Net Profit per employee 93,261 73,706 62,387 89,032 - 32,222
Page 30 of 43
7.Porter’s Five Forces Analysis

Force Driver Implications Rating
Threat of new Economies of scale Having 3900 workplaces, 67 nations, 200000 investors in 131 countries. Low
entrants Product differentiation and brand Requires strong distribution network & strategies
identity Need of good RnD to innovate and stay competitive by offering new products
Capital requirements Need of large capital to start
Government policies New rules following Brexit/ rules & regulations in domestic markets
Threat of Relative quality and price of substitute It has a rich heritage and global coverage Low
substitutes products Increasing switching cost to customers
Customer brand loyalty Quality is a key factor for premium brands
Switching cost to buyers Low risk banks with more loyalty programs will have high switching cost
Bargaining Switching costs to use other products High secure banks with more loyalty programs imply customers have high cost High
power relative to the firms switching costs, of switching
of customers number of buyers relative to sellers, Provide an opportunity for the organisation to streamline its sales and
bargaining leverage production process
New products will reduce the defection of existing customers of HSBC to other
competitors
Bargaining Uniqueness of product - differentiation, Medium and genuinely low since the most of equity ways are same High
power brand reputation Certain markets are dominated by few suppliers by giving them high
of Suppliers Importance of suppliers input to buyer bargaining power
Developing dedicated suppliers whose business depends on the firm
Industry rivalry Number of competitors Large domestic & international players High
Relative size and power of competitors Defensive plan to be adopted for huge balance sheet competitors
Product innovation Industry growth to decline triggering battle for market share
Industry growth rate Effects on industry/ demand-supply patterns enforcing price cuts
Over capacity Exit is made difficult due to high investments
High exit barriers Collaborating with competitors to gain market share rather than competing for
small markets
FINTECH will differentiate and reduce market rivalry
8.PESTLE Analysis
PESTLE Driver Impact O/T Rating
Political Creating the ring-fenced bank in the UK May help increase market share O H
Legal Compliance to PSD2 standards New payment service regulations may impact processors T H
Tough new borrowing rules in the UK Credit scoring would need to be changed T H
EU & CMA directives on open banking regulations New competitors, accreditation & authentication TTP's T H
Increase in tax transparency May impact bottom line T H
Economic High growth GDP growth rates in emerging Global middle-class growth, 2X in size, driven by Asia O H
markets
Uplifting FDI restrictions (China & India) Great opening to pursue JVs & Partnerships O H
Volatile interest & Exchange rates US dollar BLOC may fall T H
US-China tariffs war Dip in business confidence, reduce investment globally T H
Brexit Inhibit local supply chains, loose PP rights, 500Mn EU T M
customers, 22 Mn businesses, relocation of EU BA from UK H
Social, Global social mobility Penetrate wealth & retail business locally O M
Cultural Changing consumer behaviour Personalization, banking made simple (All in one solutions) O H
Green consumers (low carbon, climate change, May held drive a strong CSR agenda O H
water)
Technological Digital banking (internet &mobile) Increases connectivity, global trade, accessibility O H
Open banking (API) Personalization, control, NPD, seamless, engage TPP's, O H
Fintech (block chain, AI, CC, VR, big data, 5G) Opportunity to accelerate innovation O H
Information security risks (Open banking) May increase fraud monitoring costs T H
Environmental Climate change More focus on sustainability growth through CSR activities O M
factors
9.Scenario Planning
Scenario Description Best Case Worse case
Planning
1.Brexit Decision Political and Economic HSBC has its opportunities to tap in new HSBC will lose EU Passport
by UK pressure to move out of EU emerging markets through expansion to rights,500Mn customers and 22mn
government zone as implication on the ASIA (China-India) and Hong Kong-Mexico. Business, which will reduce the CASA
Banking industry. market of HSBC.
2. Emerging Presently works in Asia, to get FMA, FDI unwinding in China, India, mid-class Abrupt financial, political changes in Asia,
market 75%group benefit from developing development more than 2bn from 2017-30 in UK industry psychologist to $9953bn
economies Asia in 2017, create methodologies Asia, twice created economies by 2050
for developing markets.
3. Rising convenience, increase the global flows 87% and 81% online/mobile banking Significant closure of bank branches,
demand for of trade, enabling GDP, CA user’s preference,3/4 own smart phones, laptops, customer criticism, 1/3 of people not
online, mobile preference for online banking, notebooks, 2/3 tablet in the family, 85% interested in using new features complex
and digital research findings on Millennials’ SME online usage, 58Mn registered online mobile banking tech, industry growth
banking trend for digital features. and use 20 times more than telephone decline- 2021
Page 31 of 43
10.Segmentation
RBWM (B2C)
Name of segment Premier Advance Grow
Product Mix Assets Pre-approved loan up to 15 * salary Pre-Approved loan 8* Salary Mortgage/cash backed loans
Liabilities Deposit of £50,000 Deposit of £5,000 Min Balance of £50
Credit/ Debit Titanium Premier Credit/Debit card Platinum Advance Credit/Debit Gold/ Silver Credit/Debit cards
cards Card
Demographics Income Salary £ 3,000 P/month Salary £ 1000 P/month Salary £ 300 P/month
Typical Age 40+ (Mass affluent) 26 - 40 (upwardly mobile) 18-25 (Career builders)
Profile
Cross selling Life & travel insurance, FX Personal loans, general insurance, Leasing, Personal loans,
products deposits
overdrafts, equity trading, Investment planners, mortgages Savings plans
Benefits Offers Luxury retail, hotel stays, Bill payment offers, rewards Retail discounts, fuel rebates
sought concierge points
Delivery channels Relationship Manager Mobile, Internet banking Banking kiosks, In branch, UK Post
Segment It’s time for a change Your home bank Experience the virtual security
Positioning
Current It’s the little things that makes a big difference
positioning
New Positioning We create your future today not tomorrow
B2B
Name of Corporates Mid -Market SME
Segment
Product Mix Assets Lending funds up to Lending funds up to £50Mn Lending funds up to
£100Mn £20Mn
Liabilities £ 10 million £ 4 million £ 1 million
Benefits Interest rate offers, renewal fee waive offers, technology offers and Fintech inter faces, forex product, raising capital on
sought debt and equity markets & advisory services
11.Net Operating income spread 12.Risk Radar Figure based on Table 22

Net Operating Income (Revenue)HSBC Figures in $ millions
2016 2017 2018
Retail Banking and Wealth 18,483 38.7% 20,220 40.1% 21,935 40.5%
Management
Commercial Banking 12,656 26.5% 13,247 26.2% 14,885 27.5%
Global Banking and Markets 14,807 31.0% 15,285 30.3% 15,512 28.7%
Global Private Banking 1,770 3.7% 1,723 3.4% 1,785 3.3%
47,716 100.0% 50,475 100.0% 54,117 100.0%
13.Return on capital HSBC -page 51 14.Product onion of HSBC
ValuePreposition Current VP Future VP
Core product Financial services focused on B2B and B2C customers on a local scale and
international 5 region
Generic Product Retail banking and commercial Private banking with new value
banking preposition
Expected product Investment services, online omni-channel banking services,
banking,telephone banking, loan Investment advisory services and
services assets management
Augmented Unique pass code, selfie verification, Open/API banking, social media
Product contact less credit card, link screen, payment
methods
Potential Product Beta mobile apps-safe balance, Fintech-Virtual branchless banking,
spend analysis virtual credit cards, cloud banking, bigdata
on advisory AI chat bots on help centres
15.Strategic intent
Intent Current Future
Vision We want everyone at HSBC to use their own judgment and make decisions for the right Be at the forefront of economic prosperity
reasons Sometimes, the best course of action is unclear, but we hope by focusing on the by focusing on communities, connectivity
interest of our customers and the communities we serve, we will also do what is right for & global communication
HSBC
Mission We believe that how we do business is as important as what we do. We want to achieve good Connecting the world by making banking
results in a way that treats our customers fairly and helps to strengthen communities and simpler, better and faster
ensure a properly functioning financial system. Our values are central to achieving these aims'
Values Dependable, open to different ideas and cultures, connected to customers, communities, Integrity, Accountability, Innovative,
regulators and each other Empowering, Transparent, Diverse
Strap line ‘Growing our business in the right way' Passionate in everything we do
Page 32 of 43
16.HSBC International Marketing Strategy

HSBCs Global 2018 HSBC global revenue $53.8 Bn, emerging economies 2X growth by 2050,
outlook Global middle class growth 2Bn+ by 2030, 44% global customers are digitally active (enabler),
40 Mn customers, Portfolio rationalisation in many countries (1000+), continue to strengthen international network,
65 countries Adopt wealth & retail business locally (leverage global social mobility, middle class growth, the segment of 1),
High market growth rate (profits 2009 $115 Bn), high adoption of internet & mobile banking,
Inconsistent global thematic positioning, Global restructuring& consolidation - exited 97 businesses, 20 countries,
redundancies, centralization, fewer systems

Market type Insights Current international marketing strategy
Europe UK - Ring fencing, 3X crop broking clients, increase advising Market penetration to increase market share, higher
UK, Spain, France, co's to 50 UK, 2nd largest customer market, increased profits fee income, improve capital efficiency
Germany despite Brexit (uncertainty), all time low reputation, Diversification - Strategic investments (retail)
500 Mn customers, Germany & Netherlands - Branch closures Consolidation to restructure and improve ROCE
22 Mn businesses Turkey - Divesting operations Strategic withdrawal to focus on emerging markets
30.2% revenue, Spanish & French banks - Increased profits & ROCE Market development for growth
8% ROCE in 2019, Strategic acquisitions - High growth potential
25% employees,
Middle East & Africa UAE - Low profits Market penetration - For deposits & trade promotion
UAE, Egypt Iraq - Exited market Strategic withdrawal to focus on emerging markets
20% ROCE (Africa), Egypt - $4.5 Bn growth in customer account value Market development for growth
4.5% revenue
ASIA China - Belt & Road initiative, relaxed FDI restrictions, US Market penetration for trade finance & GBM
China, India, HK, trade Market development - Increase B2B customer access
Vietnam, Japan, war, Top 4 banks in the world (highest profits), consumer Growth strategies - Strategic alliances, JV's
Australia, Malaysia, owned
Singapore, Indonesia data culture, WeChat payments, key emerging market
75% group profits HK - Customers value branches, $485Bn big customer market Penetrate for growth - Leverage high Per capita GDP
48.6% revenue, Market development - Market leader
growing for 30 years India - Relaxed FDI restrictions, profits fall by 44% Restructure to improve ROCE
ROCE 23% C Asia & Pursue growth strategies - Strategic alliances, JV's
rest of Asia 10%, Vietnam - Banks grew profits by a third Harvesting & market penetration
55% employees Singapore - Simplified banking, digital onboarding, Product augmentation & differentiation - Segment of 1
automation, rise in consumer-owned data culture (digital
banking)
Australia - 9% branch closures Consolidation - To restructure and improve ROCE
Japan - Low profits, ROA & ROCE, 10th largest bank Consolidation - To restructure and improve ROCE
Pakistan & Kazakhstan - Exited markets Strategic withdrawal to focus on emerging markets
Indonesia - Loss of -$400 Mn YOY to $3.8 Bn Consolidation - To restructure and improve ROCE
North America Mexico - Goal to be 4th largest bank, $20 Bn+ in customer Market development, Market penetration for growth
US, Mexico, Canada, account value
Malta - 11.5% revenue USA - 5th-8th largest banks, Sold CC business in NY, closed Restructure & turnaround US business
2600
branches, 40% efficient asset utilization, higher ROE & ROCE
Latin America Brazil - 3X onshore & offshore business, international office Invest for growth - Emerging market
Brazil - 5.2% revenue
17.Mendelows power & interest matrix 18.Geographical Revenue Mix
Geographical revenue mix RANK
INTEREST
High Low North America 11.50% 3
High Key Players Keep satisfied
Share Holders Government
Europe 30.20% 2
Regulators Middle East and North 4.50% 5
POWER
Media
Africa
Low Keep Informed Minimal Effort
Asia 48.60% 1
Employees Latin America 5.20% 4
Customers Society
Suppliers
19.Customer relationship management

CRM Technique Future opportunities
Acquire -Migrate swing generation to Online banking, increase online banking app use
-Self verification via mobile for B2c
-Penetrate online customers through (Utilities, loyalty and offers on retail brands )
Cross sell/ Upsell -Increase current account holders usage rate on local scale
-Cross sell pension investment & life insurance
-Cross sell online banking offers
Retain -Integrating the complaint making platform and ask for help through chat bot
-Enabling to transfer and receive credits to your account and to others through app
Advocates -CLV measures and life cycle management program
-Listening to customers and responding them more customized manner on real time
Page 33 of 43
20.Product Market Strategy – Ansoff, Growth Metrix 21.New Competencies

Product New competencies
Existing New Dominate digital banking
Market penetration Product development API banking security verification
Core target markets with a large Products with enhanced Local retail insights of emerging markets
digital marketing reach security - Virtual pins, Sharing best practices
advanced biometrics Strategic stakeholder engagement
Penetration pricing Augment (added value) through
Existin Corporate sustainability
digital banking
g Build local retail scale with RBWM Open banking solutions, Mobile NPD & Innovation process
beta app Cross selling - Big data analysis
Cross, up selling strategies using Salary (loans/ overdrafts) Social media listening - Engage real time with
Marke
CRM bundled offer customers
t
Leverage ring faced banking Social media interfaces Reinventing business model
opportunity Corporate governance
Market Development Diversification Fostering strategic partnerships
Align GBM business strategies with Invest in promising Fintech
sectorial growth start ups
Increasing connectivity in emerging Cloud, AI and Cognitive
New markets computing
Engage millennials with new digital Strategic investments in retail
features and other high
Turnaround US business yield non banking business
Exploit Belt & Road trade flows
22.Risk Matrix
Categories of Type of Risk Implication of the risk Rank Strategic
risk Response
Economic risk Economic risks - Growth, Per capita income 'UK·· May increase NPA, Reduce CASA, social pressures H Reduce
Brexit EU PP rights, 500Mn Customers, 22 Mn Businesses H Accept
Foreign exchange risk May impact clients in GB & M markets H Reduce
Business Risk Compliance risk (PSD2/ CMA directives) TTP verification, aggregation of accounts H Accept
High-street branch closures Increased customer complaints, loss of reputation M Transfer
Credit risk (Portfolio risk) Reducing group RWA, 55% UK industry bank credit L Reduce
Concentration risk (segment) Focus on RBWM and BB, mis selling mortgages, PB M Reduce
write offs
Alliance risk Partners, Suppliers may damage reputation M Transfer
Industry/ Hyper competition May drive down margins H Reduce
Market risks
Negative banking growth forecast Increase branch closures, Increase cost/income % H Reduce
Money laundering Is a growing concern and may attract regulatory scrutiny M Reduce
Political risks Political instability Impact relaxed FDI restrictions and business continuity M Prevent
Reputational Sustainable finance Focus on sustainable finance, CSR, environmental issues H Avoid
risk
Fraud risk and financial crime 'Transparency & May damage corporate governance record H Avoid
conduct··
Job security and losses Unionization, brain drain M Reduce
Lawsuits (Madoff Fraud) and financial crime Can impact corporate reputation H Avoid
Media manipulation Corporate governance record M Avoid
Staff conduct (CEO's tax avoidance) Negative exposure, whistle blowers M Reduce
Physical Risks Hazards (Health & safety / risks) May impact employer brand L Reduce
23.Resources Capability analysis - Internal environment analysis
Unique Resources Core competency (Current) Competitive advantage
(Current)
Reach - Global network Global banking and marketing financial advisory services Creating strong point of differentiation (Positioning approach)
Number of customers Lean management (restructuring) Create a strategic lock in and increasing exit barriers (RBV)
Strategic acquisitions Brand equity - Strong values and culture, Pursue in organic growth strategies (RBV)
Global Platform Sales prospecting - In branch business specialists Market penetration /Economies of scale (RBV)
Financial strength Transactional processing of Global Payments VRIN
Rich heritage Securing Strategic sponsorships - British cycling (8 year Disproportionate contribution
deal)
HSBC university Brand management Extendibility
Strategic partnerships Prudent risk management - Low RWA Competitively unique
Page 34 of 43
Annexure 02 - Financial strengths
Bank contribution against the group
Source – HNB Annual Report 2019
Page 35 of 43
Annexure 03 - Range of products and services
Product category Sub category Products

Personal Savings, loans, cards, General savings, minor savings,
remittance, current account, youth savings, term deposits,
promotions and leasing personal loans, home loans,
international debit cards, HNB
credit cards, correspondent
banks, remittance houses, share
line current account, general
promotions, card promotions
Corporate Trade services, treasury, Insurance of bank guarantees,
Islamic banking and general international trade services,
services Project financing
Business SME banking, development SME lending, commercial or
banking, e-business solutions, project lending, distributor or
micro finance supplier financing, HNB
payfast ,HNB MOMO, SME E-
solutions,HNB payee partners
Annexure 04 – Key Stakeholders benefit (Impact on HNB stakeholders)
Customers Employees HNB Group Business Investors Community Government

partners
Supporting Rs.11.4 Bn Rs.56.4 Bn Rs.10 Bn Rs.15.0 Bn Access to Partnering
growth Remuneratio NII Purchase PAT finance growth of the
n economy
Employment Rs.48.2 Mn Rs 10.0Bn Cash 22,000+ Rs.13.8 Bn in
creation in training & Net fee & dividends benefited Taxes
development commission Rs.2.3Bn through 650+
income capacity
building
programmes
Wealth Personal Increase Total 37,344 loan
Creation growth brand value Dividends disbursed to
Rs 4 Bn SME & finance
sector
Granting Helping them to Support
moratoriums overcome from government
economic issues on economic
crises
Page 36 of 43
Annexure 05 - How HNB Listen to their stake Holders and Mendelow’s Metrix
Prioritizing stakeholders using Mendelow's Matrix
Page 37 of 43
Annexure 06 - Current approach to customer satisfaction and loyalty at HNB
Key initiatives during the year for customer satisfaction 2019

Launch of HNB SOLO – Digital Wallet
HNB mobile digital vehicle
BOM Rollout - New branch operating system launch
Launch of contact centre customer satisfaction survey/strengthen the customer experience unit
E – banking enabled CASA opening
Missed call service
Expanded network of exchange houses
Introduce loyalty programs for club and priority customers
Process improvement to credit card issuance and personal loan process
Introduce loyalty card for leasing and housing loan customers
Key indicators Numbers

No of Customers 2,623,038
No of Branches 252
Branches per 100,000 11
Population
Customer Satisfaction NPS 64
Page 38 of 43
Annexure 07 - Competitor Analysis
Presently 25 commercial banks and 7 licensed specialize banks are operating in the Sri Lanka. Key
competitor is the commercial bank among the private sector banks. PB and BOC operate as government
banks.
Source – Corporate websites of Banks
Source – KPMG Sri Lanka Banking Report
Page 39 of 43
Annexure 08 - CRM implication
Pareto Principle - According to this principle 80% of the volume comes from the 20 % customers.
Hence this is known as 80/20 rule. However, use of incomplete or inaccurate cost information and not
proven hypotheses on customer buying behaviour make this rule difficult to apply. Therefore, using this
method correctly bank can identify correct clusters to promote their product and services. Identifying
most profitable customers by using pareto policy, customer live time vale and behavioural segmentation
is most use full to identify customer basket vale, Transaction volume/value and the profit of the
customer. This will help to do profitable business rather than just doing business.
E.g.: HNB segment their credit cards according to customer’s segments.
Card category Criteria
Classic Lowest grade card less benefits to customer
Gold Second income layer
Platinum Executive and above
Signature Top management and SMEs owners
Infinity Highest grade card highest benefits to customer
Sometimes, classic card holders are the highest usages of the card rather than the infinity users. There
are the more interest payers to the bank. Some customers are just keeping the account for salary
remittance and no other product use by them. There are cost creators to the bank. If bank has good CRM
system, they can identify correct clusters to invest. Identifying most profitable customers by using
pareto policy, customer live time vale and behavioural segmentation is most use full to identify
customer basket vale, Transaction volume/value and the profit of the customer. This will help to do
profitable business rather than just doing business.
Customer Life cycle
There are three main strategies such as acquisition strategies, customer retention strategies and anti-
churn strategies. Early engagement in the first 100 days is required for the acquisition strategy.
Customer retention strategy can be categorized in two ways such as least profitable customers as well
as most profitable customers. Cross sell, up sell and re-sell which are least profitable for customers.
Customer relationship management strategy and key account management give most profitable
customers. Anti-churn strategy lapses customer analysis and customer win back strategies.
Page 40 of 43
Behavioural segmentation is a form of marketing segmentation that divides people into different groups
who have a specific behavioural pattern in common. Users may share the same lifecycle stage,
previously purchased particular products, or have similar reactions to your messages
Data-Based Approach to Customer Segmentation in Banking
HNB’s highest total income received from

the retail banking sector. It’s relatively easy to
build profiles based on customer information and
make strategic decisions to target segment and
implement strategic plan to improve customer
engagement get more business.
Segment Contribution to Total Operating Income relative to Assets & Liabilities in HNB
Page 41 of 43
Annexure 09 - CRM Technique

Techniques Description
Sales Automation Conversion funnel (Marketo, Sales force, MS),
100 day early engagement, Social media on
boarding
Customer Management Retention strategies, Inactive activation,
anti-churn (attrition) strategies, cross selling
(Average products/customer, suggestive selling,
up selling, product bundling).
Customer Experience Management Multi-channel integration, Loyalty program, 360
(one) view dashboard, Customer journey and
touch point analysis, instant gratification
(personalization), satisfaction surveys, e mail
marketing, behavioural data, employee
engagement & incentives, digital tools, process
workflow automation (AI & machine learning),
CRM Value proposition, continuous
improvement, knowledge management
Affiliate Marketing Advocates, NPS, referrals, exit surveys
Annexure 10 - Constraints of CRM

Cost factors Description
CRM systems Investing in a CRM System (Dynamics
365 Microsoft, Oracle CRM, Sales force, Adobe, SAP),data warehousing
(data marts), IT architecture
CRM tools, platforms Devices,
&; applications contact centre (in/out bound), e-commerce, POSM,
Digital tools (AI, AR, VR, MR), social media platforms,
cloud services, mobile or tab integration
CRM competencies Data mining (Analytics,
reporting & BI, data cleansing, ‘opt in’ permission
marketing, Knowledge of GDPR
Structure & Culture CRM champion, key account
management, lack of senior management buy in and a
CRM vision (leadership), changes resistance
Page 42 of 43
References
Sri Lanka Banking Report [Online] Available at: https://assets.kpmg/content/dam/kpmg/lk/pdf/sl-
banking-report-issue03-2h18.pdf [Accessed 07may2020]
Levin, R., 2009. How to Win in A Tough Economy with Superior Customer Service. Alpha Omegan,
102(3), pp.98-100
A Data-Based Approach to Customer Segmentation in Banking [Online] Available at: https://us.hitachi-

solutions.com/blog/customer-segmentation-in-banking/ [Accessed 07may2020]
Lewie, D. (2013). Strategic marketing: marketing strategies for Sri Lankan business entities.
LewieDiasz.
Finextra Research. (2019). Banking Modernization: Is It A Communication Breakdown?. [Online]

Available at: https://www.finextra.com/blogposting/16810/banking-modernization-is-it-a-
communication-breakdown [Accessed 09 may 2020]
Balmer, John M.T and Gray, Edmund R (1999), Corporate identity and corporate communications:
creating a competitive advantage, Corporate Communications: An International Journal, Vol.4, No.4,
pp.171-176
Annual Reports
•Annual Report of Hatton National Bank PLC – 2018
•Annual Report of Hatton National Bank PLC-2019
•Annual Report of Seylan Bank – 2018
•Annual Report of Sampath Bank – 2018
•Annual Report of Commercial Bank of Ceylon PLC – 2018
•Annual Report of HSBC PLC – 2018
Research Papers
• Deloitte Digital readiness paper 2017
Page 43 of 43

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ASSIGNMENT SUBMISSION FRONT SHEET

CIM Membership Number: 40053628

Module Title: GLOBAL MARKETING DECISIONS (2304)

Qualification: Postgraduate Diploma in Professional Marketing - Level 7

Cambridge College of Business and Management – Sri Lanka

Candidate Declaration Statement:

*dependent on the requirements of the assessment brief.

By checking the box below: I certify that

 This assignment/project is the result of my own independent work/investigation except where

Tick here to opt out ☐

Format and Presentation

 Has the word/page count been adhered to? ☐

 Have tables/diagrams/images been made context-specific and numbered/labelled

 Has Harvard Referencing been followed and used as required? ☐

 Has a bibliography been included (where required)? ☐

 Are page numbers correct and tasks clearly identified? ☐

GLOBAL MARKETING DECISIONS (2304)

Total Word Count -5215 (Within10% + Variance)

3.a.6 Summary of Stakeholders ................................................................................................................ 23

Table 1 - Critical evaluation of the impact of MACRO drivers ........................................................................... 8

Figure 1 - Physical Distribution and affirmation – Source annual report ........................................................... 23

Task 1 - HSBC Strategic Position in the global

Word Count -1373

To The Senior Management Team of HSBC

1. a.2.1 Critical evaluation of the impact of MACRO drivers

Macro drivers Critical evaluation Impact

1.a.2.2 Critical evaluation of MICRO Industry related drivers

Micro drivers Critical evaluation Impact

Table 2 - Critical evaluation of MICRO Industry related drivers

1.a.2.3 Critical evaluation of HSBC’s Internal Environment

Internal drivers Critical evaluation Impact

1.a.3 The 3 type of strategies which involve in strategic position

Comparative Strategy Product & Market Strategy Growth strategy

Table 4 - Current strategy analyse

1.b Critical evaluation of the appropriateness of the current international marketing

Table 5 - GE matrix HSBC

Table 6 - Advantages and disadvantages of HSBC Markets

1.b.4 HSBC Degree of adaptation to current market

1.b.6 HSBC’s overall extent of success in handing the market

Market type Culture Factor Demand Revenue Rate Rank

Task 2 - HSBC Strategic options to grow and

To The Senior Management Team of HSBC

2.a.2.1 Differentiation strategy - Point of differentiation

Big date embracing machine learning to make

2.a.2.2 Product development strategy

Business Risk- compliance risk Transfer Transfer the risk on differentiation

TASK 3 – CUSTOMER RELATIONSHIP

Word Count – 1646 (Within 10% + variation)

To The Senior Management Team of Hatton National Bank PLC

3.a Organization Summary

3.a.3 Size of the Organization

Figure 1 - Physical Distribution and affirmation – Source annual report

Figure 2 - product and services – Source annual report

3.a.6 Summary of Stakeholders

3.a.7 Current approach to customer satisfaction and loyalty

3.b Critical evaluation of CRM techniques used by HNB to increase customer

Table 14 - Current CRM Techniques

3.b.3.1 Developing customer base

3.b.3.2 Improve Cross-selling Frame work

3.b.3.3 Enhance Overall Profitability of HNB

3.c Critical appraisal of the organizational constraints impacting the successful

Effecting factor Critical appraisal of constraints

demonstrating exercises. HNB likewise build up an assignment administrator