HSBC 2001 Annual Report Download - page 10

HSBC HOLDINGS PLC
Description of Business (continued)
8
HSBC considers the quality of its management
to be one of its principal strengths. HSBC’s
management is an international meritocracy which
combines detailed knowledge of local markets with a
global perspective. By long-standing tradition and
continued policy, HSBC recruits most executives for
long-term careers with the organisation. HSBC
attaches great importance to cultivating its own talent
and to promoting from within the organisation. It
values team work and a collective management style.
Senior management succession is seamless. Lines of
communication are kept short and speed of decision-
making is emphasised.
Strategy
HSBC aims to become the world’s leading financial
services organisation. HSBC’s goal is to balance
earnings between stable, mature economies and the
faster-growing, but more volatile, emerging markets.
To achieve this, HSBC has developed a strategy of
‘Managing for Value’ designed to build on its
achievements. This strategy is evolutionary and has
four key components:
• To concentrate on delivering ‘wealth
management’ to key markets around the world.
Wealth management means deepening
relationships with personal customers beyond
the provision of a simple cheque account and
lending products. HSBC will offer these
customers the full range of financial services and
products, including savings, pensions,
investments and insurance. In none of HSBC’ s
primary markets is this business fully mature
and there are strong growth prospects.
• To grow its commercial business.
This market consists of a wide range of
businesses, including major companies, trading
enterprises, professional practices, charities,
entrepreneurs and smaller businesses. HSBC has
been very successful in this market and aims to
build on its strengths, in particular by making
sure its customers have access to a full range of
products and services.
• To integrate corporate and investment banking
services for HSBC’s largest customers.
A major effort has been to align more closely
HSBC’s traditional corporate banking and credit
services with the skill base and professional
expertise available from its investment bank.
The alignment of these businesses will help
HSBC meet the requirements of its clients –
some of the world’s largest and most successful
companies.
• To establish HSBC and the hexagon symbol as a
global brand.
This major initiative, begun in 1998 has been
successful in making the name, HSBC, and the
hexagon symbol a familiar sight around the
world. HSBC aims to make the HSBC brand
universally synonymous with its core values of
integrity, trust and excellent customer service.
HSBC’s strategy focuses principally on organic
growth, but it also allows for opportunistic
acquisitions where these meet certain stringent
criteria. HSBC’s approach to acquisitions is based on
added value. When considering acquisition
opportunities, HSBC applies strict criteria and takes
full account of the fact that the price paid determines
the rate of return to shareholders.
Over the years, HSBC has successfully acquired
a number of businesses which have provided access
to new markets or an opportunity to expand existing
business lines. HSBC uses its strong capital base and
depth of management resources to develop such
businesses into long-term generators of wealth for its
shareholders.
HSBC’s strategy calls for a continuous focus on
its customers, providing them with secure,
transparent and competitive services in the forms
most attractive to them. One of HSBC’s primary
initiatives in this area is its HSBC Premier service,
launched simultaneously in 17 countries and
territories in March 2000. The HSBC Premier
service is a new international service for HSBC’s
most valuable personal customers. The 464,000
HSBC Premier customers worldwide have available
to them a dedicated team of relationship managers,
HSBC Premier centres in selected locations around
the world, and 24-hour call centre support. To
further service its high net worth customers, HSBC
has successfully integrated its major private banking
operations into an international private banking arm
which bears the name HSBC Republic. HSBC seeks
to position itself as one of the world’s top five
private banks.
HSBC intends to remain at the forefront of its
industry and recognises the importance of the
internet as one of a number of exciting new media,
which will become an integral part of its service.
HSBC believes that e-commerce has changed the