Case Study Analysis

Analysis of HSBC’s Global Business

The Hong Kong and Shanghai Banking Corporation (HSBC) is the perfect definition of a global business. Indeed, the bank is even referred to as a multinational local bank. To demonstrate why HSBC is a multinational business, it is important to trace the roost of its operation. The organization was founded in 1865 to finance trade between Hong Kong and China. Before, the occurrence of World War 2, HSBC already had extensive operations across the Asia Pacific Region. In particular, it operated in Japan, Thailand, the Philippines, and Malaysia. Whereas the bank had a small presence in the Western World, it embarked on aggression expansive program after the Second World War by engaging in a series of acquisitions. The bank managed to establish operations in the Middle East, London, Latin America, New York and Paris. To spread its global reach, the company listed on the New York, London, Paris, and Hon Kong Stock Exchanges, and shifted its corporate headquarters to London. Such a move illustrated the company’s ambition to become a truly global operation and it managed to realize this ambition as it now has a robust network of 4,000 offices in 70 countries.

            Currently, HSBC has four global business and the bank operates in five regions spread across the world. Overall, the bank has managed to build a global network centered on the world’s most important trade corridors to ensure that it takes advantage of economic growth on different regions and build deep ties.

Analysis of Lubricador’s Strategy

Lubricador SA is an Italian firm that specializes in the production of chemicals for industrial purposes. The company is aiming to venture into the Chinese domain since it has become the second-largest car market in the world. In particular, there is a high demand for brake fluid additive and the company is looking at four strategies to venture into this market segment. The first strategy is setting up a greenfield operation and operates as a 100% subsidiary.  The greatest advantage of this strategy is that the company would have total control of its subsidiary and take up all of its profits However, the strategy’s most significant drawback is the huge capital outlay required to set up such an operation. It is a risky move that will hurt the company’s bottom line if the investment does not pay off. The second strategy entails the acquisition of its Japanese competitors’. It is a beneficial strategy since it will enable Lubiracdor to control a large share of the market. Nonetheless, the acquisition of its competitors is a challenging move for the Italian firm since it will have to come up with an effective strategy to maintain the prevailing culture in these firms. If it does not maintain these cultures, the company will struggle to maintain its current market share.