Abstract
The Hong Kong banking sectors does
have innovative opportunities for small and medium-sized enterprises upon
extending the customer base within the global marketplace. However, SCB and HSBC
will need to adopt such approach to financial planning and management which
deploy an effective banking network by linking towards a better financial
approach determining financial statement in its value and strength. This
research represents better framework for analysis and crafting of financial
patterns of SCB and HSBC in their business strategy pointing to the management
as well as execution of finance factors into SME context. This research
investigation can be that the banks involved can achieve better financial status
and competence without experiencing much delinquency of such financial
statements found in cash flows and balance sheets with HK banking competencies
for managing business relations as well as engagements with other banking
sectors (in, Venkatraman and Henderson 1998).
INTRODUCTION
1.1
INTRODUCTION
Financial
statement is an important indicator wherein the strength of SCB and HSBC is
looked upon in its business strategy towards SMEs in Hong Kong, there can
accounts for delinquency and such pricing relationships in such financial
statement understanding. The comparative analysis of SCB and HSBC can be
supported by such case study evaluation and is backed up with qualitative and
quantitative approach for research study as the banking sector in HK is aware of
determining strength over delinquency when talking to effective presentation of
financial statements in such cash flows and balance sheets of the two banks that
can be ideal for SME assimilation into the HK region.
Background for the research
Financial Institution such as the SCB
and the HSBC incurs a useful potential to play major role in finance through SME
companies in Hong Kong. With increased global competition, the finance function
can be exploited to allow HSBC for instance, to gain financial advantage in the
HK market stance as there can be delinquency of banking operations affecting the
overall indication of the financial statement and its ways. There has to be
comparative case study between SCB and HSBC respectively. The methodology value
by then, can be based on literature studies of the two banks through such
reviewed studies on small and medium-sized in HK with the objective of
understanding the background of the bank’s financial strength and how it relates
to pricing opportunities as the banks do strive to become more finance
competitive. The data required for case analysis have been collected by
interviewing several senior managers of SCB and HSBC within a standard
questionnaire. Aside, SCB and HSBC’s annual reports and statements have been
referred for the collection of accurate data. The main objective of the research
is to understand how the two banks developed good financial strength over the
years, avoiding delinquencies to the financial statements. Thus, analyzing
history of the company, its strategy and goals, strategies as well as the
process they used to bring the company to the position as of the present.
For example, major banking decisions
should involve the volume and timing of orders and deliveries and the packing of
items in consolidation. There are several constraints influencing the level of
stock and the speed of the material flow along the banking logistics chain. The
level of stock and the speeds the material flow also depend upon the nature of
the supply and demand. Transportation or shipping involves such matters as the
modes of transportation, utilization of available capacity, scheduling of
transportation equipment and maintenance of transportation facilities. Next
comes capacity planning. The management of both long-term and short-term demand
drives the level of capacity required. The study examines different banking
approaches to determine whether a bank will be associated with good financial
concepts and will focus on certain clients. Hong Kong is a Chinese-dominated
society with different types of banks and this allows for cross-section of cases
in order to test the reality and applicability of research over financial
statements with specific relationships such as pricing within the banking
service ways. In order to clarify objectives of whether there is a indication of
delinquency of SCB and HSBC statements that can adhere if there impose a good
borrower of the banks into customer awareness and such hypothesis are developed
as below.
RESEARCH HYPOTHESES
H1.
There is effective strength into
financial approach of SCB in comparison to HSBC knowing
whether certain profitable company shown in the
financial statement would be more attractive borrower
H2.
There is no effective strength into financial approach of SCB in comparison to
HSBC knowing whether certain profitable
company shown in the financial statement would be more attractive borrower
CONTRIBUTIONS TO RESEARCH AND PRACTICE
The
research calls for precise execution of factual knowledge supporting financial
strength over delinquency within SCB and HSBC as geared towards SME’s in HK.
Hence, for practice the recognition of resources to research and its evidences
will amiably be a part of the whole continuum basically, achieving details of
banking finance statements through cash flows and balance sheets and the
underlying issues within finance sectors of SCB and HSBC in order to fully adopt
and execute in the hope of maintaining good banking business in Hong Kong.
RESEARCH
APPROACH
The ideal
research approach significant for this study is by means of vivid realization
and precise applications of a comprehensive and detailed research paradigm
through assimilation, collation and clear understanding of research information
and evidences in forms of relevant research materials as directed to financial
aspect of the banks as supported by reliable case studies presented through
academic journals and articles as based on the topic. The content involvement
within the literature plays a vital factor also for the research approach to
value application of financial approaches within SCB and HSBC case patterns and
such financial context and principles.
THE REVIEW OF
LITERATURE
SMALL AND
MEDIUM SIZED ENTERPRISES
The ability of SMEs to gain competitive advantage is thought to be related to
issues of marketing, market research, marketing strategy, new product
development, the technologies and processes and, the manufacturing and
operations strategy adopted and not only have SMEs limited financial resources
in terms of acquiring suitable technology, but they also lack human
capabilities, which contribute to a general lack of skills and knowledge within
the organization to cope with new ideas, concepts and technologies.
The relevance
of innovation in gaining and maintaining enterprise competitiveness has been
widely addressed in the managerial literature (in, Freeman, 1997; Chan et al.,
1993; Grosse, 1996; Medina, 1996). Successful enterprise analysis clearly shows
that triumph mainly derives from innovation oriented managerial and
organizational processes. First, the innovation process involves huge financial
resources, and is quite risky (in, Baldwin and Scott, 1987). Then, such elements
are undoubtedly better managed by big firms because of the greater funds
available and the possibility of diversifying risks implementing several
research projects. Moreover, it often happens that innovations allow
diversification strategies which may be better pursued by large organizations
rather than SMEs. With specific respect to product innovation, it is critical to
have already established commercial channels enabling economies of scale in
production and sales activities. In particular, the primary research highlighted
that the banks inability to allocate better finance ways will be in favour of
more banking growth in certain areas.
INFORMATION ON SCB AND HSBC
Standard Chartered Bank (SCB)
SCB is known and
trusted for having high standards of corporate responsibility as the bank is
committed to building sustainable business through social inclusion,
environmental protection and good governance, by
combining the global capabilities with deep local knowledge, SCB develop
innovative products and services to meet the diverse and ever-changing needs of
individual, corporate and institutional customers in some of the world's most
exciting and dynamic markets. There is about SCB in terms of their SME Banking
which offers variety of products and services to help small and medium-sized
enterprises manage the demands of growing business through providing global
support in Standard Chartered, the bank knows that doing business in today's
economic climate is challenging and situations as well as business needs can
change overnight as the SCB can help SMEs in HK for such business expansion
plans. The SME Banking team is dedicated to the people and the business thus,
helping SME business reach ample potential by means of customize product
packages, responsive services and access to expert advice incurring effective
business operations. Thus, at SCB such benefits are possible such as enjoying of
preferential pricing on business transactions, gain rewards on banking services
rendered and have unlimited access to products and services through SCB
relations executives.
Thus, there can be about cash
management when dealing to SME ways such as for example, when
making important business decisions, it's vital that the business have accurate
and updated financial information in Standard Chartered, the bank provide tools
needed to manage business cash flow efficiently and effectively. Then, at SCB
SME Treasury Services plays a vital role, by having such international network
of more than 1,500 branches in 50 countries across Asia, SCB gives unlimited
access to expert advice and regular market updates at SME Treasury Services, the
services and solutions are designed to help minimize foreign exchange risks and
have competitive rates for a range of foreign currencies. Standard Chartered
Bank, in their products will help businessmen to manage their exposure on the
foreign currencies and interest rates that are associated with international
trade. Thus, allowing cross-border financing by having products and services in
order to meet cross-border financing needs of subsidiaries, affiliates or
associates that are incorporated in diverse jurisdiction to that of the parent
company. The presence of SME Mortgages can be effective through loans to help
finance owner-occupied and investment property purchases ideal for commercial
use within Hong Kong.
Adopted at: <http://www.standardchartered.com/about-us/en/index.html>
As the
Standard Chartered Bank is one of the pace
setters in Asian and African corporate citizenship. Its chief operating officer
presented some of the company’s work at Ethical Corporation’s recent Asia
conference in Hong Kong with the fact that Ben Hung, the Hong Kong-based chief
operating officer of Standard Chartered bank, is well versed in corporate
responsibility bodes well for the future of corporate citizenship awareness
across the region. Hung’s brief was to discuss how the company handles its
approach to corporate social responsibility across region where differences in
operating environments are particularly marked. Standard Chartered has 12 senior
managers in Hong Kong, the other of its two main bases being London. One third
of the Hong Kong senior team are women. Hung acknowledged that although this is
a start the company is “by no means perfect” on this area of diversity.
SAMPLE SCB FINANCIAL STATEMENTS
Cash flows from operating activities
Profit before taxation 629,526 561,759
Adjustment for :
Dividend income ( 713) ( 713)
Depreciation 18,491 30,372
Gain on disposal of property, plant and
equipment (81) (259)
Gain on disposal of securities
available-for-sale (33,479) (17,416)
Amortization of premium less accretion of
discount
on securities available for sale 25,081 29,394
Operating profit before working capital changes
638,825 603,137
Changes in working capital:
Deposits and placements with banks and other
financial (5,027,400) (1,486,186)
institutions
Securities purchased under resale agreement
13,524 862,851
Securities held for trading (1,034,043) 81,126
Loans, advances and financing 249,170
(2,257,691)
Other receivables (533,417) (254,483)
Statutory deposits with Bank Negara Malaysia
(13,441) (92,000)
Deposits from customers 5,366,317 5,700,099
Deposits and placements of banks and other
financial (597,271) (2,661,184)
institutions
Securities sold under repurchase agreements
(1,177,842) 1,345,942
Bills and acceptances payable 136,865 347,201
Recourse obligations on loans sold to Cagamas
(189,263) (10,750)
Other payables 571,000 306,527
Cash (used in)/generated from operations
(1,596,976) 2,484,589
Income taxes paid (219,891) (201,763)
Net cash (used in)/generated from operating
activities (1,816,867) 2,282,826
Cash flows from investing activities
Dividend received 713 713
Purchase of property, plant and equipment
(12,845) (21,424)
Proceeds from disposal of property, plant and
equipment 81 259
Purchase of securities available-for-sale
(14,603,129) (12,133,870)
Proceeds from disposal of securities
available-for-sale 16,067,641 10,782,002
Net cash generated from/(used in) investing
activities 1,452,461 (1,372,320)
Assets
Cash and balances at central banks 8,991 11,813
7,698
Financial assets held at fair value through
profit or loss 9 19,344 13,082 15,715
Derivative financial instruments 10 18,441
12,721 13,154
Loans and advances to banks 11 21,108 16,750
19,724
Loans and advances to customers 11 151,953
119,550 139,307
Investment securities 13 52,230 46,037 49,497
Interests in associates 257 206 218
Goodwill and intangible assets 6,217 4,459
6,179
Property, plant and equipment 2,302 1,767 2,169
Deferred tax assets 522 492 519
Other assets 11,890 7,653 8,601
Prepayments and accrued income 3,571 3,618
3,268
Total assets 296,826 238,148 266,049
Liabilities
Deposits by banks 14 26,846 21,994 26,233
Customer accounts 15 160,242 130,176 147,382
Financial liabilities held at fair value
through profit or loss 8 13,117 8,420 9,969
Derivative financial instruments 10 19,235
13,390 13,703
Debt securities in issue 16 27,254 24,953
23,514
Current tax liabilities 131 410 68
Other liabilities 17 13,733 11,198 11,357
Accruals and deferred income 3,008 2,430 3,210
Provisions for liabilities and charges 42 56 45
Retirement benefit obligations 18 356 466 472
Subordinated liabilities and other borrowed
funds 19 13,279 10,805 12,699
Total liabilities 277,243 224,298 248,652
Equity
Share capital 20 701 667 692
Reserves 21 18,324 12,683 16,161
Total parent company shareholders’ equity
19,025 13,350 16,853
Minority interests 22 558 500 544
Total equity 19,583 13,850 17,397
Total equity and liabilities 296,826 238,148
266,049
* Amounts have been restated as explained in
note 30 on page 61.
Indeed, in Hong Kong, where Standard Chartered
Bank PLC generates approximately one-third of its revenues, the banking
environment has changed rapidly in recent years. This has forced financial
institutions to become more nimble and creative with customer offerings or to
pay high price for failing to do so. Beginning in the mid-1990s, the Hong Kong
Monetary Authority (HKMA) deregulated interest rates on short-term time and
savings accounts, as well as demand deposit (checking) accounts. Interest rates
became highly competitive, but parity products made it much more difficult to
attract or retain customers based on rates alone. At roughly the same time,
virtually all of Asia was impacted by the “Asian Economic Crisis,” a major
economic downturn that sent property values plummeting by up to 60%. Sales
volumes slowed to a trickle, creating fierce competition among banks for a
smaller number of loans. This squeezed margins razor thin, as financial
institutions fought to retain their customers. There was also a considerable
amount of industry consolidation, as financial institutions merged or acquired
other banks that were a good fit. Even Standard Chartered got into the act,
acquiring the assets of Chase Manhattan Bank’s Hong Kong-based retail banking
business. Thus, Standard Chartered Bank knew that to stay ahead of some of its
more agile competitors and retain its best customers, it needed to reinvent
itself in the area of service. The company turned to Oracle [Siebel] to address
these many challenges. “In the past, it was fine to have relatively standard
products and sell them in standard ways--and the ample margins would ensure a
profit,” Parker remarked. “We decided that, strategically, the ground that we
needed to play on was brand assurance, customer focus, and quality service.” The
bank recently moved swiftly and decisively to develop and implement a sweeping
change program called Customer One. Designed to achieve market differentiation
and enhance employee satisfaction, the ambitious business transformation
strategy sought to strengthen the bank’s brand identity and help the bank become
more customer-focused and performance-oriented.
Apart from the Bank's on-going support in
extending loans to small and medium-sized enterprises, SCB has also joined with
the government and private sectors to set up various activities in support of
SMEs, such as radio programs, exhibitions, seminars, advice on investment
opportunities and SME fairs to promote the distribution of quality SME goods. In
addition, the Bank has SMEs Online services, which allows SME customers
to conduct financial transactions with the Bank through their personal
computers.
HSBC
HSBC’s strategic direction reflects its
position as ‘the world’s local bank’ with its uniquely cosmopolitan
customer base. Group strategy is
aligned with the key trends shaping the global economy. HSBC recognizes
that emerging markets are growing
faster than developed economies, world trade is expanding at a greater
rate than GDP, and life expectancy
is increasing virtually everywhere. HSBC is, therefore, reshaping its
business by investing primarily in
the faster growing emerging markets and, in developed markets, focusing
on businesses which have
international connectivity.
The first half of 2008 saw the most
difficult financial
markets for several decades, marked by
significant
declines in profitability throughout much of
industry,
with consequent recapitalization and
restructuring as the HSBC was not
immune from the
turmoil.
Financial strength maintained
HSBC’s commitment to maintaining its financial
strength is unwavering. HSBC remains both strongly capitalized and liquid. The
tier 1 capital ratio was 8.8 per cent and tier 1 capital grew by US$6.2 billion
during the period. We have maintained our key credit ratings, generated good
profitability in adverse market conditions and continued to focus investment on
our strategic priorities. The principal concerns in this environment have been
risk management, strict cost control, supporting customers and continued
investment to support long-term strategic ambitions in broad-based and resilient
revenue streams continue to provide stable platform from which to achieve
strong, long-term performance. The economic and financial environment in the
first half of the year deteriorated progressively. In the major developed
economies where we operate, economic growth slowed as asset prices, particularly
of residential property, declined; this in turn affected consumer confidence and
hence spending. In credit markets, illiquidity remained a major issue, with
trading volumes low and no sign of resumption of normal activity levels in the
securitization markets.
HSBC’s strategic direction reflects its
position as ‘The world’s local bank’, combining the largest global developing
markets banking business and a uniquely cosmopolitan customer base with an
extensive international network and substantial financial strength. The Group’s
strategy is aligned with key trends which are shaping the global economy. In
particular, HSBC recognizes that, over the long-term, developing markets are
growing faster than the mature economies, world trade is expanding at a greater
rate than GDP and life expectancy is lengthening virtually everywhere. HSBC’s
strategy is focused on delivering superior growth and earnings over time by
building on the Group’s heritage and skills. Its origins in trade in Asia have
had a considerable influence over the development of the Group and, as a
consequence, HSBC has an established and longstanding presence in many
countries. HSBC is progressively reshaping its business by investing primarily
in faster growing markets and, in the more developed markets, by focusing on
businesses which have international connectivity. Central to these reshaping
activities is a policy of maintaining HSBC’s capital strength and strong
liquidity position.
HSBC FINANCIAL STATEMENT
Depreciation, amortization and impairment
................................................ 1,766 1,184 1,338
Gains arising from dilution of interests in
associates ................................. – (1,076) (16)
Revaluations on investment property
.......................................................... (27) (48)
(104)
Share-based payment expense
.................................................................... 427
413 457
Loan impairment losses gross of recoveries
............................................... 10,436 6,635 11,547
Provisions for liabilities and charges
.......................................................... 107 282 707
Impairment of financial investments
.......................................................... 418 18 86
Charge for defined benefit plans
................................................................. 234 342
385
Accretion of discounts and amortization of
premiums ............................... (461) (392) (57)
12,900
7,358 14,343
Change in operating assets
Change in prepayments and accrued income
.............................................. 2,294 (2,280) (2,789)
Change in net trading securities and net
derivatives .................................. (29,675) 10,487 (15,459)
Change in loans and advances to banks
...................................................... 1,605 (357)
(8,565)
Change in loans and advances to customers
............................................... (76,452) (66,739)
(65,147)
Change in financial assets designated at fair
value .................................... 2,923 (5,872) (7,488)
Change in other assets
.................................................................................
(1,826) (924) (11,405)
(101,131)
(65,685) (110,853)
Change in operating liabilities
Change in accruals and deferred income
.................................................... (4,219) 547 4,572
Change in deposits by banks
.......................................................................
20,947 29,661 2,933
Change in customer accounts
...................................................................... 63,277
84,496 115,310
Change in debt securities in issue
............................................................... (16,522)
(1,086) (11,403)
Change in financial liabilities designated at
fair value ............................... (181) 5,755 6,549
Change in other liabilities
...........................................................................
6,093 3,875 8,886
69,395
123,248 126,847
Cash and cash equivalents comprise
Cash and balances at central banks
............................................................. 13,473
16,651 21,765
Items in the course of collection from other
banks...................................... 16,719 23,152 9,777
Loans and advances to banks of one month or
less .................................... 244,608 220,136 232,320
Treasury bills, other bills and certificates of
deposit
less than three months
.............................................................................
28,067 32,684 41,819
Less: items in the course of transmission to
other banks ........................... (15,329) (20,339) (8,672)
287,538
272,284 297,009
Interest and dividends
Interest paid
.................................................................................................
(31,752) (31,002) (32,624)
Interest received
..........................................................................................
53,945 47,423 55,970
Dividends received
......................................................................................
1,339 1,426 407
The HSBC Group has
an international pedigree which is unique. Many of its principal companies
opened for business over a century ago and they have a history rich in variety
and achievement. The HSBC Group is named after its founding member, The Hong
Kong and Shanghai Banking Corporation Limited, which was established in 1865 in
Hong Kong and Shanghai to finance the growing trade between China and Europe.
The inspiration behind the founding of the Bank was Thomas Sutherland, a Scot
who was then working as the Hong Kong Superintendent of the Peninsular and
Oriental Steam Navigation Company. Then, HSBC helps SMEs grow as in addition to
financial services, HSBC helps small and medium-sized enterprises grow their
business by becoming more profitable and productive as well as by providing
counseling services. Supported by the Business Environment Council and the Hong
Kong Council of Social Service, the Living Business program have ideal
components such as the annual HSBC Living Business Awards recognizes socially
and environmentally responsible SMEs in Hong Kong, through seminars where SMEs
can get practical advice on sustainable business practices and the website which
provides information and advice on a range of corporate responsibility issues
The Bank provides various counseling services to help SMEs develop and grow
their business. Since 2001, HSBC has supported the Business Advisory Service
program organized by the Hong Kong Trade Development Council.
Financial Statements
Indeed, objective of financial
statements is to provide information about the financial strength, performance
and changes in financial position of an enterprise that is useful to a wide
range of users in making economic decisions and it should be understandable,
relevant, reliable and comparable. Reported assets, liabilities and equity are
directly related to an organization's financial position. Financial statements
are intended to be understandable by readers who have "a reasonable knowledge of
business and economic activities and accounting and who are willing to study the
information diligently. Then, SCB and HSBC require financial statements to make
important business decisions that affect its continued operations.
Financial analysis
is then performed on these statements to provide management with a more detailed
understanding of the figures as these banks are external users can be outside
the business but need financial information about the business for diverse
number of reasons. They are financial institutions able to decide whether to
grant company with fresh
working capital
or extend debt
securities to
finance expansion and other significant expenditures.
Cash Flow Statements
In
financial accounting,
cash flow statement or statement of cash flows is a
financial statement
that shows company's incoming and outgoing
money during a
time period as the statement shows how changes in
balance sheet
and
income accounts
affected
cash and cash equivalents,
and breaks the analysis down according to operating, investing, and financing
activities. As an analytical tool the statement of cash flows is useful in
determining the viability of company, particularly there can be accounting
standards that deal with cash flow statements. The balance sheet is a
snapshot of a firm's financial resources and obligations at a single point in
time, and the income statement summarizes a firm's financial transactions over
an interval of time. These two financial statements reflect the
accrual basis accounting
used by firms to match revenues with the expenses associated with generating
those revenues. The cash flow statement includes only inflows and outflows of
cash and cash equivalents; it excludes transactions that do not directly affect
cash receipts and payments. The cash flow statement is intended for providing
information on the bank's
liquidity and
solvency and
its ability to change
cash flows in
future circumstances as well as improve the comparability of performance by
eliminating the effects of different
accounting methods
and to indicate the amount and probability of future cash flows as involved as
the standard financial statement because it eliminates allocations which might
be derived from different accounting methods.
CONCEPTS OF FINANCIAL STRENGTH
The term “financial strength” is
used in this paper to describe the extent to which an entity is
constrained by its financial situation in pursuing its strategic goals or
policies. An entity is financially strong when it is relatively
unconstrained and weak when financial constraints are binding on policy
choices. The financial strength of the banks is intimately linked to the
successful management of the enterprise. Hence, enterprises with a large market
capitalization have either been successful at generating earnings in the past
and/or are expected to be profitable in the future. In a competitive market
environment, profitability or market capitalization should be correlated with
economic efficiency. Thus, these measures of financial strength would reflect
efficient production of whatever good or service is produced by the enterprise.
In less competitive markets, profitability is less likely to be correlated with
economic efficiency and indeed, basic microeconomics demonstrates that a profit
maximizing monopolist will produce an output at a lower than socially optimal
level and charge a higher than socially efficient price. More generally,
short-term profitability may not be reflective of economic efficiency. Random
factors which management may not reasonably have been expected to hedge against
can impact profitability even if management performance is exemplary and
economic efficiency maintained. That said, enterprise financial strength and
profitability over an extended period can be said to be accurate summary metrics
of the relative efficiency and effectiveness of enterprise performance.
Furthermore, what appears to be confusion over micro and macro performance is
responsible for a certain lack of general understanding about the importance of
central bank financial strength. SCB and HSBC financial accounts do provide
useful information on the cost of achieving policy outcomes. Indeed they provide
information vital to any discussion as to whether the outputs are being attained
at least cost. The bank deals in financial markets to achieve policy goals, not
to maximize its revenues. For this reason the level of operating expenses is a
better indicator of the bank’s stewardship of public resources.” In exploring
precisely whether financial performance and financial strength of the bank
impacts policy performance it must be noted that in a number of countries the
bank is financially so strong that it is very difficult to imagine it becoming
an obstacle to policy and the focus of the public discussion in those countries
is squarely on the micro elements of central bank performance. When the issue of
financial strength does arise in those countries, it is difficult to argue that
a marginal deterioration in HSBC bank financial strength for instance would be
inimical to macroeconomic performance—and indeed in those countries that is
correct. For that reason, when central bank losses do occasionally arise there,
the debate naturally tends to center not on policy constraints but on the rather
remote notion of financial insolvency.
SCB and HSBC
financial strength is positively associated
with good policy performance. Financially weak central banks generate losses
which undermine macroeconomic stability and call into question the credibility
of their policies. In assessing central bank financial strength a careful
examination of the policy regime and the volatility of the economic environment
is necessary. Conventional measures of private enterprise financial strength,
profitability and capital can be very misleading when applied to banks.
METHODOLOGY
Research Design
The descriptive method of research
was used for this study. To define the descriptive type of research, Creswell
(1994) stated that the descriptive method of research is to gather information
about the present existing condition. The emphasis is on describing rather than
on judging or interpreting. The aim of descriptive research is to verify
formulated hypotheses that refer to the present situation in order to elucidate
it. The descriptive approach is quick and practical in terms of the financial
aspect. Moreover, this method allows a flexible approach, thus, when important
new issues and questions arise during the duration of the study, further
investigation may be conducted.
Quantitative data collection
methods are centred on the determination of the weighted mean of the given
statements. When these methods are used, the researcher is usually detached from
the study and the final output is context free. Measurement, numerical data, and
statistics are the main substance of quantitative instruments (2003). With these
instruments, an explicit description of data collection and analysis of
procedures are necessary. Quantitative approach is useful as it helps the
researcher to prevent bias in gathering and presenting research data.
Quantitative data collection procedures create epistemological postulations that
reality is objective and unitary, which can only be realized by means of
transcending individual perspective. This phenomenon in turn should be discussed
or explained by means of data analysis gathered through objective forms of
measurement. The quantitative data gathering methods are useful especially when
a study needs to measure the perception of the respondents regarding the topic.
The purpose of the quantitative approach is to avoid subjectivity by means of
collecting and exploring information which describes the experience being
studied (2003).
The questionnaire was structured in such a way
that respondents will be able to answer it easily. Thus, the set of
questionnaire was structured using the Likert format with a five-point response
scale. A Likert Scale is a rating scale that requires the subject to indicate
his or her degree of agreement or disagreement to a statement. In this type of
questionnaire, the respondents were given five response choices. These options
served as the quantification of the participants’ agreement or disagreement on
each question item. The following output
was revealed:
Recommendations
In this research study, it becomes apparent that
SCB and HSBC in their
banking strategy is among the vital
aspects for SMEs in HK to succeed and meet the goal of having satisfied clients.
From this discussion, several important points had been suggested. In order for
SCB and HSBC to stay competitive, their
pricing strategy must comprise the requirements of the first two of the ten ways
in varying the price (see, Appendix two) which are: keep the same price
currently charged but give clients greater banking products quality and keep the
same price currently charged but give quantity of a particular item. In this
manner, SCB and HSBC
are trying to keep their basic prices for
that would meet the demands of the customers regarding music listening. Great
offers with affordable cost have been the basic pricing strategy used because
SCB and HSBC
knew that there are many competitors in the
field. SCB and HSBC
must be able to utilize each chosen
business model to generate loyalty among its customers. They must have the
capability of prioritizing their customers giving all they wanted and trying to
provide a product that would get them involved in the process.
Appendix One
Research Questionnaire
Part
I. Demographic Profile
Directions: Please fill up in all
the necessary information about yourself. Don’t leave any item unanswered.
a.
Age ________
b.
Gender
Male ( ) Female ( )
Part II. Perception of the Study
Direction: Check the
number corresponding to your answer
5 -
Strongly Agree
4 -
Agree
3 -
Uncertain
2 -
Disagree
1 -
Strongly Disagree
1. Perception of Respondents Regarding SCB and
HSBC
|
Statements |
5 |
4 |
3 |
2 |
1 |
|
1. With respect to banking strategy, SCB
and HSBC has been able to initiate efficient and effective strategy to
meet the needs of the customers. |
|
|
|
|
|
|
2. Staff or employees understand the
mission, vision, and goal of their present organization as part of their
efficient finance strategy |
|
|
|
|
|
|
3. SCB and HSBC adopts a financial driven
strategy to satisfy the needs of the clients. |
|
|
|
|
|
|
4. HK banking industry handles customer
relations effectively. |
|
|
|
|
|
|
5. With the help of the current SME
realization, SCB and HSBC enables to understand and reach out to the needs
of clients |
|
|
|
|
|
|
6. The management of SCB and HSBC address
the need to cope with different financial statement for finance strength
and development. |
|
|
|
|
|
|
7. The banking management does respond to
such ample need to have qualified and competent auditors and finance
personnel as part of the business strategy. |
|
|
|
|
|
|
8. SCB and HSBC used efficient banking
communication approach to satisfy customers. |
|
|
|
|
|
Appendix Two
Examples of Ten ways to vary the Price
-
Keep the same
price currently charged but give the customer greater (or lesser) product
quality.
|
-
Keep the same
price currently charged but give the customer a smaller (or larger)
quantity of a particular item.
|
-
Change the
time of payment, such as by allowing a customer four months to make
payment.
|
|
-
Offer a
rebate or a dollars-off coupon.
|
-
Provide cash,
quantity, and/or trade discounts.
|
-
Charge
different prices to different types of customers.
|
-
Charge
different prices based on the time of day, month, or year.
|
-
Offer to
accept a trade-in from the customer.
|
-
Accept
partial or full payment in the form of goods and services instead of money
|
-
Bundle the
product or service with other products and services and charge a single
price lower than the combined individual prices.
|
http://moneycentral.msn.com/investor/charts/chartdl.aspx?Symbol=hbc
http://www.corporateinformation.com/CompanySnapshot.aspx?cusip=C82641970
