ASSIGNMENT 2 FRONT SHEET

Qualification BTEC Level 4 HND Diploma in Business

Unit number and title Unit 1: Business and Business Environment

Submission date 2/11/2020 DateReceived1stsubmission

Re-submissionDate DateReceived2ndsubmission

Student Name Lưu Hoàng Văn Student ID GBS200453

Class GBS0901_NX Assessor name Nguyen Ngoc Danh

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I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I understand
that making a false declaration is a form of malpractice.

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P4 P5 P6 M3 M4 D2

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Contents
Introduction .................................................................................................................................................................. 5
Macro environment ...................................................................................................................................................... 6
PORTER’S FIVE FORCES ............................................................................................................................................ 6
A. Bargaining power of Buyers ......................................................................................................................... 6
B. Bargaining power of Supplier ...................................................................................................................... 7
C. Threat of new entrants ................................................................................................................................ 7
D. Threat of substitutes .................................................................................................................................... 7
E. Industry rivalry ............................................................................................................................................. 8
PESTLE ....................................................................................................................................................................... 8
A. Political factors: ............................................................................................................................................ 8
B. Economic factor ............................................................................................................................................ 9
C. Social factor ................................................................................................................................................ 14
D. Technology factor....................................................................................................................................... 21
E. Environmental factor ................................................................................................................................. 21
Strengths and Weaknesses ......................................................................................................................................... 22
Strengths ................................................................................................................................................................ 27
Weakness................................................................................................................................................................ 27
Pestle implication analysis .......................................................................................................................................... 28
Technology ............................................................................................................................................................. 28
Business decision scenario. ................................................................................................................................ 28
Scenario analysis ................................................................................................................................................ 29
Competition strategy: ........................................................................................................................................ 32
SWOT .......................................................................................................................................................................... 33
Strength .................................................................................................................................................................. 33
Weaknesses ............................................................................................................................................................ 34
Opportunity ............................................................................................................................................................ 36
Threat ..................................................................................................................................................................... 37
Conclusion................................................................................................................................................................... 39
Porter ...................................................................................................................................................................... 39
Pestle ...................................................................................................................................................................... 39
Strength and Weakness of Standard Chartered in Vietnam ................................................................................ 39
Pestle implication analysis ..................................................................................................................................... 40
SWOT ...................................................................................................................................................................... 40

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Introduction
As previously mentioned in my earlier report about Standard Chartered, I had demonstrated about the
potential of Standard Chartered. Today, my mission is to analyze the internal and external report about
the company.

A brief summary about Standard Chartered, they are a banking company based on the UK. Their primary
role is to provide banking and financial services. The company headquarter is located in London, England.
With a slogan of “Driving Commerce and Prosperity through our unique diversity”, their operation has
expanded over 1200 branches and outlet operated across 70 countries.

In this report, I will talk about the macro environment, which include Porter’s five forces model along
with PESTEL strategy in Standard Chartered, their impact in the general company business. Identified
their positive and negative of such strategy, giving advice and comment of a particular aspect of the
strategy so as we can get the idea how these affect the company as a whole.

Then I will mention about the strengths and weaknesses of Standard Chartered in term of Human
resource and market resource.

Then I will give an example about their business decision, their strategies, actions plan, investment
decisions, and developing decisions. I will also take in consideration about how PESTLE and competitive
force affect this plan. Give a detail SWOT analysis about Standard Chartered then compare to the other
company.

And finally summarize and give a conclusion to all the stats and key point of the analysis.

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Macro environment
PORTER’S FIVE FORCES

A. Bargaining power of Buyers

Buyers have the tendency of demanding. What they want is to buy the best product but pay the minimal
amount. This create pressure on Standard Chartered profitability.

In order to tackle this problem, Standard Chartered need to:

• Build a large base of customer: this will reduce the bargaining of the buyer and provide
opportunity to the company in order to streamline sales and production process.
• Constantly innovating new product to lower the price of old product: discounts and offerings
are buyers favorite. So rapidly innovate on new product will give an opportunity on lowering the

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 price of old product and limit the bargaining of buyer. Not only that, new product will encourage
to stay with the brand instead of changing into competitors.
B. Bargaining power of Supplier

Company usually buy raw material from several suppliers. This create a problem that dominant supplier
can affect the margins of a company especially Standard Chartered. Powerful supplier often use their
negotiation skill to push the price higher this will affect the overall profitability of Standard Chartered.

There are several ways that Standard Chartered can try to take on this problem:

• Build an efficient supply network with a variety of supplier

• Experience many different materials from various of supplier, technique in product design to
optimize product cost.
• Developing dedicated supplier whose business depend on Standard Chartered: Much like Wal-
mart or Nike, they have developed a network of third party suppliers whose business rely on
them. This leads to less bargaining power.
C. Threat of new entrants

New entrant brings many opportunities and innovations to Standard Chartered. But they also put the
company on many new challenges such as lower pricing strategy, reducing costs, and providing new
value propositions to customers. So far, Standard chartered has been building effective barriers to
safeguard its clients.

To solve this problem, Standard Chartered need to implement these tactics

• Innovating on new product and services. This bring in new customer and give old customer
reason to keep comeback to Standard Chartered
• Build an economy of scale in order to lower the fixed cost
• Investing in money on research and development because it less likely that new entrant will enter
such a dynamic industry where many big companies like Standard Chartered dominated.
D. Threat of substitutes

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Substitutes formed when there are many similar products in the market, this made the industry suffers.
Products such as Google Drive and DropBox are very similar to each other, that is a substitute. The threat
of substitute is high when the value proposition of a product is uniquely posited on the market.

Several ways to accommodate this problem:

• Being service oriented rather than product oriented.

• Understanding the core value of the product bring to the customer.
• Increasing switching cost.
E. Industry rivalry

Rivalry among company in the industry make the price go down, this will affect the overall profitability of
the company especially in a very competitive environment such as banking industry.

In order to be competitive in the market, Standard Chartered need to:

• Distinct itself from competitor

• Building scale so that it can compete better
• Collaborating with other company.

PESTLE
A. Political factors:

As mentioned previously, Standard Chartered main operation is about providing banking and financial
service across the continent, their business is heavily relied on each nation politic. It plays a significant
role in Standard Chartered long-term profitability. This business made them expose themselves from a
variety of political environment and political system risks. The achieved success in such dynamics Bank
industry from all over the world is depend on the diversified of systematic risks of political environment.

It can be seen that Standard Chartered has been closely analyze these following factors before investing
in a certain market.

These factors included:

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 • Political stability and importance of Banks sector in the country’s economy.
• Risk of military invasion
• Level of corruption — especially levels of regulation in Financials sector.
• Bureaucracy and interference in Banks industry by government.
• Legal framework for contract enforcement
• Intellectual property protection
• Trade regulations & tariffs related to Financials
• Favored trading partners
• Anti-trust laws related to Banks
• Pricing regulations – Are there any pricing regulatory mechanism for Financials
• Taxation — tax rates and incentives
• Wage legislation — minimum wage and overtime
• Work week regulations in Banks
• Mandatory employee benefits
• Industrial safety regulations in the Financial sector.
• Product labeling and other requirements in Banks

B. Economic factor

Divided into 2 environments:

1. Macro environment:
• Inflation rate
• Saving rate
• Interest rate
• Foreign exchange rate
• Economic cycle

These are the factor that influenced the aggregate demand and aggregate investment of an economy.

2. Micro environment

Micro environment impacts the competitive advantage of the company. Standard Chartered usually use
nation economic factors like growth rate, inflation and & industry’s economic indicator to forecast
growth trajectory of individual sector and organization itself.

Individual factor that Standard Chartered take in to consideration when conduct a PESTEL analysis are:

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 • Type of economic system in countries of operation – what type of economic system there is
and how stable it is.
• Government intervention in the free market and related Financials
• Exchange rates & stability of host country currency.
• Efficiency of financial markets – Does Standard Chartered Plc needs to raise capital in local
market?
• Infrastructure quality in Banks industry
• Comparative advantages of host country and Financials sector in the particular country.
• Skill level of workforce in Banks industry.
• Education level in the economy
• Labor costs and productivity in the economy
• Business cycle stage (e.g. prosperity, recession, recovery)
• Economic growth rate
• Discretionary income
• Unemployment rate
• Inflation rate
• Interest rates

Unemployment rates and decline in working hours caused by COVID-19 table

Source: https://www.developmentaid.org/?fbclid=IwAR3W8KdBgtZhLV3Jcn_xpy0uk3IuWxrqU5laflhcojN5wAyWoEOy6pjNF0s#!/news-
stream/post/65061/higher-rates-of-global-unemployment-coronavirus-puts-the-global-economy-on-hold

Early 2020 with the outbreak of COVID-19 pandemic, many companies are struggle to stay alive. Due to
the regulation that encourage people from staying at home, business is struggle. Many people can’t go
to work temporary thus can’t make money, this leads to less customer and result in many people even
lose their job because of business slow down. According to this table, unemployment rate in the world is

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at 187.7 million people, the estimated decline in working hours is at 6.7% and these number will
continue to rise if the pandemic continue to spread.

Current situation in Vietnam

Vietnam inflation rate 2020

Source: https://tradingeconomics.com/vietnam/inflation-cpi

In Vietnam, thanks to the right decision of the government, the pandemic only cause modest damage to
the country economic. Though because Vietnam is still a developing country, the inflation is quite high
compare to other developed nation.

This graph illustrates the inflation of Vietnam in 2020. On January due to Covid-19, many industries such
as logistic, hospitality, travel, airline, … suffered. Many companies had gone bankrupt, people lost their
job, product import and export are temporary limited to only the essential items such as medical
equipment, food, drink, … In this difficult time, the inflation rate increased significantly, reaching 6.43%
maximum.

After the situation is under control, the inflation rate is drop down tremendously with the minimum of
2.4% in May 2020. And currently is stabilizing at 2.47% in October 2020.

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 Vietnam GDP from 2010 to 2020 bar graph

Source: https://tradingeconomics.com/vietnam/gdp

This graph shows the GDP value of Vietnam in the period from 2010 to 2020.

As you can see the GDP is growing at a steady rate from 115.93 Billion USD in 2010 and top at 261.92
Billion USD in 2019.

In the early 2020, because of the outbreak of Covid-19, though thanks to the right decision of the
government, it caused minimal damage to the country, but it still affecting the GDP of 2020. It is believed
that it will drop down from 261.92 Billion USD in 2019 to around 260 Billion USD in 2020.

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 Vietnam GDP grow rate from 2018 to 2020 bar graph

Source: https://tradingeconomics.com/vietnam/gdp-growth-annual

This chart demonstrate the GDP grow rate in Vietnam from 2018 to 2020.

According to this graph, Vietnam GDP grow rate from January 2018 to July 2018 is dropping steadily from
7.65% to 6.73%. Though after this period, from July 2018 to January 2019, it increasing from 6.73% to
7.31%. After that, from January 2019 to January 2020 it fluctuates between 7.31% to 6.79% sometime it
fell down to the minimum of 6.73%.

Starting 2020, due to the damage of Covid-19 to the economic, the GDP grow rate is drop from 6.79% in
January 2020 to 3.68% and the lowest is at 0.39% in July 2020. Currently, it gone back up at 2.62%.

Combine all the figures provided above, I came to a conclusion. During this difficult time, Vietnam is one
of the countries that thrive above the pandemic. Even though there are some damages, the economic is
not suffer heavily. This leads to the potential market for many foreign companies to keep an eye on
especially Standard Chartered.

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 C. Social factor

Society culture helps shaped Standard Chartered organization culture and its environment. Shared belief
and attitudes of a population helps Standard Chartered understand its customer, delivering the correct
messages to the correct customer. In term of social factor, Standard Chartered pay close attention to

• Demographics and skill level of the population

• Class structure, hierarchy and power structure in the society.
• Education level as well as education standard in the Standard Chartered Plc ’s industry
• Culture (gender roles, social conventions etc.)
• Entrepreneurial spirit and broader nature of the society. Some societies encourage
entrepreneurship while some don’t.
• Attitudes (health, environmental consciousness, etc.)
• Leisure interests

Current situation in Vietnam

Population in Vietnam from 2018 to 2020

Source: https://www.worldometers.info/world-population/vietnam-population/

This table shows Vietnam population over a period of 2018 to 2020.

Currently, the population is around 97.338.579 people. An increase of 0.91% compare to last year. Urban
population take up 37,7% (36.727.248 people).

Vietnam rank 15 in term of the world population, this mean that Vietnam is among one of the most
populated country in the world.

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 Vietnam ethnic composition

Source: https://www.britannica.com/place/Vietnam/Ethnic-groups

Vietnam is a diverse culture country, the home of many tribes and clans. This pie chart shows the
number of ethnic groups currently living in Vietnam.

According to the chart, there are 9 main type of ethnic group. The largest ethnic group in Vietnam is
Vietnamese which take up 85,7%, next down the list is the combination of many small group into one,
this group take up 4,3% of the total population. The smallest group in Vietnam is the Hoa people with 1%
of the population. In between, there are the Tay people (1,9%), the Thai people (1.8%), the Muong
people (1.5%), the Khmer people (1.2%), and the Nung people (1.1%).

These people have different cultures, lifestyles and religious. This create a diversity in the industry, it’s a
challenge for Standard Chartered due to the diversity of target customers.

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 Religious in Vietnam

Source: https://www.britannica.com/place/Vietnam/Ethnic-groups

This pie chart illustrates the number of religious exist in Vietnam in 2009.

Overall, there are quite a diversity in term of religious in Vietnam. There are a total of 5 main religious
and there also people who don’t follow any saint at all.

The number of people who don’t worship god is taking the most of the population with the overall figure
of 81,8%. Next down the list is the Buddhist which take up 7,9% of population. This maybe because of
the Chinese influence in the feudal era. Next is the Catholic with 6,6%. The Hoa Hao, Cao Dai, and other
take up 1,7%, 0,9% and 1,1% respectively.

Overall, Vietnam has the most diverse religious in the world due to many influences in history. Which can

be a difficulty for Standard Chartered because of the diversity of customer behavior.

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 Age group in Vietnam 2014

Source: https://www.britannica.com/place/Vietnam/Ethnic-groups

The graph shows several groups of age in Vietnam in 2014.

At first glance, we can see that the age between 15-29 make up the most population in Vietnam with
27,3%. Following that is the age under 15 with 24,4% and 30-44 take up 23,3%. These 3 groups dominate
the overall population of Vietnam.

The remaining group include the 45-59 make up 16,4% and dropping from there with 60-74 group take
up 6,2% following by 75-84 group with 1,9% and 85 and over which only accounting for only 0,5%
respectively.

All in all, base on the information of the graph, the population in Vietnam is a young population which
mean there are opportunity for Standard Chartered to take advantage of.

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 Population density in Vietnam 2009

Source: https://www.britannica.com/place/Vietnam/Ethnic-groups

The given map indicates the population density in Vietnam 2009.

It can be seen that the 2 most populated place in Vietnam is Ha Noi and Ho Chi Minh City with more than
2000 persons per kilometer. The next crowded city includes Hai Phong city, Nam Dinh city, Can Tho city
with 890 person per kilometer respectively. Then there are Bien Hoa which is close to Ho Chi Minh city
and Da Nang with a population of 390 people per kilometer. Next, we have Hue, Qui Nhon, Nha Trang,
Rach Gia with 310 people per kilometer. The rest is a mix of 100-155 people per kilometer.

Overall, thanks to this map, Standard Chartered can focus on the most important market in Vietnam.

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 Vietnam social hierarchy structure

Source: https://interculturalmunicationvietnamchloe.weebly.com/similarities—differences.html

In numerous nations, social class is depended on money, power, authority, inheritance, and some of the
time ethnicity. In Vietnam, in any case, social classes were created on the basis of education and the
occupation one held. Social class in Vietnam is exceptionally much based upon age and status. Education
for Vietnamese individuals was a noteworthy strategy for upward versatility and was a committed way of
accomplishing tall social status.

Ruling class: divided into the Emperor and Royal family, they are the best of this social structure. Taking
after them were the social classes that were totally depend on instruction, information and calling.

Researcher Class: This specific class included researchers and researcher authorities. A part of
accentuation was made on instruction in Vietnam and hence got to be the premise of the Vietnam social
chain of command.

Working Class: The working class was the center class of the various leveled structure. The individuals
inside this lesson were included with manual work that was not considered tall status. This course was
advance isolated into two categories as farmers (the laborers included in cultivating work) and the
manual workers (these individuals worked for agriculturists and other tall social course individuals).
These defined into two more sub-categories: artisans and laborers.

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Business class / Merchants: This class was looked down upon by the Vietnamese individuals because it
was an undesirable lesson. This can be since the Vietnamese individuals considered trade exchanges as
unscrupulous exchanges.

Household income in Hanoi and Ho Chi Minh City 2009

Source: http://socialmediachannel.blogspot.com/2009/12/shifting-of-society-in-hanoi-capital.html

This illustration demonstrates the household income during the period from 2002 to 2009.

It is clear that the income from 4-7 million VND take up majority of the population with 85%. Next, we
have a tie between the group of 7-10 million VND and 2-4 million VND with each has 14% respectively.
Then we have the upper class with more than 10 million VND account for 12% of the population. And
finally, the remaining 2% is the lower class with less than 2 million VND.

Overall, this can give Standard Chartered narrow down the target customer, innovating new product
suitable for the Vietnamese market.

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 D. Technology factor

Technology is a disruptor across various industries. But a company shouldn’t only focus on the
technology analysis of an industry but the speed that technology disrupt the market. Slow speed will give
the company more time to cope with the current situation and increase in profitability. While on the
other hand fast speed disruptor will give the company little time to cope with the current market
situation.

The following impact is watch closely by Standard Chartered:

• Recent technological developments by Standard Chartered Plc competitors

• Technology's impact on product offering
• Impact on cost structure in Banks industry
• Impact on value chain structure in Financials sector
• Rate of technological diffusion

E. Environmental factor

Different market has different regulations and laws which the company must follow. This will affect the
profitability of an organization. Sometimes, even within a country, different state or city may have
different environmental laws. So before considering a new market, a company should evaluate carefully
the environmental standard of that country, which include

• Weather
• Climate change
• Laws regulating environment pollution
• Air and water pollution regulations in Banks industry
• Recycling
• Waste management in Financials sector
• Attitudes toward “green” or ecological products
• Endangered species
• Attitudes toward and support for renewable energy

F. Legal factor

Legal framework and institutions are considered to be one of the controversial things. In some country,
they don’t provide a system that robust enough to protect the intellectual property right of a company.

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The company should take into consideration before entering such market due to the potential of theft or
leak of organization secret sauce in addition to the damage may cause to the overall competitive edge.

Some of the things Standard Chartered need to consider when it comes to legal factors.

• Anti-trust law in Banks industry

• Discrimination law
• Copyright, patents / Intellectual property law
• Consumer protection and e-commerce
• Employment law
• Health and safety law
• Data Protection

Strengths and Weaknesses

Vision “Here for good. Driving commerce and prosperity through our unique
diversity”

Core value Everyday, we are inspired to achieve our five motivation:

• We are courage
• We are responsive
• We are international
• We are creative
• We are trustworthy

Mission Offer banking services that help people and companies prosper across Asia,
Africa, Europe, the Americas and the Middle East.

Company structure
In this report, I will not give detail about the mission of each division in Standard Chartered, if you want
to know about their role in the company, I already analyze in the previous company.

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 Standard Chartered organization chart

(Standard Chartered official website - https://www.standardchartered.co.kr/np/en/cms/cm/bi/EnOrganizationchart.jsp)

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After evaluation the given organization structure chart, Standard Chartered is using divisional structure
which to me is suitable for the growth of the company. Due to the fact, this structure is built upon the
different division base on many areas such as product, geographic location, and services. Each profit can
operate as its own separate profit center. This divisionalization is proved to have the capability to
overcome the problems that functional structure have in dealing with diversities.

Advantages Disadvantages
• Flexible • Duplication happens between central
• Performance driven and divisional functions
• High strategy ownership • Fragmentation
• High expertise • Non co-operate
• Strategic View Training • Potential danger of losing central control

Market resource

Region table

(Standard Chartered Annual Report 2019)

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Currently, Standard Chartered has operated all over the world, they are divided into 5 main region of
operation:

• Greater China and North Asia: this is by far the biggest market of Standard Chartered with an
income of $6,155 million (underlying basis) and 6,242 million dollar (Staturory basis)
• ASEAN and South Asia: the main markets of this region are Singapore and India, they generated
an income of $4,213 million (underlying basis) and 4,211 million dollar (Statutory basis)
• Africa and Middle East: eventhough Standard Chartered has operated in 25 markets, the biggest
income to them are the UAE, Nigeria, and Kenya with $2,562 million in underlying basis income
and $2,562 million in statutory basis income.
• Europe and America: located in London and New York, their income are both $1,725 million in
underlying basis and Statutory basis.
• Central and other items: although they have the smallest share, they have an operating income
of $616 million (underlying basis) and $677 million (Statutory Basis)

Physical asset and Brand equity

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 Consolidated balance sheet

(Standard Chartered Annual Report 2019)

According to the figures given by the sheet above, we can see their total assets in 2019 are $720,398
million, as compare to last year which is $688,762 million, this is an increase of 4.6%. Total liabilities in
2019 are $669,737 million, compare to 2018 figure of $638,410, this also an increase of 4.9%. Last but
not least is the total equity of 2019 is $50,661 million, compare to $50,362 million of 2018. This is a
minor increase of 0.61%.

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Strengths
Human resources

On July 23rd 2019, Standard Chartered has achieve the title of one of the best companies to work in Asia
nominated by HR Asia.
With a philosophy of providing unique working environment and company culture that emphasized
diversity and inclusion, Standard Chartered has out done themselves to earn this title.
At Standard Chartered, Staffs are given the freedom and accountability to make a real difference to the
work they do, challenge where things could be better and find new opportunities for innovation.
With that in mind, Standard Chartered always judging people by the work they are produced and not by
the number of hours on the desk, they offer flexible working hours thanks to advance technologies,
enable staff to work remotely, which is especially important in this COVID-19 situation.
Which is why I think Human Resource division and Technologies and innovations has been the most
precious part of the company.

Source: Standard Chartered official website - https://av.sc.com/vn/en/content/docs/vn-en-news-media-

vietnam-named-among-the-best-companies-to-work-for-in-asia.pdf

Weakness
Technology base or Research and Development

Currently, in Vietnam, there is a cap of 49% on foreign ownership at e-payment firms. The reason for the
cap is to foster domestic fintech enterprises.

The proposed regulation of the government would apply to companies providing non-cash payment
service such as payment intermediaries, e-money, and mobile money.

This aims to balance the ease of attracting foreign capital with ensuring an active role for domestic
enterprises in the fintech sector, prevent foreign investors from manipulating the industry, ensure the
safety, security, as well as Vietnam’s national sovereignty over its financial sector while also giving
domestic company an opportunity in the market.

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This is not abnormal in this industry, for example in Indonesia, their foreign ownership cap for e-payment
services is at 20%, and a 49% cap on cryptocurrency related firms.

Source: https://e.vnexpress.net/news/business/industries/vietnam-mulls-49-percent-cap-on-foreign-
ownership-at-e-payment-firms-4008432.html

Pestle implication analysis

Technology
Business decision scenario.
Technology progression to increase growth:

1. Partner with Ant financial

In 2018, Standard Chartered create a partnership with Alibaba payment’s arm Ant Financial to launch
blockchain-powered cross-border remittance service. In the past, Standard Chartered has increased in
active digital client retail bank from 40% in 2016 to 45% in 2017. The partnership enabled the company
to work more efficient, reduce operation cost, increase profit margin

Source: https://av.sc.com/hk/content/docs/hk-stanchart-appointed-ant-financial-for-new-blockchain-
remittance-services-eng-final.pdf

2. Open innovation lab called eXellerator

In 2016, Standard Chartered decided to open its first innovation lab in Singapore called eXellerator. With the
technology obtained from the Silicon Valley, the lab will work closely with business team to combine technology,
data science for sustainable business solution.

Source: https://www.sc.com/en/media/press-release/weve-opened-the-exellerator-the-banks-new-
innovation-lab/

Digital banking opportunities:

1. Launched a new virtual bank called Mox in Hong Kong

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In partnership with PCCW, HKT and Trip.com, Mox will provide a suite of retail banking services over
mobile application. Taking the lead in launching Asia all in one numberless card.

Source: https://www.sc.com/en/media/press-release/weve-officially-launched-a-new-virtual-bank-mox-
in-hong-kong/

Scenario analysis
Interest in digital bank by Age in 3 countries

Source: https://fintechnews.sg/35297/virtual-banking/banking-in-asia-is-ripe-for-disruption-now-more-than-ever/

The chart above illustrated the interest in digital bank by age in 3 countries Hong Kong, Singapore and
Malaysia. This mean that there is a big need for digital banking in the industry.

Global internet speed

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 Source: https://www.spglobal.com/ratings/en/research/articles/200603-tech-disruption-in-retail-banking-hong-kong-s-large-banks-are-
pioneering-the-city-s-fintech-development-11396251

The bar graph illustrates the global internet speed. In term of internet speed, Hong Kong rank 3rd in the world. This
is a good foundation for Standard Chartered to invest in internet deliver service such as internet banking.

Global 4G speed

Source: https://www.spglobal.com/ratings/en/research/articles/200603-tech-disruption-in-retail-banking-hong-kong-s-large-banks-are-
pioneering-the-city-s-fintech-development-11396251

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This chart describes the ranking of number of users using 4G in the world. As you can see, Hong Kong 4G
connectivity is top 4 among the most popular country has many people using 4g in the world rival with
South Korea, Japan and Norway. Hence, this emphasize that Hong Kong is the appropriate place to invest
in internet base fin-tech due to the behavior of always connecting to the internet.

Hong Kong mobile connection

Source: https://www.spglobal.com/ratings/en/research/articles/200603-tech-disruption-in-retail-banking-hong-kong-s-large-banks-are-
pioneering-the-city-s-fintech-development-11396251

This pie chart show that 4G is the most popular type of wireless connection in Hong Kong. This show that
people in Hong Kong is always online. Combine with 2 proof mentioned above, it is believed that Hong
Kong is one of the important nations to develop internet base fin-tech.

By Innovating in payment mechanisms, services and advancing in data management and analytics, this
will result in enhancing the customer user experience. Standard Chartered also introduce a single digital
gateway to connect and consolidate multiple payment channel in China and apply fin-tech such as block-
chain technology in order to streamline cross-border payments mentioned above. Standard Chartered
also apply modern technology such as blockchain, big data, mobile app and services, … to guarantee
greater transparency, better risk management, client services, and information management.

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The investment in digital bank in many countries such as Hong Kong will contribute to the elimination of
physical bank branches, deliver virtual banking experience for the customer, improve competitiveness
against rivalry.

Overall, if Standard Chartered new product keep pace with industry change, it will provide an
opportunity to expand the market, penetrate the global market and increase revenue.

Competition strategy:
HSBC focus on digital capacities instead of building virtual bank

Unlike Standard Chartered which focus on research and develop the best virtual bank deliver to the
customer. HSBC Instead, believes that by focus on investing US$2.2 billion in growth and technology
initiatives across the globe will help it deliver on customer’s expectations in Hong Kong and around the
world.

In the past, HSBC has successfully delivered “time and again with blockchain” project to the customer.
Other projects include apply the use of robotics and artificial intelligence (AI) in HSBC product.

Globally, HSBC has 1,600 robotic devices that processed 11.5 million transactions last year, a tenfold
increase from the 2017 figure reached by the company.

Source: https://techwireasia.com/2019/12/hsbc-invests-to-boost-digital-capabilities-instead-of-building-
a-virtual-bank/

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SWOT
Strength
Strong brand presence and global footprint

Strong brand presence, high quality service and good financial capability are the 3 aspect that made up a
reputation brand image of Standard Chartered

Some of its activity to create a strong brand presence included:

• Standard Chartered is the main sponsor of Liverpool

Source: https://www.sc.com/en/about/sponsorship-liverpool-football-club/

• Create a global program called GOAL in order to encouraged girl and woman through various
activities such as sport and life-skills training, hence nurturing sustainable growth and
development.

Source: https://av.sc.com/corp-en/content/docs/StandardChartered-Goal-Programme-Report-
compressed.pdf

• Standard Chartered is the international brand that present in all 10 ASEAN markets

Focus on emerging markets

Worked constantly in developing the African, Asian and Middle Eastern local markets

Offer innovative product and differentiated service offering

Understanding the demand of each market

Profit before taxation by regions 2019

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 (Standard Chartered Annual Report 2019)

As you can see, the figures from this table show the emerging market taken up nearly 80% of Standard
Chartered market share.

Focus on sustainability

By contributing to support the finances for energy needs, pay attention to the low-carbon economy, and
guarantee that infrastructure development doesn’t cause any harm to the environment, Standard
Chartered has balanced environment, social and economic needs of the giving country.

Action that prove Standard Chartered strategy:

• Support the UN Sustainable Development Goal

Source: https://www.sc.com/en/explore-our-world/sdgs-time-to-act-is-now/

Weaknesses
High dependence on South East Asian economies

Region table

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 (Standard Chartered Annual Report 2019)

According to the pie chart, most of Standard Chartered revenue and profit came from Asia. The
Southeast and South Asia alone has contributed to around 27% of the revenue but only 14% of profit
mostly because of high losses on bad loans.

Low productivity in developed market dragging down profit.

In the US, the weak growth of productivity is the main reason for keeping the rates of interest down
which lead to the Federal Reserve Board become cautious.

Things in the UK, Germany, and Spain are also not doing well because of low investment and general
growth slow down.

The reason why Standard Chartered is not performed well in these countries is because of:

• weak demands
• increased taxes
• lack of reforms
• oil price boom

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 • risks of overheating and inflation
• no new investments and growth opportunities

Opportunity
Technology create potential opportunity

Emerging economy technology intervention can help contribute to the economy growth by creating new
opportunities for Standard Chartered. Technologies such as AI, robotics, mobile, cloud IOT helps bring
the new wave of technology-driven productivity growth in many markets. Philippines and India have
benefitted tremendously from enhanced exports service thanks to the intervention of technology.

The implementation of technology in Standard Chartered product include:

• Big data analytics: helps to predict the success and failure rates of customers in terms of mutual
funds, loans, ... easier
• Online banking provides several banking services through mobile application or website

Potential of growth in emerging markets

High productive economies such as Vietnam, China, Taiwan, and India enjoy stronger credit, stock and
thing like property market also rising in real exchange rate. Standard Chartered is benefit the most from
the trade flows between Africa, Asia, and the Middle East.

In general, The Asian outlooks is stable despite the tensions between US-China is climbing high.

India have the most potential in term of supportive demographic and economic opportunity.

The demands of financial services from these emerging markets are promising.

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 Threat

The Changing macroeconomic conditions

Global Banking outlook 2018 - banking costs prediction for the next 3 years.

Source: https://eyfinancialservicesthoughtgallery.ie/wp-content/uploads/2018/05/ey-global-banking-
outlook-2018.pdf

According to the global banking outlook survey 2018, most bankers anticipated that the base costs of
banking services will increase from 0.1% to 2.9% over the next three years. The moderate savings are
reallocated to cybersecurity spending and growth initiatives.

The trade tensions and the USD strength are also contributed to the business sentiments in the emerging
markets, such as Japan and Europe

Q4 of 2018, it is estimated that more volatility will occur due to the development in global trade, growth,
and the differences in interest rates.

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The Gold prices continue to be under pressure because of the escalating trade war between China and
America.

Weaker Emerging Markets Forex lead to metal’s attractiveness decreasing.

Geopolitical event

The tension between the US and China trade war are climbing, The US imposed another round of tariff
worth $200 billion worth of Chinese export. And China has declined US’s offer to discuss trade offers, …

The oil prices are becoming more unpredictable as the demand for oil is rising.

The strength of Great Britain Pound has been driven by expectations that a “no-deal Brexit” will be
prevented by compromise on both sides.

In a situation like this, investment is not advised.

In this unstable political situation, there is no guarantee environment for the bank to carry out its
operations in these strategic markets.

Other rivalry on the market

New market entrant competitors are putting Standard Chartered under pressure. digital banks and other
institutions which offers high-tech and high-touch branch services. Hence such challenges have rapidly
climb because of the change in customer behaviors and expectations which lead to the thrive in invest in
customer technology to prevent customer leakages.

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Conclusion
We had discussed a lot about Standard Chartered. Let’s take a brief summary about their strategy.

Porter
Despite many challenges in the industry from rival, pressure from buyer and supplier, substitutes
product and potential threat from new entrant. Though if we tackle this all at the same time, it will be
difficult but not impossible. Standard Chartered can be flexible in the to stay competitive in the industry
and continue to grow.

Pestle

Economic of Vietnam: COVID-19 caused modest amount of damage to the world, number of
unemployment of the world is increasing by second but despite that, in Vietnam, thanks to the right act
of the government, the damage is keeping at the minimal. The inflation is keeping stable at 2,47%, the
GDP grow rate is drop compare to last year but it still a grow of 2.62%. This leads me to believe Vietnam
is one of the most stable market in the world. The potential to invest and grow in Vietnam is very big.

Social of Vietnam: Vietnam has the most diverse culture, ethnic group and religious. This create many
challenges and opportunities such as there are a variety of target customer and user behavior. Combine
with the age of Vietnam is relatively young. This create an exciting dynamic market. Furthermore, the
population is focusing the majority in big city such as Hanoi and Ho Chi Minh make it easier to focus on
the good market. In this market, the overall household income is pretty good, mostly are middle class
and above. Overall Vietnam is a potential dynamic market.

Strength and Weakness of Standard Chartered in Vietnam

Strength: The human resource of Standard Chartered has out done themselves, achieved the title of one
of the best companies to work in Asia. Their philosophy is to create unique working environment and
company culture that emphasized diversity and inclusion. According to Standard Chartered, employees

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are an essential asset of the company. Standard Chartered want to encourage them and give them the
flexible they need in order to perform effective the most.

Weakness: in Vietnam, there is a cap of 49% on foreign ownership at e-payment firms. Though I
understand the reason behind of the cap is to encourage domestic fintech enterprises, prevent foreign
investors from manipulating the industry but this is also limiting how Standard Chartered is operating in
Vietnam.

Pestle implication analysis

Standard Chartered commitment is to research and apply new technology into their product, distinct
themselves from their competitor, focus on building the best virtual bank experience for the customer
especially China and Hong Kong market due to their strong internet driven infrastructure. Though they
are not the only one that invest in technology, HSBC also invest in digital capacity to compete with
Standard Chartered. Overall, if Standard Chartered keep pace with industry change, the potential of
expanding market and reach out to global will take another step.

SWOT
Standard Chartered has strong global footprint, broad product and financial strength, focus on
sustainability, these are all their strength. But they rely on the Asian market too much especially China
that make them suffer from low productivity from developed nation’s industries and some regulation
drag their profitability down. But they have strong grow potential, expand opportunity. If they can face
the competition smartly, they will increase their profitability and expand their market.

Overall, with all the analysis, I think Standard Chartered has the potential to further develop in the
future. Despite many challenges in this dynamic market, their way of moving forward is bright and I
believe it will pay off in the future.

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