Strategic Management Analysis – Hong Leong Banking Group
Introduction
Overview
Globalization and rapid development in information and communication technology has resulted in continuous changes to the business and commercial world. Organizations have to create strategic moves in order to adapt and take advantages from change. According to Lamb (1984),
“Strategic management is an ongoing process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly [i.e. regularly] to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment.”
Organizations in the financial sector are also not spared from responding to the changing environment. Merger and acquisition practices in the financial sector have become more common in the recent decades. In fact, Hong Leong Banking Group acquired a 20% equity interest in Bank of Chengdu Co., Ltd. (formerly known as Chengdu City Commercial Bank Co. Ltd.) which was the first strategic investment by any Malaysian bank into the Chinese banking sector.
Referred Company
This assignment focuses on the strategic moves by Hong Leong Bank Berhad, which is a public listed company on the Malaysian Stock Exchange, and a member of the Hong Leong Group Malaysia (www.hlb.com.my).
Scope and Objectives of Assignment
The scope of this paper is to discuss the strategic moves employed by Hong Leong Bank Berhad in strengthening her competitive edges. The objectives of this paper are:
To identify the strategies employed by Hong Leong Bank Berhad;
To explain the reasons of implementing the strategic moves; and
To highlight the outcome of the strategies taken.
Strategic Management in Hong Leong Bank
Identification of the Strategy
Hong Leong embarked on a Business Transformation Programme in 2004, which focused on sustainable profitable growth. Yvonne Chia, the Group Managing Director of Hong Leong Bank Bhd initiated this strategic move, which include programs to beef up the banks infrastructure and foundation to scale up and develop new capabilities. She also brought in new skill sets alongside with investments in new capabilities and products and services (The Star Online, 2007).
The main