Overview

The objective of the assignment is to identify the dominant economic market structure of Hongkong and Shanhai Banking Corporation Sri Lanka referred to as HSBC herein.

The contents will highlight the key assumptions made on the market structures by the economists and channel it across the commercial banking industry via the key competing elements of HSBC.

1. Introduction

Having celebrated 115 Years of service with pride, HSBC which was formally known as Hongkongbank opened its doors in Sri Lanka during mid-1882. Having been with the nation during the tough and good times, HSBC boasts of stability with a strong capital structure and innovativeness by customizing its products and services to its customers.

2. Brief Introduction to Industry Market Structures

The form of market in which a firm operates, is referred to as the market structure. The identification of same is vital as the decision making atmosphere will depend on the type of structure the firm functions in.
However it is noted that a firm may not necessarily fall into a particular type of market, but may possess basic characteristics, which can be extracted to determine its market structure.

In this context we will be exploring the four main categories of market structures in the economy namely;

a) Monopoly b) Perfect Competition c) Oligopoly d) Monopolistic competition
a) Monopoly
In the event only one firm produces goods and services in a particular market, then it is said to have a monopoly in the market. Similarly if a company enjoys tremendous turnover compared to its smaller rivals, who have little or no influence on the dominating firm in reality would fall under the monopoly market structure.
Key assumptions are as follows: • Only a single or dominating producer • Virtually no close substitutes • Barriers to entry • Since it is