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Strategic Management Project

Strategic Management Project. Iryna Trygub Amit Shroff Alex Downs Prasanna Gopalan Hanqian Liu. Background. Global leader and international provider of financial services and investment resources Worldwide assets under management was $999.8 billion Customer accounts was 67.6 million

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Strategic Management Project

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  1. Strategic Management Project Iryna Trygub Amit Shroff Alex Downs Prasanna Gopalan Hanqian Liu

  2. Background • Global leader and international provider of financial services and investment resources • Worldwide assets under management was $999.8 billion • Customer accounts was 67.6 million • Worldwide number of employees was 35.2 thousands

  3. Multidivisional Structure

  4. Characteristics of the Organizational Structure • Complex structure • vertical differentiation • Relatively flat structure • Wide span of control

  5. Characteristics of the Organizational Structure • Decentralized approach High level of differentiation • Highly complex forms of integration mechanism

  6. Fidelity Brokerage Company

  7. Geographic Structure • 8 regional centers in 7 states: Smithfield, RI; Boston, MA; Western Region; New York city; Southwest Region; Marlborough, MA; Merrimack, NH; Midwest Region. • International affiliates in 24 countries on 5 continents

  8. Corporate Culture • Stimulates friendly communication • Supports a flexible, high-performance working environment, in which creativity and innovation are rewarded

  9. Norms and Values • Building partnerships among internal customers and employees to provide effective services and solutions • Re-engineering business and technology processes to improve customer responsiveness and profitability of the company • Selecting and developing employees who are committed to excellence • Providing an environment where excellence is fostered, recognized and rewarded

  10. Rewards • Individual reward • Group reward

  11. Individual Rewards • Bonuses • Profit Sharing • Promotions • Educational Benefits • Non-Monetary rewards

  12. Strategic Controls • Financial Control • Output Controls • Behavioral Control

  13. Financial Control • Stock price • Return on Investment

  14. Output Controls • Benchmarking • Analysis of customer survey

  15. Behavioral Control • Operating Budget • Standardization

  16. Improvements • Fidelity needs to look at how the changing market conditions

  17. Improvements • Adjust Structure of Fidelity • Globalization • Deregulations • Changes in information technologies

  18. Improvements • Adjust Reward System of Fidelity • Subjective standards • Long term reward system

  19. Obstacles to Change • Repositioning strategy • Private ownership

  20. Repositioning Strategy “In personal Investments, we developed a number a new brokerage services, and strengthened our commitment tothehigh net worth customer. This is essential at a timewhen our competitors are providing more and more specialized services to reinforce their ties with this important group of investors. At the same time, we must reaffirm our long-term commitment to all categories of investors,no matter what their net worth.” Chairman's letter 2000 annual report • .

  21. Repositioning Strategy “I want us to be seen as what we are becoming – a firm that can provide solutions for customers across their whole range of financial needs.” • Chief Operating Officer Robert L. Reynolds

  22. Repositioning strategy • Fidelity has not clearly defined their vision. • Why Good Companies Go Bad • By Donald N. Sull • Active inertia • Need to act appropriately

  23. Private Ownership • Expand globally • Fidelity – 24 countries • Merrill Lynch – 44 countries • JP Morgan – 50 countries

  24. Example • Fidelity developed the “Private Wealth Management group” in March of 2000. • Merrill Lynch “Private Client Group” 20,200 Financial Consultants in nearly 1000 private client offices in 34 Countries. • This Merrill Lynch group has grown at a compounded annual growth rate of 15% over the last 5 years and has over $1.5 trillion dollars under management.

  25. Conclusions • Repositioning strategy • Vision • Write a mission statement • Don’t try to be the best at every thing. Build on core competencies.

  26. Conclusions • Private ownership • Expand globally • Borrow at AAA credit rating, or go public to raise capital

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