E-Trade Case Study

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CASE STUDY

STRATEGIC MANAGEMENT

AUTHORS:

Olga Jegorova

Viktors Jekimeckis

Uļjana Tjurina

Viktors Urvačovs

Pāvels Popovs

Anna Alenoviča

Kristaps Rūķis

Stanislavs Zavadskis

TUTOR: Andrejs Čirijevkis

Rīga, 2007

TABLE OF CONTENTS

Mission Statement

SWOT

Improvements in Organisational Structure

Acquisition Candidates

Expansion to New Countries

BCG and McKinsey Matrices

Cash Value of E-Trade

Marketing Strategy



1. MISSION STATEMENT

Using technology to set the standard for innovation, service, and value for investors seeking more control over their investments. E-Trade's rich suit of products and services can be customized to reflect a customer's unique needs and interests, including portfolio tracking, free real-time quotes, market news, and research available 24 hours a day, seven days a week. Customers can access their E-Trade accounts virtually any time anywhere around the world.

E-Trade Mission Statement Evaluation Matrix

Customers

Product Services

Markets

Concerns for Survival, Growths, Profitability

Concerns for public image

Concerns for employees

Self Concept

Technology

Philosophy

Yes

Yes

Yes

No

No

No

No

Yes

No

E-Trade Mission Statement (improved)

E-Trade is one of global leaders in online financial and investment services. We are committed to growing competition and are aiming at achieving the best results and becoming a leader in our market. Our main philosophy is to help our clients achieve their unique needs and interests. E-Trade's wide range of products and services includes portfolio tracking, free real-time quotes, market news, and research available 24 hours a day, seven days a week. Our performance is exceptionally ethical. Moreover, we make efforts to improve the quality of life for the inhabitants of countries we operate in. Customers have a unique possibility to access their E-Trade accounts virtually any time anywhere around the world.



2. SWOT

STRENGTHS - S

Over 3.5 million clients

Strong positions in the market

High brand recognition

Continuous innovations

Wide range of services

Strong operating record

Improved management of costs

Expansion into new businesses

3300 employees

WEAKNESSES - W

Loss of some foreign markets

Decline in operating income in core activities

Weak net revenue growth

Decrease of interest income

OPPORTUNITIES - O

Possible acquisition of an online brokerage company

Possibility to open new overseas brick and mortar banks or brokerage offices

Increase the number of ATMs throughout the world

Outsourcing of technology development

Market expansion options

SO STRATEGIES

Buy Ameritrade (S2, O1)

Outsource IT specialists in India or Estonia (S4, S7, O4)

WO STRATEGIES

To set up new brokerage offices in UK, Germany, Denmark, New Zealand, Sweden (W1, O2)

THREATS - T

Recession in US economy

Tough competition

Threat of global economic slowdown

Geopolitical fears

Losing of investors confidence

ST STRATEGIES

Attract more clients by innovative and up-to-date services (S5, S4, T2)

WT STRATEGIES

To streamline the processes in order to minimise costs (W2, W4, T1, T3, T4)

To enter new markets (W1, T1)

3. IMPROVEMENTS IN ORGANISATIONAL STRUCTURE

The organizational structure of E-Trade is quite effective and efficient, first of all it follows the rule of flat organizational structure, secondly almost all chief executives are equal and thus report to one person only.

However the structure could be improved by taking the two 3rd line managers out and "promoting" them to second line management, that way the structure will be flat to its fullest meaning.

This means that the "Chain of Command" from top to bottom is short and the "span of control is wide".

The structure will look as follows:

There...
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