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 • Worldwide number of employees was 35.2 thousands
Characteristics of the Organizational Structure • Complex structure • vertical differentiation • Relatively flat structure • Wide span of control
Characteristics of the Organizational Structure • Decentralized approach High level of differentiation • Highly complex forms of integration mechanism
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
Corporate Culture • Stimulates friendly communication • Supports a flexible, high-performance working environment, in which creativity and innovation are rewarded
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
Rewards • Individual reward • Group reward
Individual Rewards • Bonuses • Profit Sharing • Promotions • Educational Benefits • Non-Monetary rewards
Strategic Controls • Financial Control • Output Controls • Behavioral Control
Financial Control • Stock price • Return on Investment
Output Controls • Benchmarking • Analysis of customer survey
Behavioral Control • Operating Budget • Standardization
Improvements • Fidelity needs to look at how the changing market conditions
Improvements • Adjust Structure of Fidelity • Globalization • Deregulations • Changes in information technologies
Improvements • Adjust Reward System of Fidelity • Subjective standards • Long term reward system
Obstacles to Change • Repositioning strategy • Private ownership
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 • .
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
Repositioning strategy • Fidelity has not clearly defined their vision. • Why Good Companies Go Bad • By Donald N. Sull • Active inertia • Need to act appropriately
Private Ownership • Expand globally • Fidelity – 24 countries • Merrill Lynch – 44 countries • JP Morgan – 50 countries
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.
Conclusions • Repositioning strategy • Vision • Write a mission statement • Don’t try to be the best at every thing. Build on core competencies.
Conclusions • Private ownership • Expand globally • Borrow at AAA credit rating, or go public to raise capital