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Strategic Management Project

Strategic Management Project

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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