Essay Preview: Morgan Stanley
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Morgan Stanley is one of the worlds largest investment banks and global financial services firms, which serves a diversified group of corporations, governments, financial institutions, and individuals. Morgan Stanleys world headquarters is in New York City with regional headquarters in London and Hong Kong. The company operates in three business segments: Institutional Securities, Global Wealth Management Group, and Asset Management. On February 5, 1997, the company merged with Dean Witter, but to foster brand recognition and marketing, the Dean Witter name was dropped in 2001.
In order to carry on and remain profitable in todays aggressive market, Investment Banks need to be able to respond and adjust to changes in the external environment and ideally be hands-on in impacting these forces. Current trends that are affecting the investment banking industry include globalization, increasing emphasis on higher education, demographic changes, erosion of the Glass-Steagall Act, heightened merger and acquisition activity, government movements towards privatization in developed and emerging markets, and rapid advancements in technology development.
Globalization has already had and will keep on having an impact on the investment banking industry. As the world becomes a “global village”, international markets become easily reached. This leads to vast opportunities in many different ways. Companies continue to expand abroad, investing more in physical assets like plants, property, and equipment. These companies need to raise increasing amounts of capital to grow their operations and offer more products and services in foreign markets. This need for additional financing increases the demand for debt and equity underwriting. It has also created opportunities for firms to offer new services such as helping corporations manage interest rate or currency risks.
External Factor Evaluation Matrix
Key External Factors
2. Growth of MN Clients
3. Increase in M&A Consulting
1. Declining Margins
Ratings: 1=poor; 4=superior
There are several strengths that allow Morgan Stanley to be a major player in the field of global investment banking. The first strength of the firm is its financial position and backing. The company is also the largest U.S. securities firm calculated by market capitalization. Another internal strength is the firms commitment to spend billions on technology. The firm also has a great ability to attract new customers. A significant portion of their revenues comes from first-time customers. The reputation of Morgan Stanley is also a key factor. Finally, Morgan Stanley has continued to make a commitment to finding and keeping the most talented employees.
Morgan Stanleys internal weaknesses, or opportunities, can be divided into three main areas: Internal Liquidity, Profitability, and Growth Analysis.
Internal Factor Evaluation Matrix
1. Financial Position
3. Commitment to technology
4. Ability to attract new customers
5. Human Capital
1. Internal Liquidity
3. Growth Analysis
Ratings: 1=Minor; 4=Major
The Threats-Opportunities-Weaknesses-Strengths (TOWS) Matrix:
This matrix helps to create four types of strategies: SO Strategies, WO Strategies, ST Strategies, and WT Strategies.
Commitment to Technology4.
Ability to attract new customers5.
Internal Liquidity 2.
Industry Consolidation 2.
Growth of MN Clients