strategic management project iryna trygub amit shroff alex downs prasanna gopalan hanqian liu
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Strategic Management Project
Iryna Trygub
Amit Shroff
Alex Downs
Prasanna Gopalan
Hanqian Liu
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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
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Multidivisional Structure
Fidelity Brokerage Company
FidelityE Business
Fidelity Management& ResearchCompany
FidelityCapital
Companies
FidelityCorporateServices
Fidelity Corporate Systems &Processing
Fidelity Institutional
Service Company
Fidelity EmployeeServices
Company
CEO &
Board of Directors
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Characteristics of the Organizational Structure
• Complex structure
• vertical differentiation
• Relatively flat structure
• Wide span of control
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Characteristics of the Organizational Structure
• Decentralized approach High level of differentiation
• Highly complex forms of integration mechanism
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Fidelity Brokerage CompanyExecutive Manager
Fidelity PersonalInvestments
Institutional Brokerage Groups
National FinancialServices
Private
Wealth Management Group
Retirement Group
Customer Service
Fidelity CustomerMarket & Development
Capital Markets
Client Services
Sales and Relationship Mgmt
Market & Product Development
Mutual Funds
Margin Group
Brokerage Processing
Risk Management
Finance, Acting & Regulatory Control
Treasury & Tax Services
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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
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Corporate Culture
• Stimulates friendly communication
• Supports a flexible, high-performance working environment, in which creativity and innovation are rewarded
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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
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Rewards
• Individual reward
• Group reward
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Individual Rewards
• Bonuses
• Profit Sharing
• Promotions
• Educational Benefits
• Non-Monetary rewards
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Strategic Controls
• Financial Control
• Output Controls
• Behavioral Control
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Financial Control
• Stock price
• Return on Investment
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Output Controls
• Benchmarking
• Analysis of customer survey
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Behavioral Control
• Operating Budget
• Standardization
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Improvements
• Fidelity needs to look at how the changing market conditions
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Improvements
• Adjust Structure of Fidelity
• Globalization
• Deregulations • Changes in information
technologies
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Improvements
• Adjust Reward System of Fidelity
• Subjective standards
• Long term reward system
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Obstacles to Change
• Repositioning strategy
• Private ownership
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Repositioning Strategy “In personal Investments, we developed a
number a new brokerage services, and strengthened our commitment to the high net worth customer. This is essential at a time when 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
• .
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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
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Repositioning strategy
• Fidelity has not clearly defined their vision.
• Why Good Companies Go Bad • By Donald N. Sull
• Active inertia
– Need to act appropriately
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Private Ownership
• Expand globally
• Fidelity – 24 countries
• Merrill Lynch – 44 countries
• JP Morgan – 50 countries
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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.
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Conclusions
• Repositioning strategy
• Vision
• Write a mission statement
• Don’t try to be the best at every thing. Build on core competencies.
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Conclusions
• Private ownership
• Expand globally
• Borrow at AAA credit rating, or go public to raise capital
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