Case Analysis
Content
TECHNOLOGICAL INSTITUTE OF THE PHILIPPINES
COLLEGE OF BUSINESS EDUCATION
BUSINESS POLICY AND STRATEGY (BUS 403)
CASE ANALYSIS:
E*TRADE FINANCIAL,
INC. – 2007
Lagran, Darwin C.
Tamang, Ron Oliver C.
Quinones, Carmela Dawn A.
Rambuyon, Christine Diane M.
Reyes, Gladys Anne B.
Oamil, Thea Kimberly A.
Arriola, Tricia Marie A.
BSA42KC2
EXECUTIVE SUMMARY:
The E*Trade Financial Incorporation is an organization that specializes on
financing specifically on trade equities, company portfolio and making different markets
proximate on their respective customers. Headquartered in New York City as service
entity, E*Trade has made subsidiaries around the globe such as Canada Hong Kong,
United Kingdom, France, Germany and Japan. It is on the sweat of Bill Porter that
makes the E*Trade successful and in demand on the market.
The E*Trade has projected itself to earn a modest income on the first five years
of the operation that will not just make the company profitable but making the
shareholders wealthy and customers reliant on our amenities on banking, investing and
trading, and lending.
As an online brokerage company, E*Trade commits itself in giving services to
customers on its high best and reaching the different people around the world. In
connection with that, E*Trade strategizes to maintain a competitive edge among others
by having affiliates in different countries who are ready to serve customers directly and
avidly.
BACKGROUND:
VISION:
To establish prominence when it comes to financial support and execution portal
for individuals, by diversifying and offering every service you need in your financial life,
with access to your accounts anytime, anywhere in the whole world.
MISSION:
E*TRADE is an online brokerage firm for everyone concerned with their financial
freedom, which allows trade equities, create a portfolio, get market information at any
time around the world. With our technology to set the standard to be innovative, service,
and control over the investors’ investment, this will help us grow as a company in
becoming a complete financial support business offering every service you need in your
financial life, while making our customers, stockholders and employees happy.
VALUES:
Customer First: At E*TRADE we consider what is best for the customer in all
decisions and actions; we anticipate and look for creative ways to deliver a best‐in‐class
experience, resulting in customers recommending us to others and prospects becoming
customers; we seek out – and listen to – customer and marketplace needs, and quickly
work to meet and exceed them; and we utilize every interaction to deepen our customer
relationships.
Respect: We treat everyone with respect; we value – and take pride in – the
significant contributions and ideas that come from the diversity of individuals regardless
of department, position or background; we are inclusive, open and honest in dealing
with others, building transparency and trust; and we are socially responsible and
contribute time and effort to improve the communities where we work & live.
Integrity: Our employees do the right thing and deliver on commitments; we take
action based on facts, data and our values; we operate within the letter and spirit of the
law; and we communicate honestly, with the courage to tell the truth and deliver difficult
or unpopular messages.
Teamwork: We work collaboratively, within and across departments to
accomplish shared goals, developing mutual respect, accountability and trust; we plan
inclusively and considers the impact of decisions on other parts of the organization; we
collaborate and leverage cross‐functional talent and the collective intelligence of the
entire organization to accomplish shared goals; and we week and provide feedback and
uses these lessons to improve self and others
Our Customer
E*Trade offers online brokerage that trades equities, keeps portfolio updated and
obtain market information, offer 15,000 ATM Machines. And it also give complete
financial support by offering every service a customer need. It provides services to ten
active countries such as; Germany, Australia, Canada, New Zealand, Denmark, Hong
Kong, Japan, Korea, Sweden, and United Kingdom.
Our Neighborhood
E*trade was named a leader in Corporate Social Responsibility according to
Brendan Hurley, a Chief Marketing Officer. E*TRADE valuated the impact based on
Goodwill's ability to fulfill that mission and deliver sustainable and measurable services
to the populations we serve. To support its mission investment, E*TRADE also asked its
employees to devote volunteer hours helping Goodwill students develop resumes, cover
letters and prepare for job interviews.
This hands-on style exhibits a willingness to contribute human capital along with its
financial capital. The combination of the two ensures that each of those investments is
properly managed and produces the desired results. Quite simply – a smart business
approach to corporate social responsibility (CSR).
With this multi-tiered CSR model, E*TRADE demonstrates that it is fully behind its
community and its employees who want to share in the social impact their company is
making.
E*TRADE's contribution of 100 volunteer man hours (to date in 2014) has already led to
the successful placement of 66 graduates from Goodwill’s Career Navigation and
Security & Protective Service training programs. At an average starting wage of
$14/hour, amortized over a 12 month period, E*TRADE’s investment of time and money
will result in a return of $1.9 million in earned wages by September of 2015. And that is
based solely on the number of graduates placed as of today, which is only going to
increase.
E*TRADE understands that people who are working are also establishing credit,
building capital and making financial investments. Therefore, E*TRADE believes
correctly that it is not only investing in a social cause. It’s also investing in its own future.
CSR is not just about writing a check. CSR is about rolling up your sleeves and making
a difference in business and your community. E*TRADE gets that.
Competitors
E*Trade competitors are Fidelity Investment, group of privately held companies
that is currently the largest broker in the industry, Charles Schwab, considered second
largest broker, TD Ameritrade (AMTD), they provide inline brokerage services, internetbased personal financial management service, touch-tone telephone and market data,
and research tools.
Organizational Chart
Mitchelle H. Caplan
Chief Executive Officer and
Director
Arlen W. Gelbard
R. Jarret Lillen
President E*Trade Financial
Chief Administrative Officer, E*Trade
Financial
President, Chief Operating Officer
Dennis Webb
Robert Simmons
President, E*Trade Capital Markets
Connie M. Dotson
Chief Communication Officer
Nicholas A. Utton
Chief Marketing Officer,
E*Trade Financial
Chief Financial Officer
Russel A. Elmer
General Counsel and
Corporate Secretary
I.
TIME CONTEXT
Second quarter of 2007.
II.
VIEWPOINT
Mr. Mitchell H. Caplan, he is the Chief Executive Officer and Director of
E*Trade Financial Inc.
III.
STATEMENT OF THE PROBLEM
Major Problem:
Maintaining continuous operations.
Minor Problem:
Vulnerability of the system.
IV.
STATEMENT OF THE OBJECTIVES
1. To commit helping the customers of all ages achieve their financial goals
by using state of the art technology.
1.1 Acquire advanced technology with updated software to give
customer quality service.
1.2 Warrant monthly maintenance of equipment and software.
2. To provide career opportunities for employees.
2.1 Provide trainings for employee development
2.2 Give a problem solving task to help them grow not just as
employee but also as individual.
3.
AREAS OF CONSIDERATION
A. SWOT ANALYSIS
B. SWOT MATRIX
C. PORTER’S FIVE FORCES ANALYSIS
1. Rivalry among other competitors – High
Rivalry among competitive firms is high because clients prefer to go to
firms that are well known and have established their name. These firms who are
engage to this kind of business are being spread to different countries that make
them attract more clients. Online brokerage firms are competing to be the best
provider of electronic trading services and the convenience that they give to their
clients. Competitive advantage can be attained by having a stable and strong
security system, and maintenance of service quality.
2. Potential entry of new competitors – Low
The threat of new entries into the industry is low because it is hard to
compete to the firms that have a strong foundation and credibility in the client’s
mind. Although, there are only few firms that render this kind of service, its
competitors have already proven their quality service and handle millions of
accounts that affect the preference of the future clients.
3. Potential development of substitute products – Low
The substitute service for online brokerage firm is low for the reason that
this service is rare that it’s hard to find an alternative that can provide you more
convenience that enables you to access and monitor your personal accounts.
4. Bargaining power of suppliers – Low
The bargaining power of suppliers is low because there are numbers of
suppliers available that are competing among themselves which makes it easier
for a firm to switch to a new contract to a more preferable provider.
5. Bargaining power of consumers – Moderate
The bargaining power of consumers is moderate for the reason that the
clients or the consumers can choose which firms charge a relatively low price for
their service or they can pick an expensive one because for them it is a trusted
company.
D. STEEPLE FRAMEWORK
STEEPLE is an abbreviation that comprises of Social,
Technological, Economic, Environmental, Political, Legal and Ethical
aspects. These factors play an important role in the market analysis and
affects the organization significantly if not taken properly.
Social
Technologi
cal
Ethical
Economi
c
Legal
Politic
al
Environment
al
Figure 1.1 STEEPLE Framework
SOCIAL
Population Growth- This aspect determines the number of consumer that
might be engage in E*Trade. Growing of population is inevitable, thus, upon
an increase on this factor may increase consumer.
Consumer’s Necessity- Nowadays, transactions happens in snap of a finger
through technology. E*Trade is one of the firm that made exchange of stock
through brokers easier. Likewise, E*Trade’s financial services and banking
are timely because the necessities of consumers today are demanding and
time centered. It is important to satisfy this factor exceptionally because it will
result to customer loyalty or dissatisfaction.
TECHNOLOGICAL
Easy Form of Communication- Apparently, E*Trade is engaged in the use
of technology. Through the use of it, they can easily identify and communicate
with their consumer and have transactions with them. Establishing a good
communication fallouts good relationship with consumer and understanding
between two parties and loyalty takes place.
Online Availability and Services- Through online services, fast transaction
happens and it reduces labor cost. Moreover, queries and feedbacks of
customers are easily acknowledge and assess.
ECONOMIC
Competitors- Competition is always present on market. This factor always
become a basis on how E*Trade will serve consumers and surpass the
services that other competitor company has.
Economic Variation and Trends- Ideally, having a good curve in an
economy gives company a smooth sailing operation and various opportunities
arises like high employment, customer’s good purchasing power, meeting
sales ration and other economic elements that will serve as revenue
generating factor.
ENVIRONMENTAL
Environment Sensitive- Consumers often take into consideration the
company’s dealing with environment. Usually, consumer dig companies to
have sustainable solutions on organization’s problem and deal with it in a
resource-saving way as possible.
POLITICAL
Government policy – government in different countries create different rules,
regulations and framework, thus operating in different countries can force
business to change their operations.
Tax Rulings- Tax, being the most powerful inherent power of a state, has
negative implication on business revenue recognition. Corporate tax is charge
against companies and it infers a direct relationship in a sense that if income
increases, tax also increases.
Labor Law and Unions- It is extremely important to observe the labor code
and how do business operates with their employees. Human Resource is the
most important part of every businesses and their voice must be properly
address by their employers.
LEGAL
Consumer’s Right- The consumer provide laws and regulations that governs
consumer’s right. This is because there are some abusive businesses that
take some consumers under them. Accordingly, the seller must be held liable
on whatever defects or failure that their product or service might incur.
ETHICAL
Company’s Image- Maintaining a good company image is a great factor in
order to make customers stay and induce customers to have engagement
with them. Reputation makes an abstract implication on customers that make
them reliant on company’s services. In order to do so, company must be
diligent and professional in rendering services to its clients.
Ethical Standards - E*trade is an Equal Opportunity Employee who
encourages diversity in the workplace. All employees will receive
consideration for employment without regard to the race, color, national origin,
religion, sex, age, disability, citizenship, marital status, sexual orientation,
gender identity, military or protected veteran status, or any other
characteristics protected by applicable law.
E. COMPETITIVE PROFILE MATRIX
The Competitive Profile Matrix (CPM) is a tool that compares the
firm and its competitors and reveals their relative strengths and weakness.
The matrix compares them using industry’s critical success factors. The
analysis also reveals which areas should the company focus and improve
and which areas to protect.
The CPM analysis reveals that the Charles Schwab is the strongest
player in the industry with the highest score of 3.95 and relative strengths
in advertising, user friendly website, revenue growth, financial condition,
customer loyalty and service quality. On the other hand, Ameritrade excels
in financial condition and price competitiveness. This analysis shows that
the E*trade Financial Inc. should enhance its advertising, user friendly
website, revenue growth, and financial condition. And improve its
weaknesses in terms of customer loyalty and price competitiveness to
become more competitive and successful in the future.
COLLEGE OF BUSINESS EDUCATION
BUSINESS POLICY AND STRATEGY (BUS 403)
CASE ANALYSIS:
E*TRADE FINANCIAL,
INC. – 2007
Lagran, Darwin C.
Tamang, Ron Oliver C.
Quinones, Carmela Dawn A.
Rambuyon, Christine Diane M.
Reyes, Gladys Anne B.
Oamil, Thea Kimberly A.
Arriola, Tricia Marie A.
BSA42KC2
EXECUTIVE SUMMARY:
The E*Trade Financial Incorporation is an organization that specializes on
financing specifically on trade equities, company portfolio and making different markets
proximate on their respective customers. Headquartered in New York City as service
entity, E*Trade has made subsidiaries around the globe such as Canada Hong Kong,
United Kingdom, France, Germany and Japan. It is on the sweat of Bill Porter that
makes the E*Trade successful and in demand on the market.
The E*Trade has projected itself to earn a modest income on the first five years
of the operation that will not just make the company profitable but making the
shareholders wealthy and customers reliant on our amenities on banking, investing and
trading, and lending.
As an online brokerage company, E*Trade commits itself in giving services to
customers on its high best and reaching the different people around the world. In
connection with that, E*Trade strategizes to maintain a competitive edge among others
by having affiliates in different countries who are ready to serve customers directly and
avidly.
BACKGROUND:
VISION:
To establish prominence when it comes to financial support and execution portal
for individuals, by diversifying and offering every service you need in your financial life,
with access to your accounts anytime, anywhere in the whole world.
MISSION:
E*TRADE is an online brokerage firm for everyone concerned with their financial
freedom, which allows trade equities, create a portfolio, get market information at any
time around the world. With our technology to set the standard to be innovative, service,
and control over the investors’ investment, this will help us grow as a company in
becoming a complete financial support business offering every service you need in your
financial life, while making our customers, stockholders and employees happy.
VALUES:
Customer First: At E*TRADE we consider what is best for the customer in all
decisions and actions; we anticipate and look for creative ways to deliver a best‐in‐class
experience, resulting in customers recommending us to others and prospects becoming
customers; we seek out – and listen to – customer and marketplace needs, and quickly
work to meet and exceed them; and we utilize every interaction to deepen our customer
relationships.
Respect: We treat everyone with respect; we value – and take pride in – the
significant contributions and ideas that come from the diversity of individuals regardless
of department, position or background; we are inclusive, open and honest in dealing
with others, building transparency and trust; and we are socially responsible and
contribute time and effort to improve the communities where we work & live.
Integrity: Our employees do the right thing and deliver on commitments; we take
action based on facts, data and our values; we operate within the letter and spirit of the
law; and we communicate honestly, with the courage to tell the truth and deliver difficult
or unpopular messages.
Teamwork: We work collaboratively, within and across departments to
accomplish shared goals, developing mutual respect, accountability and trust; we plan
inclusively and considers the impact of decisions on other parts of the organization; we
collaborate and leverage cross‐functional talent and the collective intelligence of the
entire organization to accomplish shared goals; and we week and provide feedback and
uses these lessons to improve self and others
Our Customer
E*Trade offers online brokerage that trades equities, keeps portfolio updated and
obtain market information, offer 15,000 ATM Machines. And it also give complete
financial support by offering every service a customer need. It provides services to ten
active countries such as; Germany, Australia, Canada, New Zealand, Denmark, Hong
Kong, Japan, Korea, Sweden, and United Kingdom.
Our Neighborhood
E*trade was named a leader in Corporate Social Responsibility according to
Brendan Hurley, a Chief Marketing Officer. E*TRADE valuated the impact based on
Goodwill's ability to fulfill that mission and deliver sustainable and measurable services
to the populations we serve. To support its mission investment, E*TRADE also asked its
employees to devote volunteer hours helping Goodwill students develop resumes, cover
letters and prepare for job interviews.
This hands-on style exhibits a willingness to contribute human capital along with its
financial capital. The combination of the two ensures that each of those investments is
properly managed and produces the desired results. Quite simply – a smart business
approach to corporate social responsibility (CSR).
With this multi-tiered CSR model, E*TRADE demonstrates that it is fully behind its
community and its employees who want to share in the social impact their company is
making.
E*TRADE's contribution of 100 volunteer man hours (to date in 2014) has already led to
the successful placement of 66 graduates from Goodwill’s Career Navigation and
Security & Protective Service training programs. At an average starting wage of
$14/hour, amortized over a 12 month period, E*TRADE’s investment of time and money
will result in a return of $1.9 million in earned wages by September of 2015. And that is
based solely on the number of graduates placed as of today, which is only going to
increase.
E*TRADE understands that people who are working are also establishing credit,
building capital and making financial investments. Therefore, E*TRADE believes
correctly that it is not only investing in a social cause. It’s also investing in its own future.
CSR is not just about writing a check. CSR is about rolling up your sleeves and making
a difference in business and your community. E*TRADE gets that.
Competitors
E*Trade competitors are Fidelity Investment, group of privately held companies
that is currently the largest broker in the industry, Charles Schwab, considered second
largest broker, TD Ameritrade (AMTD), they provide inline brokerage services, internetbased personal financial management service, touch-tone telephone and market data,
and research tools.
Organizational Chart
Mitchelle H. Caplan
Chief Executive Officer and
Director
Arlen W. Gelbard
R. Jarret Lillen
President E*Trade Financial
Chief Administrative Officer, E*Trade
Financial
President, Chief Operating Officer
Dennis Webb
Robert Simmons
President, E*Trade Capital Markets
Connie M. Dotson
Chief Communication Officer
Nicholas A. Utton
Chief Marketing Officer,
E*Trade Financial
Chief Financial Officer
Russel A. Elmer
General Counsel and
Corporate Secretary
I.
TIME CONTEXT
Second quarter of 2007.
II.
VIEWPOINT
Mr. Mitchell H. Caplan, he is the Chief Executive Officer and Director of
E*Trade Financial Inc.
III.
STATEMENT OF THE PROBLEM
Major Problem:
Maintaining continuous operations.
Minor Problem:
Vulnerability of the system.
IV.
STATEMENT OF THE OBJECTIVES
1. To commit helping the customers of all ages achieve their financial goals
by using state of the art technology.
1.1 Acquire advanced technology with updated software to give
customer quality service.
1.2 Warrant monthly maintenance of equipment and software.
2. To provide career opportunities for employees.
2.1 Provide trainings for employee development
2.2 Give a problem solving task to help them grow not just as
employee but also as individual.
3.
AREAS OF CONSIDERATION
A. SWOT ANALYSIS
B. SWOT MATRIX
C. PORTER’S FIVE FORCES ANALYSIS
1. Rivalry among other competitors – High
Rivalry among competitive firms is high because clients prefer to go to
firms that are well known and have established their name. These firms who are
engage to this kind of business are being spread to different countries that make
them attract more clients. Online brokerage firms are competing to be the best
provider of electronic trading services and the convenience that they give to their
clients. Competitive advantage can be attained by having a stable and strong
security system, and maintenance of service quality.
2. Potential entry of new competitors – Low
The threat of new entries into the industry is low because it is hard to
compete to the firms that have a strong foundation and credibility in the client’s
mind. Although, there are only few firms that render this kind of service, its
competitors have already proven their quality service and handle millions of
accounts that affect the preference of the future clients.
3. Potential development of substitute products – Low
The substitute service for online brokerage firm is low for the reason that
this service is rare that it’s hard to find an alternative that can provide you more
convenience that enables you to access and monitor your personal accounts.
4. Bargaining power of suppliers – Low
The bargaining power of suppliers is low because there are numbers of
suppliers available that are competing among themselves which makes it easier
for a firm to switch to a new contract to a more preferable provider.
5. Bargaining power of consumers – Moderate
The bargaining power of consumers is moderate for the reason that the
clients or the consumers can choose which firms charge a relatively low price for
their service or they can pick an expensive one because for them it is a trusted
company.
D. STEEPLE FRAMEWORK
STEEPLE is an abbreviation that comprises of Social,
Technological, Economic, Environmental, Political, Legal and Ethical
aspects. These factors play an important role in the market analysis and
affects the organization significantly if not taken properly.
Social
Technologi
cal
Ethical
Economi
c
Legal
Politic
al
Environment
al
Figure 1.1 STEEPLE Framework
SOCIAL
Population Growth- This aspect determines the number of consumer that
might be engage in E*Trade. Growing of population is inevitable, thus, upon
an increase on this factor may increase consumer.
Consumer’s Necessity- Nowadays, transactions happens in snap of a finger
through technology. E*Trade is one of the firm that made exchange of stock
through brokers easier. Likewise, E*Trade’s financial services and banking
are timely because the necessities of consumers today are demanding and
time centered. It is important to satisfy this factor exceptionally because it will
result to customer loyalty or dissatisfaction.
TECHNOLOGICAL
Easy Form of Communication- Apparently, E*Trade is engaged in the use
of technology. Through the use of it, they can easily identify and communicate
with their consumer and have transactions with them. Establishing a good
communication fallouts good relationship with consumer and understanding
between two parties and loyalty takes place.
Online Availability and Services- Through online services, fast transaction
happens and it reduces labor cost. Moreover, queries and feedbacks of
customers are easily acknowledge and assess.
ECONOMIC
Competitors- Competition is always present on market. This factor always
become a basis on how E*Trade will serve consumers and surpass the
services that other competitor company has.
Economic Variation and Trends- Ideally, having a good curve in an
economy gives company a smooth sailing operation and various opportunities
arises like high employment, customer’s good purchasing power, meeting
sales ration and other economic elements that will serve as revenue
generating factor.
ENVIRONMENTAL
Environment Sensitive- Consumers often take into consideration the
company’s dealing with environment. Usually, consumer dig companies to
have sustainable solutions on organization’s problem and deal with it in a
resource-saving way as possible.
POLITICAL
Government policy – government in different countries create different rules,
regulations and framework, thus operating in different countries can force
business to change their operations.
Tax Rulings- Tax, being the most powerful inherent power of a state, has
negative implication on business revenue recognition. Corporate tax is charge
against companies and it infers a direct relationship in a sense that if income
increases, tax also increases.
Labor Law and Unions- It is extremely important to observe the labor code
and how do business operates with their employees. Human Resource is the
most important part of every businesses and their voice must be properly
address by their employers.
LEGAL
Consumer’s Right- The consumer provide laws and regulations that governs
consumer’s right. This is because there are some abusive businesses that
take some consumers under them. Accordingly, the seller must be held liable
on whatever defects or failure that their product or service might incur.
ETHICAL
Company’s Image- Maintaining a good company image is a great factor in
order to make customers stay and induce customers to have engagement
with them. Reputation makes an abstract implication on customers that make
them reliant on company’s services. In order to do so, company must be
diligent and professional in rendering services to its clients.
Ethical Standards - E*trade is an Equal Opportunity Employee who
encourages diversity in the workplace. All employees will receive
consideration for employment without regard to the race, color, national origin,
religion, sex, age, disability, citizenship, marital status, sexual orientation,
gender identity, military or protected veteran status, or any other
characteristics protected by applicable law.
E. COMPETITIVE PROFILE MATRIX
The Competitive Profile Matrix (CPM) is a tool that compares the
firm and its competitors and reveals their relative strengths and weakness.
The matrix compares them using industry’s critical success factors. The
analysis also reveals which areas should the company focus and improve
and which areas to protect.
The CPM analysis reveals that the Charles Schwab is the strongest
player in the industry with the highest score of 3.95 and relative strengths
in advertising, user friendly website, revenue growth, financial condition,
customer loyalty and service quality. On the other hand, Ameritrade excels
in financial condition and price competitiveness. This analysis shows that
the E*trade Financial Inc. should enhance its advertising, user friendly
website, revenue growth, and financial condition. And improve its
weaknesses in terms of customer loyalty and price competitiveness to
become more competitive and successful in the future.
