Capstone

Presentation
James Davalos
Nora Quintal
Tuyet Nguyen
Ryan Bilyeu
Aaron Sanchez
Daniel Lizon
Marcos Gonzales

Company Brief
Founded

1869
Worldwide offices
Investment Services Industry

External Analysis
The Investment Services Industry

Five Forces Analysis

Industry

Attractiveness

Rivalry

Favorable

1st

Threat of
Substitutes

Moderately
Favorable

2nd

Barriers to Entry Favorable

3rd

Suppliers

Favorable

4th

Buyer Power

Moderately
Unfavorable

5th

Overall

Attractive

Macro Environmental
Forces

Global

Social

Sustainable energy
Infrastructure
Emerging markets (BRIC)

Protect environment

Technological

Improved systems
Less specialized IT
Process time decreased.
Internet
Communication
Online trading

Macro Environmental
Forces

Governmental/Political

Securities Exchange Commission (SEC)

Ethical

Sarbanes-Oxley Act 2002 (SOX)

Financial Industry Regulatory Authority (FINRA)

Inadequately disclosed payments

Use of market timing
Abuse late trading
Untruthful reporting

Economic

Economys slowdown
Sub-prime crisis
Housing crisis

Competitors Analysis
Strategy/Position

Merrill Lynch

Morgan Stanley

Global Markets & Investment Banking

Global Wealth Management
Institutional Securities
Global Wealth Management Group
Asset Management

Goldman Sachs

Internal Analysis
Inside Wall Streets Black Box

Business
Definition/Mission
Definition

Global Investment banking, securities, and

investment management firm.

Mission

As far as our group could discern, Goldman does

not have a mission statement.

Firms
Management Style
Style

- Management by objective

Employees are given control over goal setting.

Management only intervenes when something is

not going right.

Organizational Structure
Flat

Minimum chain of command

Efficiency is key

Decentralized

Authority is delegated to divisions, functions and

employees at lower levels.

Organizational Controls
Output

Controls

Flat and decentralized = focus on divisional and individual

goals

Culture

Company values (fourteen principles)

Behavior

Controls

Incentives such as pay raises and bonuses

Organizational Values

Clients come first

Creativity and Imagination

Fiduciary responsibility

Ability to avoid pitfalls others could not because

employees are challenged to think out side of the box.

Integrity and Honesty

Trust is key in financial industry

Competitive Advantage
Quality

Focuses on having the greatest

product lines and managing affairs
in all aspects of business

Innovation

Leader in new products and

processes

Efficiency

Focuses on streamlining processes,

large investments in technology
innovations

Customer
Small number of clientele allows for
Responsiveness more focused customer service

Popular Ratios
3-year est.
Net Profit
growth(sales) Margin
Goldman
Sachs

Return on
Equity

43.2%

13.58%

18.75%

Merrill Lynch 34.9%

10.74%

14.62%

Morgan
Stanley

30.1%

10.32%

16.50%

Industry

20.7%

10.08%

15.32%

Critical Issues
Current events & concerns

S.W.O.T. Analysis
Strengths
High profitability and margins
Investment banking leader
High brand equity
Recruitment & retention of talent

Opportunities
Focus on investment banking in
the US & Southeast Asia
Private equity account generation

Weaknesses
Negative cash flow from operations
Interest income instability

Threats
Financial Market Volatility
Consolidations
Conflicts of interest

Critical Issues
Credit

Crunch Avoidance

FICC fueled capital

Went short
Small CDO holdings
Analysts now predicting
other firms write downs
Entrepreneurial culture

Critical Issues
Volatility

of Financial Markets

Drastic stock changes

Harmonizing

Client requirements
Profitable market returns

Balancing

Secrecy and Transparency

Black box
SEC reporting

Recommendations
Mission Statement & Recruiting

Mission Statement
Why

have a mission statement

What

are the benefits of the mission

statement

What

is the mission statement

Implementation of
Mission Statement
Use

the Mission Statement to explain the 14

Business Principles

Post

is on bottom of emails

Create

a beautiful 2 story water fountain with

the Mission Statement in gold around the
spout with Koi fish in the pond

Recruiting
Continue

Matrix

Make

to seek out desired individuals

Program

a greater presence on college

campuses

Recruiting
Implementation
Use

Be

the Matrix Program

Proactive on College Campuses

Talk to Student Orignizations

Delta Sigma Pi or Beta Alpha Psi etc

Career Services

Questions
Final thoughts?