Merryll Lynch Group Case Final

Merrill Lynch:

Strategic Management

Team Case

Victoria AleksinaMark DeYoungRuth HallKristin Palmer

Agenda

Intro / Industry info Critical Factors Competitive Analysis Goals and Objectives Key Strategies Strategy Implementation and Control Questions

Intro to the company

• Basic Background on Merrill Lynch

• Strategic Positioning

Critical factors

Threats•Retirement of the baby boomers•Recession•Regulations

Opportunities•Ethics•Globalization•Diversification

Weaknesses•Mortgage turmoil•Decreasing revenues •Rigid corporate structure

Strengths•Financial assets•Global presence•Employee expertise

Competitive Analysis

Porter’s Competitive Strategies

Cost Leadership

DifferentiationFocusStuck in the middle

Competitive Analysis

• Key dimensions– Annual revenues– Global revenues

• Key competitors– Goldman Sachs– Lehman Brothers– Bear Stearns

1 2 31

2

3

Merrill Lynch Lehman Bros.Goldman Sachs Bear Stearns

Global Revenues

An

nu

al R

even

ues

Strategy Formulation

Goal 1

Grow internationally

Objectives

Brazil

Russia

Eastern Europe

Support

Sao Paolo -13th richest by 2020

Sao Paolo Stock Exchange (world 3rd

largest)

87 Russian billionaires

Czech Republic

Strategy Formulation

Goal 2

Global acquisition

Objectives

RSA Insurance Group

Support

Product diversification

UK’s largest insurer (13% of

market)

Offset losses

Strategy Formulation

Goal 3

Improve the image and reputation

Objectives

Maintain high approval ratings

Support

Investor relations

Moody’s ratings has 40% in the world

credit rating market

Fitch Ratings in 75 countries

Key Strategies

Expansion and concentration

Expansion and diversification

Marketing

Strategy Implementation and Control

Goal 1: International Expansion and Concentration in current product

• Action Steps• CFO• Finance, Accounting, IT, Operations, all senior management• Outcome – established presence in Brazil, Russia, Czech

Republic• Control

– Market share %– Positive cash flow within 3 yrs.

• Contingency– May need to consider cutting back work force– May need additional help (too successful)– Continued support for critical functions

Strategy Implementation and Control

Goal 2: Product Diversification through global acquisition• Action steps• CFO• Finance, Accounting, IT, Operations, all senior management• Outcome – acquisition of RSA Insurance Group• Control

– Change in revenues from both acquired entity and ML’s core businesses

– Change in EBITDA– Goal of avg. of 5 yr. cash ROI of 10% and 15% ROI by yr. 5

Contingency• Reassess the acquired entity to ascertain why the measures

were not reached and retool what is necessary

Strategy Implementation and Control

Goal 3: Marketing strategy to increase company approval ratings

• Action steps• Director of Marketing• Marketing department, Ad/PR consultant, focus groups• Outcome – increased approval ratings• Control

– Pre-strategy and post-strategy ratings– Polls, surveys, referrals

• Contingency– Examine what, if any, business segments need to be cut/sold.– What is giving company bad image.

Strategy Implementation and Control

Goal 1: • 11/1/2008 – 3/1/2012

Goal 2:• 1/15/2009 – 4/1/2010

Goal 3:• 9/1/2008 – 10/1/2009

What does this mean?• Jan 2009-Oct 2009 Busy!!!• Must make certain necessary resources are

available

Questions?