Taylor Boucher - Alisha Cote

Ben Blackstone - Orlando Melado

Table of Contents

Company Overview

History

Current Vision

Current Mission

Revised Vision

Revised Mission

Existing Strategies & Performance

External Analysis

Industry Analysis

Industry Trends

Opportunities

Threats

CPM

EFE

Table of Contents

Internal Audit

Organizational Structure

Income Statement

Balance Sheet

Financial Ratios

Strengths

Weaknesses

IFE

Strategy Formulation

SWOT Matrix

Space Matrix

GSM

Possible Strategies

QSPM

Matrix Analysis

Final Strategy

Objectives

Projected Financials

Update

Sources

E*TRADE History I

1982 - Founded as a service bureau by Bill Porter, a physicist and inventor. E*TRADE provided online quote and trading to Fidelity, Charles Schwab, and Quick & Reilly.

Bill was the first to envision allowing individuals to use personal computers to invest, paying far less than the traditional brokerage fees.

1992 - E*TRADE Securities, Inc. was born and began to offer online investing services through America Online and CompuServe.

1996 – Launch of www.etrade.com

E*TRADE History II

1996 – E*TRADE went public, one year later Bill handed the reins over to Christos Cotsakos. Christos’s leadership drove E*TRADE to a global leader in online personal financial services with websites around the world.

2000 – Introduced E*TRADE Bank, purchased Telebanc Financial (now E*TRADE Financial), an online bank with more than 100,000 depositors, E*TRADE also acquired Electronic Investing Corporation.

2008 – E-Trade sold its Canadian division to Scotiabank for CAD$444 million, as part of program to stabilize the company.

History III

 2010, Steven Freiberg, former co-CEO of Citigroup's global consumer group and former head of the bank's credit card unit, took the reins as E-Trade's new CEO while Druskin continues in his role as board chairman.

2010 – Actress Lindsay Lohan sued started a lawsuit against E*TRADE,  alleging that a character named "Lindsay" appearing in a television advertisement for the company, described pejoratively as a "milk-aholic", invoked her "'likeness, name, characterization, and personality' without permission, violating her right of privacy". 

Current Vision

“To empower self-directed investors to make informed investment decisions and take control of their financial future with anytime, anywhere access to the world’s major investment markets.”

Current Mission

“To create long term shareholder value through superior financial performance driven by the delivery of a diversified range of innovative, customer-focused financial products and services and supported by an operating culture based on the highest levels of teamwork, efficiency, and integrity.”

Revised Vision Statement

“To provide our customers with the ability to make maximum profits, anytime and anywhere.”

Revised Mission Statement

“To be the “go-to” company for investment and financial needs around the world(2, 3). Continually upgrading our technology to be the most innovative financial firm, which in turn will help us beat out competition (4, 5, 7). Our customer’s prosperity is our top priority (1). We strive to instill our employees with all the knowledge they need to help our customers and themselves make informed financial decisions (9). We encourage our employees to live by our philosophy, by making our world more profitable, we hope to encourage people to give more to those in need and make our world a happier place (6, 8).”

Existing Strategies & Performance

Our core business is our trading and investing customer franchise. Building on the strengths of this franchise, our growth strategy is focused on four areas: retail brokerage, corporate services and market making, wealth management, and banking.

 

 • Our retail brokerage business is our foundation. We believe a focus on these key factors will position us for future growth in this business: growing our sales force with a focus on long-term investing, optimizing our marketing spend, continuing to develop innovative products and services and minimizing account attrition.

 

 • Our corporate services and market making businesses enhance our strategy by allowing us to realize additional economic benefit from our retail brokerage business. Our corporate services business is a leading provider of software and services for managing equity compensation plans and is an important source of new retail brokerage accounts. Our market making business allows us to increase the economic benefit on the order flow from the retail brokerage business as well as generate additional revenues through external order flow.

 

 • We also plan to expand our wealth management offerings. Our vision is to provide wealth management services that are enabled by innovative technology and supported by guidance from professionals when needed.

 

 • Our retail brokerage business generates a significant amount of customer cash and we plan to continue to utilize our bank to optimize the value of these customer deposits.

External Analysis

Industry Analysis of Major Competitors

Fidelity Investments – privately held companies that is currently the largest broker in the industry with 5.2 billion in revenue.

Charles Schwab – Second largest broker with $4.5 billion at year-end 2010.

TD Ameritrade – approximately $2.6 billion in revenues.

E*TRADE ranked fourth with $2.4 billion in revenues.

Industry Trends

During the five years to 2012, revenue for the Financial Data Service

Providers industry is expected to grow at an annualized rate of 4.1% to

roughly $6.1 billion. Despite the financial markets' turmoil during the

recession in 2008 and 2009, many industry operators were able to

evade significant losses. During the recession, however, the level of

activity from financial institutions, including investment banks,

securities brokers and commodity contract dealers, dropped severely.

This decline led to a lack of demand for industry services, as these

financial institutions comprise the largest downstream market for

industry firms. In turn, industry revenue fell 3.1% and 3.4% during 2008

and 2009, respectively

http://www.ibisworld.com/industry/financial-data-service-providers.html

Opportunities

1. High growth of online trading market.

2. Emerging economies presenting millions of new customers every day for investment firms.

3. In February 2010, 7,677 mutual funds were in the U.S. with approximately $11 trillion in assets under management that is 15% increase from December 2008.

4. Increase in the use of cellphones; mobile banking and trading.

5. Number of customers are more likely to refer E*TRADE’s website to other potential customers.

6. Co-branding increases the amount of potential consumers.

7. The Baby Boomer population which is the largest market segment in the U.S. holds 2/3 of the nation’s income.

Threats

1. E*TRADE's revenues rely on the economy.

2. There are a lot of competitors in the market. Ex. Brokerage firms, online brokerage firms, pure-play internet banks, traditionally “brick & mortar” commercial banks, and savings banks.

3. Easy barrier to entry

4. Rapid changing environment.

5. The possibility of computer hackers.

6. Unemployment rate is 9%.

7. E*TRADE faces extensive banking and security rules and regulations.

CPM

EFE Opportunities

EFE Threats

Internal Audit

Organizational Structure

Income Statement

Income Statement

Balance Sheet Assets

Balance Sheet Liabilities & Shareholder’s Equity

Financial Ratios

Quick ratio

Current Ratio

Debt-to-Equity ratio

Return on investment

Revenue growth 3 year

Strengths

1. E*TRADE has 4.3 million customer accounts including 2.7 million brokerage accounts.

2. Net new brokerage accounts increased to 51,000 from 28,000 in the prior quarter and 2,000 in the prior year quarter.

3. As stock markets dropped more than 1,500 points on August 8-11, 2011, E*TRADE’s business nearly doubled.

4. E*TRADE uses co-branding to market its services at a discount. Example, Hilton HHonors Worlwide have a market relationship that provides Hilton Hhonors bonus points.

5. E*TRADE provides 24/7 services.

6. E*TRADE guarantees total protection, and promises 100% fraud coverage and privacy protection.

7. The E*TRADE Mobile application lets you buy and sell transactions right from your cell phone. E*TRADE Mobile makes trading on-the-go a breeze.

Weaknesses

1. Limited number of physically branches for people to physically go in for customer assistance.

2. Charges many miscellaneous fees, more than competitors.

3. E*TRADE offers free delayed quotes which are 15 minutes behind real time market prices. You have to be an active trader in order to qualify for free real time trades.

4. High Account Fees - E*TRADE still has account inactivity fees and high account transfer fees.

5. E*TRADE’s revenue are under half of its top competitors revenue. Fidelity Investments revenues of $5.2 billion, Schwab $4.5 billion, TD Ameritrade $2.6 billion and E*TRADE $2.4 billion in 2010.

6. E*TRADE Pro platform is available at no charge only to customers who execute at least 30 stock or options trades during a calendar quarter.

7. Bad customer service.

IFE Strengths

IFE Weaknesses

Strategy Formulation

SWOT Matrix

Space Matrix

• Backward, Forward, Horizontal Integration• Market Penetration• Market Development• Product Development

GSM

• Market Development• Market Penetration• Product Development• Horizontal Integration• Divestiture• Liquidation

Possible Strategies

Increase Co-Branding with other companies such as the Hhonors program.

Increase sales by 10% through improved customer service

QSPM Opportunities & Threats

QSPM Strengths & Weaknesses

Matrix Analysis

Balance Scorecard

Final Strategy

Increase sales by 10% through improving customer service.

Have customer service workshops yearly to help employees get a better understanding of how to treat the customers.

Surveys

Bonus customer service customers.

Bonus points for recommending E*TRADE.

Objectives

Year 1

Increase revenue by 10%

Have our first companywide employee workshop on customer service

Survey customers at the end of 2011

Have a positive net income

Year 2

Increase revenue by another 10%, focusing on long-term investments

Reduce credit loss by 5%

Have second annual customer service workshop for employees

Survey customers at the end of 2012

Year 3

Increase long term investments by another 10%

Evaluate how effective customer service workshops have been on retaining customers

 

Projected Income Statement

Projected Income Statement

Projected Balance Sheet

Projected Balance Sheet

Update

2013 – In 2013 the company had over 64 million total views and over 26,000 subscribers on YouTube, more than 108,000 Facebook Baby and Corporate pages fans, and more than 17,000 Twitter followers.

2013, Paul T. Idzik was appointed CEO. Idzik had previously been Group Chief Executive of DTZ and also served ten years at Barclays bank.

E Trade introduced the E*TRADE mobile for Android 1 which allows users to get real time streaming quotes, place trades, manage account and much more from an Android powered device.

In August 2013 E*TRADE recorded a 5% increase from July and a 21 % increase from the year ago period. The company added 30,132 gross new brokerage accounts in August, ending the month with approximately 3.0 million brokerage accounts. – an increase of 9,466 from July.

In 2013, E* trade completed a service transfer of 1.6 billion in 1-4 family mortgages, prompted by changes to a service relationship.

Sources