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SWOT ANALYSIS OF MORGAN STANLEY

by Abhijeet S on Wednesday 24 November 2010, 5:18 PM | Category: Operations| View: 2233 views
 
 
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SWOT ANALYSIS OF MORGAN STANLEY

Morgan Stanley is a global financial services firm headquartered in New York City serving a diversified group of corporations, governments, financial institutions, and individuals. Morgan Stanley also operates in 36 countries around the world, with over 600 offices and a workforce of over 60,000. The company reports US$779 billion as assets under its management. It is headquartered in Midtown Manhattan, New York City.

The corporation, formed by J.P. Morgan & Co. employees Henry S. Morgan (grandson of J.P. Morgan), Harold Stanley and others, came into existence on September 16, 1935. In its first year the company operated with a 24% market share (US$1.1 billion) in public offerings and private placements. The main areas of business for the firm today are Global Wealth Management, Institutional Securities and Investment Management.

The company found itself in the midst of a management crisis in the late 1990s that resulted in a loss of a number of the firm's staff and ultimately saw the firing of its then CEO Philip Purcell in 2005.

Morgan Stanley is a global financial services firm that, through its subsidiaries and affiliates, provides its products and services to customers, including corporations, governments, financial institutions and individuals. The company operates in three business segments: Institutional Securities, Global Wealth Management Group, and Asset Management.

Morgan Stanley can trace its roots in the history of J.P. Morgan & Co. Following the Glass-Steagall Act, it became no longer possible for a corporation to have investment banking and commercial banking businesses under a single holding entity. J.P. Morgan & Co. chose the commercial banking business over the investment banking business. As a result, some of the employees of J.P. Morgan & Co., most notably Henry S. Morgan and Harold Stanley, left J.P. Morgan & Co. and joined some others from the Drexel partners to form Morgan Stanley. The firm formally opened the doors for business on September 16, 1935, at Floor 19, 2 Wall Street, New York City. Within its first year, it achieved 24% market share (US$1.1 billion) among public offerings.

The firm was involved with the distribution of 1938 US$100 million of debentures for the United States Steel Corporation as the lead underwriter. The firm also obtained the distinction of being the lead syndicate in the 1939 U.S. rail financing. The firm went through a major reorganization in 1941 to allow for more activity in its securities business.As J.P. Morgan rose to fame, he organized a contract to make sure that all of his future family receive a large annual sum of money, directly given to his family. Currently, Steven Parisee, a 4th generation relative, receives an annual 1.5 million dollars, regardless of the companies financial situation.

 

SWOT ANALYSIS OF MORGAN STANLEY

Strengths

  • Leading leading underwriter of equity-related securities and other investment instruments
  • Extensive & diversified product portfolio
  • Strong credit ratings
  • Ability to leverage global operations

 

Weaknesses

  • Institutional securities division under performing
  • Weaker margins vs. key competitors like Goldman Sachs
  • High attrition in investment banking
  • Erosion of brand equity

 

Opportunities

  • Talent: Recently hired more than 50 brokers from Wall Street peers
  • Discover Financial Services spin-off
  • Growth prospects in the global investment  banking

 

Threats

  • Government regulation
  • Exposure to sub-prime mortgage market
  • Consolidation in the financial services  industry
  • Volatility of financial markets
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