Executive Summary Edward Jones is a brokerage house with a unique strategy. . Their unique focused strategy was based on having multiple offices around the country , each of them having one Financial Advisor ( FA’s ). Edward Jones invests a lot in employees with low experience in order to train them their way. This gives them very low turnover. Moreover Edward Jones focuses on suburban zones.
What strategy should Edward Jones be using in the future? Company Overview Since it was founded in 1922 by Edward Jones Sr, the company has expanded throughout the North America and the World.With John Bachmann as his partner, Edward Ted Jones jr. made the company grew rapidly by focusing on individual investors. In 2006, Edward Jones became the 4th largest brokerage firm in the United States and held books overseas , especially in the United Kingdom. Industry Analysis Nowadays , 50% of family households own equities. For many, it is a way to improve their lives later on as they approach retirement. Trends are slowly starting to change due to the appearance of discount brokers.
These brokers offer low-priced trades.Many firms are switching to Defined Contribution Retirement Plans. These plans are defined contribution plans. This significates that the employer’s annual contribution is specified in the contract. Moreover, investment earnings make the benefits from this plan fluctuate. In addition the brokerage industry is growing with the constant increase value of the stock market. Edward Jones Issues Due to the fast-paced evolution of the business and due to competitor threat, questions are being asked internally about how to counter these issues.The past imposed limits should perhaps be questionned in order to make way for newer and more efficient strategies.
However it is difficult to change the company without affecting its core values and its competitive advantages. SWOT Analysis Edward Jones posesses many strenghts in their corporation. They hire smart licenced brokers with low experience. By doing so, they can train them and have them work their way. This helps in uniformising one way of work accross all the offices. Moreover, the brokers are usually affected one office.
They get to manage it and make it profitable. In addition, there are competitive incentive plans for strong employees. Indeed, a reward program is implemented in order to keep track of employee success and encourage him.
This helps in gaining employee loyalty and reducing turnover. Also, the corporation has strong inner ownership. One of the strongest points that Edward Jones has is that they diversified geographically.
FA’s have the possibility to choose which rural area they will try and implement themselves in. The company aims for average income americans.By getting themselves geographically known, Edward Jones is building a name for itself. Another strength is tapping into high growth segments such as Hispanic Americans, African Americans and Asian Americans.
Edward Jones has a strong consumer scope. They are devoted to the customer and were even ranked first in JD Power’s client satisfaction scores. Marketing-wise, the firm utilizes brochures and newsletters ( 55 million sent per annum ). They also own the name of the St Louis football stadium call the Edward Jones Dome.
They invested in s multi million dollar evening television campaign back in 2006 in order to raise awareness towards them. Edward Jones also possesses weaknesses. The company has difficulties in diversifying. It has no multi functions. It is solely focuses on indiviual customers.
The location of their businesses are often in suburban areas. Their numbers of offices in cities are low. They have been running the same strategy for 30 years.
Competitors have had time to use it or inspire themselves with it.Opportunity-wise, Edward Jones offers a new lifestyle to its employees and its customers. The FA’s usually get to decide in which region they would like to work. One of the company’s value is to make to make the customer feel at ease and at home when he visits Edward Jones. Therefore, the offices are very living-room like in order to appease the mind of clients. Opportunities are available to Edward Jones , they need to start multi functionning and add new services (cross-selling services..
. ) .There is lso a lot of geographical expansion that Edward Jones could perform. Many zones are not covered by their services.
There are many potential new segments that the firm can try and target. Concerning the threats, Edward Jones faces more and more competition in the brokers market such as Charles Schwaub, Merrill Lynch, ETFC… The internet is also a threat to Edward Jones. Indeed, what is said about the company cannot be controlled.
This has beem amplified with the arrival of the web 2. 0 ( social networks for instance ). Porter’s 5 Forces Evaluation and Reccomendations