Morgan Stanley

Morgan Stanley is one of the world's largest investment banks and global financial services firms, which serves a diversified group of corporations, governments, financial institutions, and individuals. Morgan Stanley's world headquarters is in New York City with regional headquarters in London and Hong Kong. The company operates in three business segments: Institutional Securities, Global Wealth Management Group, and Asset Management. On February 5, 1997, the company merged with Dean Witter, but to foster brand recognition and marketing, the Dean Witter name was dropped in 2001.

In order to carry on and remain profitable in today's aggressive market, Investment Banks need to be able to respond and adjust to changes in the external environment and ideally be hands-on in impacting these forces. Current trends that are affecting the investment banking industry include globalization, increasing emphasis on higher education, demographic changes, erosion of the Glass-Steagall Act, heightened merger and acquisition activity, government movements towards privatization in developed and emerging markets, and rapid advancements in technology development.

Globalization has already had and will keep on having an impact on the investment banking industry. As the world becomes a "global village", international markets become easily reached. This leads to vast opportunities in many different ways. Companies continue to expand abroad, investing more in physical assets like plants, property, and equipment. These companies need to raise increasing amounts of capital to grow their operations and offer more products and services in foreign markets. This need for additional financing increases the demand for debt and equity underwriting. It has also created opportunities for firms to offer new services such as helping corporations manage interest rate or currency risks.

External Factor Evaluation Matrix

Key External Factors Weight Rating Score

Opportunities

1. Industry Consolidation .1 4 .4

2. Growth of MN Clients .1 4 .4

3. Increase in M&A Consulting .1 4 .4

4. Privatization .1 4 .4

5. Glass-Steagal .15 3 .45

Threats

1. Declining Margins .1 3 .3

2. SEC .15 3 .45

3. Glass-Steagall .2 3 .60

Total 100/100 3.40

Ratings: 1=poor; 4=superior

There are several strengths that allow Morgan Stanley to be a major player in the field of global investment banking. The first strength of the firm is its financial position and backing. The company is also the largest U.S. securities firm calculated by market capitalization. Another internal strength is the firm's commitment to spend billions on technology. The firm also has a great ability to attract new customers. A significant portion of their revenues comes from first-time customers. The reputation of Morgan Stanley is also a key factor. Finally, Morgan Stanley has continued to make a commitment to finding and keeping the most talented employees.

Morgan Stanley's internal weaknesses, or opportunities, can be divided into three main areas: Internal Liquidity, Profitability, and Growth Analysis.

Internal Factor Evaluation Matrix

Key InternalFactors Weight Rating Score

Strengths:

1. Financial Position .075 4 .3

2. Reputation .2 4 .8

3. Commitment to technology .075 4 .3

4. Ability to attract new customers .05 4 .2

5. Human Capital .15 4 .6

Weaknesses:

1. Internal Liquidity .10 3 .30

2. Profitability .15 3 .45

3. Growth Analysis .15 3 .45

Total 100/100 3.40

Ratings: 1=Minor; 4=Major

The Threats-Opportunities-Weaknesses-Strengths (TOWS) Matrix:

This matrix helps to create four types of strategies: SO Strategies, WO Strategies, ST Strategies, and WT Strategies.

Strengths:1. Financial Position2. Reputation3. Commitment to Technology4. Ability to attract new customers5. Human Capital Weaknesses:1. Internal Liquidity 2. Profitability 3. Growth Analysis

Opportunities:1. Industry Consolidation 2. Growth of MN Clients