MORGAN AND STANLEY CASE STUDY

Details of the company

 Started in the year 1935.

 Global Financial service firm.
 More than 600 offices in 30 countries.
 53,000 employees.
 HQ is in New York city.
Operating areas of the firm

Institutional
Securities

Discover Card Asset

Morgan & Stanley Management
services

Retail Brokerage
Merge of Morgan and Stanley

 The firm acquired discover card business as a result of merge with

retail brokerage Dean Writter Discover and co in 1977.
 Retail Brokerage manage $616 billion in client assets.
 Retail Brokerage provides comprehensive brokerage, investment
and financial services to individual investors globally.
 It has 9526 worldwide representatives
 More than 500 retail locations, 485 in united states.
Problems because of the merge
Actions of CEO

 CEO Philip Purcell focused on maximizing profits instead of

generating revenues.
 He adopted cost cutting, job elimination, investing in technology is
low priority.
 After market rebound morgan & Stanley cannot compete compete
in retail.
 CEO has been fired out by management.
 Retail Brokerage has been renamed as Global Wealth Management
Group, Eileen Murray appointed as head of global operations and
technology.
Changes in technology

 Technology and operations budget of 2006 exceeds $500 million.

 Desktop workstations were replaced with backend system for better
view of client portfolio.
 Brokers are enabled to access client data at once which includes
transaction history, contact history and portfolio performance.
 Upgrading of website is being done.
 Tax reporting application has been added.
 Management misassumed that top clients were not interested on
online services. Research shows that wealthier customers want
more control on portfolio.
 Morgan and Stanley generated q2 net income of $1.96 billion, retail
brokerage division posted $157 million in pretax profit, largest
profit than q1 of 2005.
Need of IT

 In 1980 investment in IT is 34% but in 2004 its 50%.

 5 million Americans purchase a product everyday and 19 million
people research a product on internet.
 35 million people receive their news online.