Morgan Stanley Threat

  • Evaluate Morgan Stanley's business using the Competitive Forces Model.

Porter's five forces model is a technical analysis to look for the profitability of industry, further make clear the following:

Threat of New Entrants: It is significant barriers to stop new entry to penetrate this professional industry as new entry have to ensure their competence to handle the complex and critical area, such as, special requirements and license application. Therefore, the risk of new entrants is relatively low.

Threat of Substitute: The financial services industry is concentrated and balanced as the most significant 50 firms hold 90% of the marketplace (Hoovers, 2008). It really is clear that no other financial mechanism like Morgan Stanley to compete in the global financial business, securities organizations and banks and also give you a wider range of services. Therefore, the threat of substitute is reasonably low.

Bargaining Power of Customers: Customers are considered relatively high as alternative channels for selecting different services, qualities and prices or specific products anywhere and anytime in the global market through high technology, such as, TV, phones, promotion catalogues and Internet.

Bargaining Power of Suppliers: There are lots of uncertain conditions and barriers under the circumstances of International Securities and Financial Loan market. Therefore, the energy of suppliers is obviously high.

Degree of Rivalry: There remain 2000 companies in the industry, major opponents are: Goldman Sachs and Merrill Lynch & Co. , Inc. (Hoovers, 2008) they provides similar value of business transactions and resources. Therefore, it is high risk for buyers to change in one competitor's product to some other.

  • If you were James Gorman, the new head of Global Wealth Management, what information systems will you invest in? Why? Do you consider Morgan Stanley's plans for a client information system are worthwhile?

Customer Relationship Management (CRM) will probably be worth to introduce to James Gorman for the permanent investment. CRM enhances better services across former lines and bringing it back office to facilitate the functions much closer together. And in addition offers a 360-view of the customer relationship and services in every touch-point, such as, take away the geographical boundaries and provide 24-hours and 7-days services to the clients. Furthermore, it creates the functions of sales and marketing automation to be able to maximizing the full total sales potential and the comprehensive solution across all areas of customer enquires.

The benefits of CRM, it can effective use of information technologies permits the task done in efficient and cost-effective and achieve customers' satisfaction providing a channel for better communication with both customers and brokers. To ensure the data need to be available, accurate and consistent in a central sources and also allows real-time information and quotes to the clients.

Before March 2005, Morgan Stanley's computer system was not well-integrated and antiquated. Brokers were not in a position to retrieve the client's updated portfolio and caused many top brokers left and also took away important clients. Thus, the profits dropped down and received many complaints from clients' website.

In permanent, Morgan Stanley should be established a well-integrated system and everything systems are interrelated and interdependent. It is beneficial to each of the three management levels. For instances, an integrated client information system can allow procedures more flexible and cost-effective. It offers powerful new capacities and increases the interactive between your employees and customers through information sharing and transforming. To control properly, current home elevators performance can measure against the future events and possible scenarios. The external information allows strategic managers to measure the uncertain future and seek to adjust to fast-moving changes.

  • Aside from new systems, what changes in management and organization are required to restore earnings and profit growth at the Global Wealth Management Group?

As area of the reorganization of business following the merger with retail brokerage Dean Witter, Morgan Stanley has to overcome the barriers which described in value chain model in order to minimize the difficulties available process through team effort to direct toward producing revenue and profit growth in global financial industry.


An efficient information system allows the brokers of Morgan Stanley easier generated the updated customer's portfolio which allows individual brokers preparing, fulfilling and deeply understanding the needs of customers. It can help Morgan Stanley to focus on the potential home based business and direction in order to increasing the power of competitive advantage and profitability in the foreseeable future and allows Morgan Stanley reviewing their performance to find out their further planning.


Morgan Stanley should change their old ways of doing things, such as, increase communication and well-integrated system. This removes the sensation of disrespected outsiders of former Dean Witter employees and let them feel safe and easier to assimilate new technologies. To be able to achieving the effect on long lasting change in work behavior requires more than trained in the use of a system.


Hoovers, 2008

http://www. hoovers. com/morgan-stanley/--ID__15970--/free-co-factsheet. xhtml

The National B2B Centre, 2008

http://www. businesslink. gov. uk/bdotg/action/layer?topicId=1075422922

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