Morgan Stanley Corporation Report


Morgan Stanley


The company Morgan Stanley has acquired a reputation for being the best in market advice and market execution. Its 53,218 employees in 28 countries connect people, ideas, and capital to help clients achieve their financial objectives (Morgan Stanley online 2000).  The company is one of the top investment banks, in addition to it being a traditional corporate investment banking services that offers services like securities underwriting, mergers, and acquisitions advice, it also offers brokerage and investment management products  and services for institutions and wealthy individuals (Hoovers online 1994).


 


Location of Headquarters


The company’s headquarters is located in Broadway, New York City in the US. Stanley Morgan has 600 offices in 28 countries. It has offices in Africa, Asia, Europe, North and South America (Morgan Stanley online 2000). 


 


Industry products and services


The company offers its services for individual investors and it gives institutional services. Included in the individual investor services it gives are optimization of individual investor’s asset collection, private wealth management, platinum and gold benefits of individual investors, and assistance in finding the nearest local branch the clients can make business with.  Included in the institutional services it offers are securities, investment banking, investment management and researches. As mentioned earlier from Hoovers online (1994), the company is one of the top investment banks, in addition to it being a traditional corporate investment banking services that offers services like securities underwriting, mergers, and acquisitions advice, it also offers brokerage and investment management products  and services for institutions and wealthy individuals. The company is covered by a regulatory structure. Regulatory Structures are rules and regulations of the different types of investments in different parts of the world.  Products have different life cycles. Life Cycle is the Birth of products, its growth, maturity, and downside of products. The company’s products have no life cycles since these are consultancy services.


 


Amount and date of company’s last annual dividend and current market value per share


The company’s annual dividend is 6,488,819 (net of $ 109,733 foreign withholding tax) for the year ended February 28, 2005.  The current market share of the company is .15 as of 2004.


 


Key executives of the corporation


The company’s board of directors includes John J. Mack who is the chief executive officer and the chairman of the board of the company, Roy J. Bostock, Erskine B. Bowles, Sir Howard J. Davies, C. Robert Kidder, Charles H. Noski, O. Griffith Sexton, Dr. Laura D’Andrea Tyson, and Dr. Klaus Zumwinkel (Morgan Stanley Online 2000).   These are the persons that ensure the operations of the company run well. They ensure that the company is traveling within its objectives and it is successful in its industry. The members of the board of directors have experienced so many things and can show a wide range of accomplishments. They had different experiences with various companies; this experience they acquired assists them in making sure the company is following a right path. The experience they acquired assists them to make vital decisions.


 


Global exposure: political and economic risks


Any company operating at any country may experience problems both politically and economically. Since the company is operating at many branches in different parts of the world there is a big risk that they might encounter political and economic problems. Risks are part of the daily things that companies must overcome and Morgan Stanley is capable and can overcome such risks.


 


Through the use of demographics problems can be given proper action. Demographics are the distribution of facts and information needed in a study. It answers questions mostly beginning with who, where, and what. It is used to measure adaptability of products from place to place and person to person. It is also used to measure worldly influences effecting company profits and growth. Problems can be given proper action.  Through analyzing the demographics, the political and economic situation in a country measures can be made to give proper solution to problems.


Financial report analysis


The first table will show the financial report of Morgan Stanley from Hoovers online (1994).  All amounts are in millions of U.S. dollars except share amount.


Year


Revenue


Operating Income


Total Net Income


Diluted EPS     (Net Income)


Nov. 05


,770.0


,224.0


,939.0


4.57


Nov. 04


,549.0


,216.0


,486.0


4.06


Nov. 03


,933.0


,297.0


,787.0


3.45


 


A. Major changes from the previous year


The table shows that from the 2003 to 2005 the revenue, operating income, total net income and the diluted Earnings per share (EPS) of the company increased. This shows how good the company is doing during these 3 years. It also shows how well the company was managed during these years. The improvements that happened during these 3 years can be well commended, as seen in the table significant increases in each category happened during these years. The table showed that during these years there were slight increases in the amount of each category.


 


B. Causes of these changes


These changes can be due to many things. One is due to the continuous struggle of the company to be the best in its industry. The company constantly improves it services and because of that consumers achieve satisfaction. Customer satisfaction leads to encouragement of more costumers to avail the services of the company and this affects the categories stated in the table. Another cause of these changes is the admirable management of the company.  If a company is well managed good results can come out. Through the good effort of the management team the goals and objectives of the company is realized. Lastly a cause of these changes is the dominance of the company against its competitors. The competitive advantage a company has towards its rivals can lead to positive changes in the status of the company.


 


C. Financial strengths and weaknesses of the company


The company’s financial strength is its ability to increase its revenue, operating income, total net income and the diluted EPS. The capacity of the company to make increase in the said category helps it to have a favorable image in the financial market. It also assists in giving it a high market value. The financial weakness of a company is its inability to create huge increase its revenue, operating income, total net income and the diluted EPS. As stated earlier these were significant increases in the amount of each category but it was not that huge. Some things within the company can still be improved so that huge increase in the categories can be realized.


 


Global Competition


Global Competition is competition between companies throughout the world and how it changes from one area to the next. Within global competition a smaller scope exists and this is called Industrial Organization. Industrial Organization is the competition between companies to ease difficulty getting into the industry with the use of similar alternative investment products at varying prices, top companies use this as a way to achieve success through the different products offered.


 


The financial performance of the company compared with competitors


The second table will show the financial performance of the company against competitors from Hoovers online (1994). All amounts are also in millions of U.S. dollars.


 


Morgan Stanley


Citigroup Global Markets


Goldman Sachs


Merrill


Lynch


Annual Sales


,770.0


,065.0


,391.0


,467.0


Market Capital


,874.2


0.0


,451.7


,500.5


 


As shown in the table the company is doing well against its competitors. Among all the companies it has the largest annual sales followed by Goldman Sachs, Merrill Lynch, and Citigroup Global Markets. The company has used a huge sum of capital market and it benefited the company through its annual sales unlike Goldman Sachs and Merrill Lynch who used larger amounts of market capital but still acquired lesser annual sales.


 


Current issues (positive and negative) facing this company


Positive


The positive issue the company is facing is the merging of Morgan Stanley and Dean Witter (Horvitz 42). The union of these two companies can lead to benefits for both companies. Through the union of these two companies the problems they are experiencing can be jointly solved, more people can be used to think about ways to solve problems and how to improve the services offered by both companies. The union of these two companies can lead to better status and realization of the goals and objectives for both companies.


 


Negative


The negative issue the company is facing is the resignation of the some of the best employees of the company and their defection to rival companies (Richardson 32). Employees’ leaving a company is a bad thing but what adds to it being worsened is the defection of these employees to rival companies. Employees that defect to other companies may be used against the former company through the rival company learning from the employee that defects the company’s strategies and other information about the company.  The company should be prepared for the different problems that may arise out of this and for future events that might be caused by such.


 


Issues that the company must address in the future


An issue that the company must address in the future is a wider consumer target. The company is currently offering services mostly to other companies and other people who are well off. This consumer group is a small part of any population. Most population in any country is on the middle class group and the poor group. The company can try to focus on other groups to attain more profits, have huge increase in its consumer population, and boosts the company’s image in its industry.


The company being a good investment at this time


If a person wants to invest, Morgan Stanley is a good company that should be invested at this time. The company is doing well financially and hasn’t had any big problems. A person who wants to invest his/her money can acquire benefits from this company.




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