Taylor Boucher - Alisha Cote
Ben Blackstone - Orlando Melado
Table of Contents

Company Overview

External Analysis

History

Industry Analysis

Current Vision

Industry Trends

Current Mission

Opportunities

Revised Vision

Threats

Revised Mission

CPM

Existing Strategies &
Performance

EFE
Table of Contents

Internal Audit

Organizational
Structure

Income Statement

Balance Sheet

Financial Ratios

Strengths

Weaknesses

IFE

Strategy Formulation

SWOT Matrix

Space Matrix

GSM

Possible Strategies

QSPM

Matrix Analysis

Final Strategy

Objectives

Projected Financials

Update

Sources
E*TRADE History I

1982 - Founded as a service bureau by Bill Porter, a
physicist and inventor. E*TRADE provided online quote
and trading to Fidelity, Charles Schwab, and Quick &
Reilly.

Bill was the first to envision allowing individuals to use
personal computers to invest, paying far less than the
traditional brokerage fees.

1992 - E*TRADE Securities, Inc. was born and began to
offer online investing services through America Online
and CompuServe.

1996 – Launch of www.etrade.com
E*TRADE History II

1996 – E*TRADE went public, one year later Bill handed
the reins over to Christos Cotsakos. Christos’s
leadership drove E*TRADE to a global leader in online
personal financial services with websites around the
world.

2000 – Introduced E*TRADE Bank, purchased Telebanc
Financial (now E*TRADE Financial), an online bank with
more than 100,000 depositors, E*TRADE also
acquired Electronic Investing Corporation.

2008 – E-Trade sold its Canadian division
to Scotiabank for CAD$444 million, as part of program
to stabilize the company.
History III

2010, Steven Freiberg, former co-CEO of Citigroup's
global consumer group and former head of the bank's
credit card unit, took the reins as E-Trade's new CEO
while Druskin continues in his role as board chairman.

2010 – Actress Lindsay Lohan sued started a lawsuit
against E*TRADE, alleging that a character named
"Lindsay" appearing in a television advertisement for the
company, described pejoratively as a "milk-aholic",
invoked her "'likeness, name, characterization, and
personality' without permission, violating her right of
privacy".
Current Vision

“To empower self-directed investors to make informed
investment decisions and take control of their financial
future with anytime, anywhere access to the world’s
major investment markets.”
Current Mission

“To create long term shareholder value through superior
financial performance driven by the delivery of a
diversified range of innovative, customer-focused
financial products and services and supported by an
operating culture based on the highest levels of
teamwork, efficiency, and integrity.”
Revised Vision Statement

“To provide our customers with the ability to make
maximum profits, anytime and anywhere.”
Revised Mission Statement

“To be the “go-to” company for investment and
financial needs around the world(2, 3). Continually
upgrading our technology to be the most innovative
financial firm, which in turn will help us beat out
competition (4, 5, 7). Our customer’s prosperity is our
top priority (1). We strive to instill our employees with
all the knowledge they need to help our customers and
themselves make informed financial decisions (9). We
encourage our employees to live by our philosophy, by
making our world more profitable, we hope to
encourage people to give more to those in need and
make our world a happier place (6, 8).”
Existing Strategies &
Performance
Our core business is our trading and investing customer franchise. Building on the strengths of this franchise, our growth
strategy is focused on four areas: retail brokerage, corporate services and market making, wealth management, and
banking.

• Our retail brokerage business is our foundation. We believe a focus on these key factors will position us for future
growth in this business: growing our sales force with a focus on long-term investing, optimizing our marketing spend,
continuing to develop innovative products and services and minimizing account attrition.

• Our corporate services and market making businesses enhance our strategy by allowing us to realize additional
economic benefit from our retail brokerage business. Our corporate services business is a leading provider of software
and services for managing equity compensation plans and is an important source of new retail brokerage accounts. Our
market making business allows us to increase the economic benefit on the order flow from the retail brokerage business
as well as generate additional revenues through external order flow.

• We also plan to expand our wealth management offerings. Our vision is to provide wealth management services that
are enabled by innovative technology and supported by guidance from professionals when needed.

• Our retail brokerage business generates a significant amount of customer cash and we plan to continue to utilize our
bank to optimize the value of these customer deposits.
External Analysis
Industry Analysis of Major
Competitors

Fidelity Investments –
privately held companies that
is currently the largest broker
in the industry with 5.2
billion in revenue.

Charles Schwab – Second
largest broker with $4.5
billion at year-end 2010.

TD Ameritrade –
approximately $2.6 billion in
revenues.

E*TRADE ranked fourth with
$2.4 billion in revenues.
Industry Trends

During the five years to 2012, revenue for the Financial Data Service
Providers industry is expected to grow at an annualized rate of 4.1% to
roughly $6.1 billion. Despite the financial markets' turmoil during the
recession in 2008 and 2009, many industry operators were able to evade
significant losses. During the recession, however, the level of activity
from financial institutions, including investment banks, securities brokers
and commodity contract dealers, dropped severely. This decline led to a
lack of demand for industry services, as these financial institutions
comprise the largest downstream market for industry firms. In turn,
industry revenue fell 3.1% and 3.4% during 2008 and 2009, respectively

http://www.ibisworld.com/industry/financial-data-service-providers.html
Opportunities
1.
High growth of online trading market.
2.
Emerging economies presenting millions of new customers
every day for investment firms.
3.
In February 2010, 7,677 mutual funds were in the U.S.
with approximately $11 trillion in assets under
management that is 15% increase from December 2008.
4.
Increase in the use of cellphones; mobile banking and
trading.
5.
Number of customers are more likely to refer E*TRADE’s
website to other potential customers.
6.
Co-branding increases the amount of potential consumers.
7.
The Baby Boomer population which is the largest market
segment in the U.S. holds 2/3 of the nation’s income.
Threats
1.
E*TRADE's revenues rely on the economy.
2.
There are a lot of competitors in the market. Ex.
Brokerage firms, online brokerage firms, pure-play
internet banks, traditionally “brick & mortar”
commercial banks, and savings banks.
3.
Easy barrier to entry
4.
Rapid changing environment.
5.
The possibility of computer hackers.
6.
Unemployment rate is 9%.
7.
E*TRADE faces extensive banking and security rules
and regulations.
CPM
EFE Opportunities
EFE Threats
Internal Audit
Organizational Structure
Income Statement
Income Statement
Balance Sheet Assets
Balance Sheet Liabilities &
Shareholder’s Equity
Financial Ratios

Quick ratio

Current Ratio

Debt-to-Equity ratio

Return on investment

Revenue growth 3 year
Strengths
1.
E*TRADE has 4.3 million customer accounts including 2.7 million
brokerage accounts.
2.
Net new brokerage accounts increased to 51,000 from 28,000 in
the prior quarter and 2,000 in the prior year quarter.
3.
As stock markets dropped more than 1,500 points on August 8-11,
2011, E*TRADE’s business nearly doubled.
4.
E*TRADE uses co-branding to market its services at a discount.
Example, Hilton HHonors Worlwide have a market relationship
that provides Hilton Hhonors bonus points.
5.
E*TRADE provides 24/7 services.
6.
E*TRADE guarantees total protection, and promises 100% fraud
coverage and privacy protection.
7.
The E*TRADE Mobile application lets you buy and sell transactions
right from your cell phone. E*TRADE Mobile makes trading on-thego a breeze.
Weaknesses
1.
Limited number of physically branches for people to physically go
in for customer assistance.
2.
Charges many miscellaneous fees, more than competitors.
3.
E*TRADE offers free delayed quotes which are 15 minutes behind
real time market prices. You have to be an active trader in order
to qualify for free real time trades.
4.
High Account Fees - E*TRADE still has account inactivity fees and
high account transfer fees.
5.
E*TRADE’s revenue are under half of its top competitors revenue.
Fidelity Investments revenues of $5.2 billion, Schwab $4.5 billion,
TD Ameritrade $2.6 billion and E*TRADE $2.4 billion in 2010.
6.
E*TRADE Pro platform is available at no charge only to customers
who execute at least 30 stock or options trades during a calendar
quarter.
7.
Bad customer service.
IFE Strengths
IFE Weaknesses
Strategy Formulation
SWOT Matrix
Space Matrix
•
•
•
•
Backward, Forward, Horizontal Integration
Market Penetration
Market Development
Product Development
GSM
•
•
•
•
•
•
Market Development
Market Penetration
Product Development
Horizontal Integration
Divestiture
Liquidation
Possible Strategies

Increase Co-Branding with other companies
such as the Hhonors program.

Increase sales by 10% through improved
customer service
QSPM Opportunities &
Threats
QSPM Strengths &
Weaknesses
Matrix Analysis
Balance Scorecard
Final Strategy

Increase sales by 10% through improving customer
service.

Have customer service workshops yearly to help employees
get a better understanding of how to treat the customers.

Surveys

Bonus customer service customers.

Bonus points for recommending E*TRADE.
Objectives
Year 1

Increase revenue by 10%

Have our first companywide employee workshop on customer service

Survey customers at the end of 2011

Have a positive net income
Year 2

Increase revenue by another 10%, focusing on long-term investments

Reduce credit loss by 5%

Have second annual customer service workshop for employees

Survey customers at the end of 2012
Year 3

Increase long term investments by another 10%

Evaluate how effective customer service workshops have been on retaining customers
Projected Income Statement
Projected Income
Statement
Projected Balance Sheet
Projected Balance Sheet
Update

2013 – In 2013 the company had over 64 million total views and
over 26,000 subscribers on YouTube, more than 108,000 Facebook
Baby and Corporate pages fans, and more than 17,000 Twitter
followers.

2013, Paul T. Idzik was appointed CEO. Idzik had previously been
Group Chief Executive of DTZ and also served ten years
at Barclays bank.

E Trade introduced the E*TRADE mobile for Android 1 which allows
users to get real time streaming quotes, place trades, manage
account and much more from an Android powered device.

In August 2013 E*TRADE recorded a 5% increase from July and a 21
% increase from the year ago period. The company added 30,132
gross new brokerage accounts in August, ending the month with
approximately 3.0 million brokerage accounts. – an increase of
9,466 from July.

In 2013, E* trade completed a service transfer of 1.6 billion in 1-4
family mortgages, prompted by changes to a service relationship.
Sources