Situational Analysis
Introduction:
IDS Financial Services operate in the consumer financial service industry. After the acquisition by American Express in 1984 the company went through tremendous growth for three consecutive years in terms of revenue (average 30%), financial plan fees (174%) and its sales force (annual rate11%). The company was facing new challenges as to how to maintain this 30 percent growth rate in the market place where the competition was increasing day by day. The consumer financial industry is growing very fast which creates new opportunities to be exploited. With this the competition is also growing as the competitors are becoming more and more aggressive in marketing and selling their products. Now the company is pondering on what should be the strategy in future so that it will come out as a winner. In order to get a comprehensive picture of the situation, the analysis is divided into four sections, Customer, Compititor, Company and Context as follows.
Merrill Lynch logo c. 1917
Merrill Lynch, Pierce, Fenner & Smith logo in use ...
English: Merrill LynchCustomer:
The target customers were primarily those people who had annual income of more than $25000. There were mainly two types of consumers as confident investor and advisor-dependent. As far as financial plan was concerned, there was less chance in case of confident investors as these people were more educated and had the capability to manage their own financial needs. The real opportunity lies in targeting the advisor-dependent investor as they don't have time or interest in self financial management. People generally go for financial plan when they require long term investment for some future benefit like career advancement, approach of retirement, purchase of house, inherited wealth etc. There is huge potential of income from financial plan as 9.17 ((42 million* 84%)* 26%) million people are ready to go for a financial plan within next 12 months as per a market survey.