Goldman Sachs Harvard Case Solution & Analysis

Goldman Sachs Case Study Solution

Critical Issues

  1. With the increasing size of customer base and marks, it has become difficult to manage the cost of operations and earn high profit margins, especially with high market offerings by different players.
  2. The company is facing increasingly intense competition from Vanguard, Black Rock. That is offering similar services in almost similar markets. This may erode the value proposition of the company and may result in dilution of brand recognition in the ultimate markets.
  3. Though the company has a customer centric approach and high customer value, however, it has limited brand awareness and brand positioning in the mind of the customers, such may drive away the competitive edge and may result in ultimate losses.

Marketing Goals and Objectives

  1. The goals of Goldman Sachs is to create value for the customers. In doing so, it aims to offer extended, customized and personalized service to the households and organizational clientele so as to differentiate itself from the competition and create the ultimate value for the customer base.

Objectives

  1. The main objective of the company is to increase the sales in the current period. In doing so, the objective is to enter more markets through acquisition or through organic reach.
  2. Also, to develop a strong customer marketing and management strategy that offers extended ease to the customers, adhering to the current lifestyle, and needs in the markets. This may include the prime focus of the company towards innovation and Fin tech.
  3. Goldman Sachs aims to increase the brand awareness through incorporating a digital marketing strategy. The main focus is to attract the customer through social media and digital means
  4. Lastly, the aim of Goldman Sachs is to create a sustainable competitive edge in the existing market through incorporating the innovative financial models and to maintain its leading position in other markets, making itself an effective and efficient global investment player.

Marketing Strategies to create value

Segmentation Strategy

Goldman Sachs will seek after the psycho-demographic division procedure alongside significant statistic division methodology. In doing as such, the clients will be segregated based on sorts and portfolio measure. The prime clients would be the family unit and medium industry players, for example, small association. Moreover, the clients with salary level higher than $5000 will be focused on, who have been working in any association for over a year. Such levels of pay were chosen since these gathering would encourage them to utilize their salary to contribute.

Moreover, the organizational players will be targeted, who have been operating in the market for more than 5 years. Such mid-sized organizations with revues up to $1 billion and will be the prime focus of the organization, as they are in the state of expansion and looking for opportunities to raise the capital to significantly higher rates.

Target Marketing

By dissecting the qualities and shortcomings of every one of the market portion, it has been inferred that the medium sized associations hoping to extend in the market through capital raise are the most commendable markets for the organization to target. It is because of the fact, that since these association have substantial holds and an inclination to develop in the market with restricted capital, the requirement for such speculation is required most by the organization.

In addition, the customer life time value of such market segment is quite uniform and long due to the sustainable operation for the last five years, along with the ability to generate cash of nearly $1 billion in the past. Such depicts its sustainability and value creation along with retained customer relations in the near future.

This is one of the prime reasons to select the particular market over others. Since the SME sector is forecasted to increase in the market over the next five decades with uniformity in operation, investing in such segments is beneficial as compared to single household customers, whose CLV is usually very small or is dependent on the economic condition and stability of the customer. Through estimations, it is analyzed that, about $200,000 will be required to invest in such sector in term of marketing’s and operation to develop the market attractive and awareness.

Positioning Strategy

The company will position itself as the customer centric and cost effective business in the market. It is due to the fact, that since Vanguard and other market players are already offering the similar services at high rates or premium pricing, the company will differentiate itself from the competitors by offering value for money and total transparency. In doing so, the company will adopt open communication strategy and informal platform, that will allow the client to understand the business services.

Moreover a definite customer value and experience strategy will also be established to create value for customer through extended customer service. Thus, it may include immediate call to Action options, 24 hours services and detailed analysis of the portfolio. This may differentiate Goldman Sachs from other players, since the big giant offers more valuable services under premium cover. The Particular strategy will be effective and well-maintained due to the fact that since small business have limited resources and an urge to invest in the aggressive markets, the offering of such service at such leadership will allow the company to develop long term relations with the SMEs and will also allow it to align its objectives with the business stance of the clients.

Marketing Mix

Product

The organization will offer common assets, multifaceted investments and currency showcase securities to the SME at higher loan fees as compared to other competitors. This will make a solid Competitive edge and incentive for the organization, since different players will offer intrigue returns somewhat lower than Goldman Sachs. Likewise, the organization will offer expanded client administrations and after sale benefit through point by point development. This will make elusive incentive for the organization and will distinguish the organization from alternate players.

Place

The organization will offer the service in the New York City alongside other driving states of USA. Also, the organization will offer the administrations in European Regions which incorporate Germany, UK and Spain. Such restricted markets are chosen to test the reaction and afterward build up the required long haul procedure. While trying to offer the services, the organization will open up little service stores in every one of the districts, not at the same time, but rather step by step, under the time of 4 years. Nonetheless, the principle workplaces in New York and Germany will be set up all the while, to cater and measure the reaction from the two markets.

Price

The organization will seek after the cost leadership technique. In doing as such, the costs will be kept 20% lower than the superior pricings set by the immediate contenders. Despite the fact that this will stay with the net revenue bring down for over 3 years, notwithstanding, it will develop later on, seeking after the economies of scale technique. Furthermore, after the inception of the main level, the organization will set up two all the more valuing levels, one with 30% decreased rates and one with 10% diminished rates when contrasted with the competitors. Such estimating methodology will be produced to cater distinctive kinds of players among the SMEs, in this way holding the clients firmly, prompting high standard for retention.

Promotion

Under the promotional technique, the organization will basically focus on the underlying clients through PR methodology and public expos. In doing as such, the organization will use the association with industry players and will build up an esteem chain through it. However, apart from the traditional marketing techniques, the focus will be on the digital platforms such as smartphones and websites to generate brand awareness. In addition, Social brand association and inclusion with the end clients will be established through social media channels such as Facebook, twitter.

Implementation Schedule and Financials

Action plan

Short-term plan (0 to 1 year)

During the initial period, the organization will recognize the key market players that are working in the New York City. In doing as such, the underlying five organizations will be focused to create relationship and the trail of two months will be offered for free, to make comprehension and association with the end customer. Such procedure will be sought by marketing and sales managers. The monthly focus of 4-7 organizations will be set to make the consultancy relationship. The additional sales will be employed to focus on the organizations which will acquire the extra cost of $100,000, every year.

Long-term plan (1- 5 years)

Under the long term strategy, the company will locate and research in the supplementary markets, such will require the company to invest additional financial resources in research and development, to gauge the market findings. In the same period, company will expand into Germany and California, depending on the market opportunity and availability of the growth precursors.

Financial Projections

The financial projection are based on certain assumptions to have a closer look over the financial feasibility and stability in forthcoming years. By undertaking the analysis, the company would most likely reducing its business risk.

Assumptions of financial forecasting

There are number of assumptions and factors which are taken into account for the purpose of predicting the future. Assumptions are listed below;

  1. It is being assumed that the financial projection such as depreciation are accurate, constant and realistic over the period of time. Also, it is assumed that the revenues and expenses would be growing at the rate of the prior year sales and revenue. Moreover, the rates are assumed on the basis of the actual amount being provided in the income statement for the fiscal year 2017.

Contingency Plan

Monitoring and Control

The viability of the marketing plan will be measured through bench marking it with the developed goals. In doing as such, the month to month deals will bench marked alongside the expanded client acquisition. Likewise the cost-Revenues relations will bench marked. This will permit Goldman Sachs to check the execution of the marketing and methodologies, and will likewise enable the organization to analyze the escape loopholes present in the existing techniques.

Anticipated Competitive Response

Since Goldman Sachs will cater the market through cost effective strategy that will undermine the current players' benefit scale. It is assessed that huge players, for example, Vanguard and Black rock may build up a comparable methodology to provide food the SMES in the long haul. In doing as such, the players may not straightforwardly build up the direct technique, but rather it is foreseen that it might procure some other backup Plan. Busch will make solid market rivalry for Goldman Sachs from the two sides, and may be required to grow additionally cost cutting and process advancement procedures.

Risk Analysis and Contingency Planning

Following Assumptions are made:

  1. The markets will remain same.
  2. The growth rate and GDP will remain same.
  3. The market conditions will remain same.
  4. The new companies will grow at a constant rate.

Conclusion

By examining the general circumstance and position of Goldman Sachs in the market, it has been concluded that Goldman Sachs has a solid market position and can use its aptitude and abilities in accomplishing economical upper hand by focusing on the SMEs. Furthermore, it has likewise been found that since business sectors may wind up forceful soon, the organization ought to ceaselessly advance through fusing innovation and development. This may permit Goldman Sachs to persistently oversee is incentive and situating in the market.

Also, since any players are as of now working in the market and may secure the competitive advantage, it has been suggested, that the organization should center towards Fin tech and advancement. In doing as such, procedures, for example, process development and item advancement, alongside inventory network and asset combination have been proposed to allow Goldman Sachs to keep up and support its Value proposition in the market.

In particular, since the Players may likewise build up a facility or wing to cater the market through cost effective model, keeping up client satisfaction is pivotal, for which the advanced techniques, social media and digital strategy has been proposed to enable the organization to make a solid brand equity with the clients, keeping up the standard for dependability and thus utilizing it to enhance the market share.

Finally, it has been concluded, that so as to make solid brand awareness and brand value the organization should fuse digital strategy and should use it to make solid communication intuitive association with the end clients. This will help in building up a solid position and client dependability and maintenance in the long haul. Prompting compelling cost controls and support...................

 

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