CASE ANALYSIS: EDWARD JONES

Case Analysis: Edward Jones

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Re: Edward Jones Strategic Issues and Recommendations

Edward Jones is one of the largest financial services providers, who has due to its unique approach have grown from a small town organization to one of the largest. With the changing world, the demand of businesses and customers are also changing in every sector, even in the financial services. The company pose some serious threats among them new entrants and rival firms are of major concern, as this industry is largely reliant on the unique approach which Edward Jones have in terms of offering its services to small business owners and individuals. It is recommended in this study after the analysis of environment that the company should now shift its focus more on online business, as this medium has the potential which can aid in the rapid growth of the company.

Introduction

The financial services industry was built on the foundation of high risk and higher return. The concept of personal investment has long excluded the everyman because of the enormous wealth and risk it requires. Edward Jones built its competitive advantage on the premise of offering financial services that could provide for the needs of the middle class. Edward Jones offers a wide range of financial services - savings, stocks, bonds, and financial planning services -- that are aimed at individual investors who are risk averse and money conscious. The company generates huge profits by helping people make long-term investment decisions to promote financial stability and achieve modest, risk-regulated returns. Discovering a niche for the money conscious has served Edward Jones well: they now have more than seven million clients and 10,000 offices spanning two continents. Hoover's remarked on the rapid expansion of Edward Jones, saying “Other financial firms may try to expand their presence, but it's going to be difficult to keep up with the Joneses.” (Edward Jones, 2010)

Competition Edward Jones faces three main competitors in today's market: Charles Schwab, Raymond James & Associates, and Wachovia Securities (Hoover's). Edward Jones operates primarily as a brokerage, but like its competitors also offers a host of financial packages to satisfy its consumer base. According to Hoover's, Charles Schwab offers “private banking, bond trading, annuities, and proprietary Schwab and Laudus mutual funds, as well as mortgages, CDs, and other banking products through its Charles Schwab Bank.” Charles Schwab is similar to Edward Jones in that it offers many of the same services and prides itself on offering valuable brokerage services for a price which appeals to a new generation of price conscious consumers. Charles Schwab has approximately eight million clients and approximately 300 US offices, suggesting that most of its services are Internet-based. This is in stark contrast to Edward Jones' 10,000 branches scattered through suburban communities in the US, Canada, and the UK which offer more face-to-face time. Raymond James & Associates offers “brokerage, financial planning, and related services to consumers. It performs trade execution, securities processing, equity research, and investment banking services for institutional clients ...