Strategic Management in Goldman Sachs

This report explores the importance of strategic management in Goldman Sachs and its impact on the investment banking industry. It provides an overview of the company's profile, industry structure, market position, and a comparison with its closest competitor. The report also discusses the macro environmental factors affecting the industry and the role of technology in shaping the industry. References for further reading are provided.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................3
Main body........................................................................................................................................3
Goldman Sachs profile...........................................................................................................3
Comparison between closest competition in the industry......................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
Books and Journals...............................................................................................................10

INTRODUCTION
Strategic management is one of the important aspects for a company which helps in
framing long term and short term plans. It involves setting of goals and objectives with the help
of scanning internal and external environment of operating market. It is management of all the
necessary needs of an organisation for meeting its organisational goals and objectives. It is the
on-going process of planning, analysing, monitoring and evaluating of changes in a business. It
occurs due to dynamic and uncertain nature of business environment of a company. It helps in
bridging the gap between present and future situation with the help of planning and framing
strategic goals. It is consist of development of strategic vision and mission, setting objectives,
formulating and implementing of various strategies (Hajili, 2019). This involves consistent
monitoring and controlling of various activities with the introduction of corrective or disciplined
measures. It is done to avoid deviations in strategic planning and its implementation to reach
organisation's strategic intent. Goldman Sachs is an American multinational brand in investment
bank and financial services sector. It is headquartered in New York city which offers services in
portfolio management, securities underwriting and prime brokerage etc. This report includes
development of company profile with industry structure, market position and market size etc.
Main body
Goldman Sachs profile
Company Background

Company deals in investment and banking industry operating across the world in many
countries. It includes financial advisory and security undertaking activities such as mergers and
acquisitions, restructuring and spin-offs advisory with capital raises, public offerings and private
placements with equity and debt instruments. The company manages wealth and portfolios of
customers with leading position in the market globally. It has divided into four primary segments
such as investment banking, asset management, global markets and wealth management. This
helps company in engaging with customers with serving different needs in investment and
lending business. It is benefited with high returns on its investing efforts. It lends money to
corporate clients and offers secured loans to its wealthy individuals (Hassani, Huang and Silva,
2018).
 Vision- Vision statement describes long term position and future viewpoint which helps
in achieving and directing goals in a company. Goldman Sachs vision statement states
that “establishment of investment and financial freedom for all.” It is consist of providing
maximum attention to every customer with the help of understanding financial needs of
customers by the experts. Also, the company indulges in growth strategies with
approaching customers or institutions for increasing market share.
 Mission- Mission statement of a company states what kind of business it is into and why
they are into it. It is consists of company's business areas and objectives which helps in
determining company's purposes, goals and values. Goldman Sachs mission statement
states that “to commit people, capital and ideas to help our clients, shareholders and the
communities we serve to grow.” This reflects company focus on improving lives by
increasing their standard of living. It is done with the help of bringing ideas and capital
together to meet diverse needs of customers.
 Core values- These are the values which company undertakes for understanding and
leading operations in a business. Company is comprised with teamwork, integrity,
customer centric, innovation and excellence as its core values. These help in building
corporate culture and shaping behaviours of employees and experts. Also, it helps in
delivering standardised financial services in company.
Industry structure
Investment banking is one of the major segments of financial service sector which deals
in investment management and in money lending services. The industry is well structured with

various roles and responsibilities available to serve customers with satisfaction. It provides
diverse range of services such as merger and acquisition, sales and trading of securities,
underwriting of stocks and channelizing finance activities etc. This requires various professional
skills which are required to analyse financial transactions and provide investment advisory.
These are consists of business modelling, business valuations, financial analysis, relationship
management and negotiation skills. The sector engages in different markets to serve customer
needs and wants for increasing returns in the market. These markets are as following:
 Bulge bracket- In this all the largest investment banks are included in the bracket. It is
consists of large corporations, institutions and governments as their major clients. Bulge
bracket investment banks indulge in both advisory or consulting and financing services. It
involves innovation and creativity for inventing new financial products with conducting
research activities for corporate clients. Goldman Sachs operates under bulge bracket
market with varied range of financial services and asset management.
 Middle market- These are banks which involves all the activities which a bulge bracket
offers to its big customers. It offers all financial services and consultancy to small
companies and customers. They serves middle income groups as their clients
 Boutique market- In this banks focuses on specific activities in which they specialise. It
involves one aspect of investment banking and offers specialise service to businesses and
customers. They may indulge in serving specific industry such as media and others
(Lasserre, 2017).
Market Position-
The company is one of the leading brands for investment banking in worldwide. It has
top position in financial advisory and underwriting services with various successful and
meticulous mergers considering needs of all stakeholders. Company has prominent image in all
the developed and developing countries. It serves customers with high investment needs and
income including diverse group of financial institutions, corporates, government and individuals.
It deals in wealth management and research reports on leading companies which has high
influence on the functioning of stock market. It analyses market operations for various
institutions to satisfy their research and analysis needs for investing. It has a global leading
image for anticipating stock market positions and other market changes. It has developed
diversified operations in fixed income, currency and commodities with derivative transactions

and proprietary trading. It has a high uphold on merchant banking investments with principal
investments on funds exceeding certain threshold returns. It has received business and innovation
awards with listed in Forbes World’s most valuable brands and Asia’s prime brokerage for hedge
funds by the company (Skjølsvik, Pemer and Løwendahl, 2017). It has been recognised with
several honours in euro money awards for excellence as best investment bank and leadership in
different developed and emerging countries.
Country markets and size
Goldman Sachs is one of the largest public companies across world and has been serving
customers including government and financial institutions as prominent clients. Company has
big market share with serving customers in different financial areas such as wealth management,
underwriting securities, mutual funds, brokerage and financial research etc. It has a diverse group
of people inside the company leading to best practices and expert views on diverse financial
fields. It has also gender diversified employees which perform excellent in their expert areas
leading to innovation. Company has leading stake in banking or lending money to individuals
with secured and mortgage loans (Hajili, 2019). It has been facing various external threats
leading to industry macro environment. These are as following:
PEST Analysis
It is part of strategic management used for analysing and scanning macro environmental
factors. Following are the factors company undertakes in financial and investment industry:
 Political factors- This factor has high influence on the regulation and functioning of
businesses. It affects supply of money in the market and spending power of both
consumers and businesses. Company has good relations within home country due to its
financial acumen and brilliant employees. Industry gets severely affected due to changes
in interest rates, tax rates and other key changes by the government of different countries.
 Economic factors- It is one of the key factor which influences functioning of financial
market in a country. It involves inflation rate, growth rate and economic policies which
has high implications on the economy of a country. A fluctuation in inflation rates of an
economy leads to major implications on the investment sector of a country. It affects
functioning of business and power of consumers to spend in the market. There are
various inflation linked bonds which helps in combating situation issued by the
government to reduce inflation situation in a country.

 Socio-cultural factors- It has various influences on business which also vary from
country to country. This factor affects consumer behaviour majorly due to various
environmental and societal challenges industry faces. To meet these challenges company
invest in various opportunities which can have positive impact on communities and
societies from which company get business. It has been investing in various social and
environmental benefits transactions which help in driving business leading to overall
impact on returns. Company has developed framework for investing in socially active
market opportunities considering long term interest of shareholders. It has invested a
good amount in clean energy which has helped sector and emerging industries in
achieving economies of scale for becoming cost competitive in the market.
 Technological factors- It is one of the vital factor which has leads to globalization and
forming competitive advantage. Company has invested in sustainable usage of advance
technology in their operations. It has taken consideration for managing influence of
products on levels of energy consumption. Technology has impacted finance industry by
transforming operations and functionality. It has developed industry in becoming fin-tech
which has been helping in gaining market insights in investments (Hassani, Huang and
Silva, 2018).
Comparison between closest competition in the industry
Morgan Stanley an American investment bank is close competitor of Goldman Sachs in
wealth management, investment management and other financial services. Following are the
areas which can help in differentiating their performance:
Bases Goldman Sachs Morgan Stanley
Innovation and
Strategic Innovation
Company prioritizes tech
innovation to build customer
centric engaging services. In this
new era of data driven businesses
where machine learning
algorithms has shifted the
processes and models of
Company understands the power of
technology which has transformed
banking industry and in coming
years. It has embraced data driven
artificial intelligence technologies.
It has made compulsory for every
other employee to learn coding

researching. It helps in developing
insights and analyses factors that
may impact investment areas and
their businesses (Skjølsvik, Pemer
and Løwendahl, 2017). Thus, it
has been continuously upgrading
its services to fin-tech as a
strategic innovation. It has driven
change in banking sector with
transforming institutional
structures in serving customers,
risk management and speed etc.
with acknowledging its needs in
21st century. This has helped
company in building strategic plan
for innovation and bringing change
in industry. It leads to better
analysis and in depth insights of
market with AI driven financial
models. It leads to better decision
making for investments and
understanding patterns of market
fluctuations.
CSR Company has been an active
participant in serving or giving
back to society. It has invested
funds for developing core needs
and interest of communities. Also,
by focusing on the long term
interest of shareholders.
Morgan Stanley and its parent
company or group JP Morgan has
been an active socialist. They have
invested large amounts for the
welfare and development of people
in various countries.
Governance and
Ethics
Company runs on core values and
standards to establish trust and
confidence of its customers. It
follows high ethical values in
serving interest of overall
economy and people. It
undertakes best practices which
have helped in gaining prominent
merchant banker across the world.
Company has high ethical values
which is important in gaining trust
in the investment sector. It has
worldwide standards for
maintaining integrity of their
processes. It functions on its core
values as top financial institute for
serving its high income clients and
other institutions.

CONCLUSION
From the above report it can be concluded that Goldman Sachs has been incorporating
strategic changes which has great impact across the industry. Industry is facing various key
issues globally for the development of industry. Fin-Tech products and its implementation has
revolutionised industry structure with AI and robotics. Thus, industry is going towards
digitalisation and highly dependent on automation processes. Company has leadership position
with serving customers in different countries and faces macro environmental factors. It has
served strategically both the interest of community and shareholders in investment industry and
gained trust in shaping economies. It has played a major role in financial industry with good
relations from stakeholders (Lasserre, 2017)
.

REFERENCES
Books and Journals
Hajili, R., 2019. Strategic alliance formation experience and its antecedents for the case of
investment banking industry.
Hassani, H., Huang, X. and Silva, E., 2018. Digitalisation and big data mining in banking. Big
Data and Cognitive Computing, 2(3), p.18.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Skjølsvik, T., Pemer, F. and Løwendahl, B.R., 2017. Strategic management of professional
service firms: Reviewing ABS journals and identifying key research themes. Journal of
Professions and Organization, 4(2), pp.203-239.
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