Comprehensive Business Strategy Analysis of Goldman Sachs Group

This essay provides a comprehensive analysis of The Goldman Sachs Group's business strategy. It begins with an overview of the company, its services, and its market position within the financial services sector. The essay explores Goldman Sachs' unique selling proposition, segmentation, and positioning strategies, highlighting its strengths such as a strong brand name and global presence, while also acknowledging weaknesses like legal issues and controversies. The analysis delves into external factors affecting the company, including political, economic, technological, and legal influences, and examines its competitive landscape, including key competitors and the bargaining power of customers and suppliers. The essay also discusses Goldman Sachs' corporate social responsibility initiatives, ethical conduct, and commitment to innovation, including recent advancements like the Apple credit card and environmental policies. The conclusion summarizes the company's successful trajectory, its ability to adapt to market challenges, and its ongoing commitment to innovation and customer service.

BUSINESS STRATEGY

Table of Contents
ESSAY.............................................................................................................................................3
REFERENCES................................................................................................................................8

ESSAY
The Goldman Sachs Group is an investment bank and financial services American
multinational which is headquartered in New York. There are a number of services provided by
company which include asset management, investment management, prime brokerage, securities
underwriting and a number of other financial services (Sachs, 2018). The company was founded
in 1869. In may 2020 the company was also ranked on 62nd position in Fortune 500 list of largest
corporations in United States by its revenue.
The company falls under financial services sector providing different financial services
to people as well as other corporations (Keenan, 2016). They include a number of different firms
such as banks, investment houses, financial companies, real estate brokers, insurance companies,
lenders etc. It is an important industry which is leading in terms of market capitalization and
earnings. Goldman Sachs is one of the successful company in financial service sector. The
company receives millions of applications for mid level jobs every year out of which only 5000
candidates are selected. The company also recently generated profits worth $2.42 billion which
was its biggest earning in nearly a decade. Goldman has successfully set up itself as a bank that
is one of the largest lenders in U.S.
The parent company is called as The Goldman Sachs group, Inc. it mainly deals in
investment services and falls under banking and financial services. The tag line of company is
that client's interest always comes first. The unique selling price of company is that it is a full-
service global investment banking as well as securities firm. the positioning of company is done
very wisely which helps in providing company with a number of benefits and attracting its
customers. They segment market and the segmentation is done on the basis of needs of their
consumers. They majorly focus on the individuals who are looking for financial advice or help.
Their major target are various large enterprises as well as rich individual investors. Along with
these they have successfully set up themselves as an institution that is giving its major priority to
customers. In this way they are positioning their company in market in order to attract the
targeted customers.
Along with time Goldman Sachs have successfully set up as a strong brand that have a
number of strengths including a strong brand name and really good financial position. The
company have set up their institutions in a number of countries and successfully running in those
countries. Advanced technology, research & development and its global presence is also setting

up major goals for company. It is difficult for competitors of company to follow its model.
However, there are also a number of weaknesses attached to company. As there are a number of
legal issues that are faced by company on a regular basis (Gupta and Simonds, 2017). There are a
number of controversies attached to Goldman Sachs which are found in underwriting bonds,
insider trading and European debt crisis. Other than this frequent cases of bribery and fraud are
becoming weakness for company. There are a number of emerging economies posing expansion
opportunities for Goldman Sachs. They can also effectively provide diversified portfolios to
customers. Investment banking is growing and it has created various opportunities for company
as well. However, company have to face variable interest rates, declining stock market and
changing rules of government due to recession and other financial crisis as threats.
There are a number of different external factors that are highly affecting functions and
operations in Goldman Sachs. The company have to focus on a number of political factors such
as proper framework which is needed to be revised for European Union. Fluctuations in market
that have been a result from post Trump's election also had to be managed by company. Due to
changes in various economic factors such as GDP growth in United States, increase in Fed
reserves by federal funds, fluctuation in economic market etc. posed a need to change strategies
in company. The company also needed to study the investing patterns of its clients. In order to
cope up with the increasing technological advancement Goldman Sachs came up with Marcus
which was an online lending platform for organisation. There were a number of legal factors that
led to change in companies policies such as the tax reforms that were brought by Trump and
various changes in different investment regulations. The natural changes, specifically disasters
that are natural have great impact on company as well. An effect of Hurricane devastation was
seen which led the firm to cut its 3rd quarter's GDP (Hoffman, 2017). In this way a number of
times external environment of company led to many changes in functioning of organisation.
It is necessary to study various factors of company which are helping in providing
competitive benefit. There are five factors that are considered in order to understand competitive
analysis of Goldman Sachs. It is necessary to critically analyse the Degree of competition in
market. The major opponents of Goldman Sachs are JP Morgan, Deutsche Bank, Morgan Stanley
and so on. It is necessary for organisation to provide service differentiation in order to do better
than their competitors. It is necessary that company is focusing on its brand name and effectively
enhancing it. When considering Bargaining power of customers the company have power to

effectively subsist the loss of various customers due to which the bargaining power with
customers is not much. Goldman Sachs can easily manage this risk by providing extra services as
well as advantages to various accounts. When there are less number of suppliers present for an
organisation due to this the amount of bargaining power with supplier increases. Most of the
suppliers of company consists of various institutional customers, conventional suppliers and
banks that are providing investments. There are a number of such suppliers who are regulating
prices for Goldman Sachs . It is important for Goldman Sachs to manage their suppliers. Threat
from new entrants for banks like Goldman Sachs is very low. There are a number of small banks
who cannot invest as Goldman and they also cannot authorise the commercial movements as
Goldman have successfully developed. This explains that threat from new entrants does not exist
unless the organisation is going for mergers. When considering Threats from substitutes
Goldman and Sachs have contest from various peer to peer investors and some settings of mass
fund. The security and exchange commission have also restricted any competitor for Goldman
Sachs to bid which gives it an advantage over its substitutes.
In order to survive in society it is required by every organisation to give back to the
society. There are a number of philanthropic activities which are carried out by organisation in
order to survive in society and fulfil its duty towards them. Since 2008 Goldman Sachs have
successfully used more than $1.6 billion in its philanthropic activities. The environmental and
social performance of company is also mentioned in its annual report which is the Global
Reporting Initiative and describes Corporate Social Responsibility of company (Tella, Liberti
and McAra, 2017). There are various other initiatives taken by organisation such as Donor
Advised Fund (DAF) which is also known as Goldman Sachs Gives that is donating to various
charitable organisations along with a match of employee donations which is up to $20000.
Goldman Sachs have been effectively donating towards eduction as well, Goldman have
collaborated and donated around $ 10 million in order to build a 45000 sq. foot campus which
will facilitate 1000 students. Noble causes have been defining Goldman Sachs from a long
period of time. Goldman Sachs also helped people of Israel as they took new initiative in Israel
to help people fight hunger. Under this they were working in partnership with Leket Farm where
they are growing and harvesting their own fields in order to serve 60000 people in Israel. There
were more than 30000 volunteers from Goldman Sachs who came forward to harvest 7.7 million
pounds of vegetables which were then used t serve people.

In order to successfully run business and build trust company is effectively using a code
of business conduct and ethics. This code of Goldman Sachs ensures that the work in company
is done as per highest ethical standards complying by all laws, rules and regulations that will be
applicable on everyone including the employees as well as board of directors of company. They
take serious measures to make sure that all the employees in organisation are complying by these
laws. It is also necessary for them to report if any violation of these rules are taking place with in
the organisation. There are a number of disciplinary and preventive actions taken which will
critically address to any existing or upcoming violation. There are also a number of criminal or
civil penalties for these violation of laws in the court of law. There are a number of laws and
rules in Goldman Sachs that are related to insider trading, bribery, corruption, fraud and so on. A
detailed description of all these is effectively provided in the Compendium drafted by Goldman
Sachs.
There are a number or behaviours that promotes Ethics in the organisation. They try to
effectively promote teamwork in every field and encourage employees to bring in creativity.
They make sure that all the client information is kept confidential in order to manage client
relationships (Byrnes, 2017). The company is trying to preserve its size as they consider it to be
one of the greatest asset for company. The competition in market is taken in a healthy way by
Goldman Sachs as they are expanding their client relationships aggressively. Along with these
Goldman Sachs considers honesty as well as integrity to be heart of their business and they
maintain high ethical standards personally as well as professionally.
Innovation have always worked as a core function for Goldman Sachs. The company
have effectively realised that in order to set up a sustainable business it is necessary for company
to bring in regular innovation and creativity in market. There are a number of innovations
brought by company starting from time when it created the first Price to earning ratio. Apart
from this there are a number of other innovation done by company over a period of time.
Investment banking was also introduced by Goldman Sachs. They brought a number of other
technological advancement in business including the reinvention of modern IPO. Robert
Litterman and Fischer Black came up with Black- Litterman model of global asset allocation
model which helped in optimal portfolio allocation. In order to effectively fulfil their part in
bringing creativity they are also investing huge funds even more than $100 million for deserving
entrepreneurs and various emerging business leaders. They accept all the new ideas that are

brought and thorough research is conducted on all of those ideas to understand what are the
further development that can be made on them (Cole and et. al., 2018). In 2019 they launched a
Credit Card in partnership with Apple which brought in transparency and privacy to the
consumers. The firm have also established frameworks to promote sustainable economic growth.
In this along with various services they are also establishing Environmental Policy Framework
which deals with climatic changes and various other critical environmental challenges. There is a
long list of innovations by Goldman Sachs that have allowed business to deal with competition
and sustain in market fulfilling the requirements of their customers.
It can be concluded that over the period of time Goldman Sachs have set up itself as a
successful business providing financial services in a number of countries. Organisation have set
up huge investments which allows them to be market leader and expand their customer base
continuously. Goldman is effectively assisting market to remain liquid and also effectively bring
in innovations to deal with problems that are arising on its way. Goldman Sachs is continuously
increasing its shares and bringing in best practices to effectively deal with various market
situations. With the help of its CSR activities company have gained sustainability in financial
industry. They are showing various big impacts that financial firms can bring in the world.

REFERENCES
Books and Journals
Sachs, G., 2018. Goldman Sachs. Retrieved from: Milennials Coming of Age: http://www.
goldmansachs. com/our-thinking/pages/millennials.
Keenan, J.M., 2016. From sustainability to adaptation: Goldman Sachs’ corporate real estate
strategy. Building Research & Information, 44(4), pp.407-422.
Gupta, S. and Simonds, S., 2017. Goldman Sachs' Digital Journey.
Hoffman, R., 2017. Goldman Sachs Update Video Tonight.
Byrnes, N., 2017. As Goldman embraces automation, even the masters of the universe are
threatened. Retrieved February, 27, p.2017.
Cole, S. and et. al., 2018. Goldman Sachs: Making an Imprint in Impact Investing.
Di Tella, R., Liberti, J. and McAra, S., 2017. Media Markets Down South: Goldman Sachs'
Investment in Grupo Clarín.