Beginning

1
Beginning

• Est. in 1935 as a result of the Glass Steagall
  Act
• Started by Henry Morgan Harold Stanley
• Within first 5 years achieved 24 market share of
  public stock offerings
• Established a strong Institutional Securities
  Division.
• 1941 MS given a spot on the NYSE

2
Leading the Way

• Created the first computer model for financial
  analysis and forecasting (1964)
• Expands into growing European Market (1967)
• Formed the first Mergers and Acquisitions
  department on Wall Street (1970)
• Replaces partnership with Corporate Structure
  (1975)
• Pioneers automated trade processing in the
  securities industry (1980)

3
Recent Accomplishments

• MS and Dean Witter/Discover Card Merge (1997)
• Acquires Graystone Partners focus on High Net
  Worth Clients (1999)
• Acquires Ansett Worldwide Aviation (2000)
• Sells 6 billion in Global Bonds (2001)
• Handles 4.1 billion IPO (Agere Systems 2001)
• 16 million raised by MS victims relief fund to
  aid families of 9/11 (2001)
• Co-Managed the Google IPO (2004)

4
Organization

• Institutional Securities (54 of the Company)
• Investment Banking
• Mergers and Acquisitions
• Announced on 190 deals valued at 354 billion
• Individual Investor Group (19 of the Company)
• Private Wealth Management
• Performance Reporting
• Manage602 Billion in Assets

5
Organization (cont)

• Credit Services (15 of the Company)
• Discover Card (Dean Witter creation)
• 46.2 million account holders
• Cash Back Bonus award (1st credit card to offer)
• Investment Management (12 of the Company)
• Invest heavily in foreign bond market
• Strong holdings in foreign real estate
• Advise/Manage several foreign governments holdings

6
Management Structure (Vertical)

• Board of Directors
• Senior Management Team
• CEO, CFO, COO, CCO
• Managing Directors
• Throughout All Divisions
• Executive Directors
• Throughout All Divisions

7
Strategic Condition

• Client Services division
• Supporting Individual Advisory Services division
  and PWM (Private Wealth Management)
• Client Services comprised of
• Special Products, Retirement Services, and 529
  Plans
• National New Accounts
• Call Centers, Client Intervention Unit
• Client Reporting Services

8
Client One Initiative

• Platinum Call Center
• National New Accounts
• Consolidated Tax Package

9
Mission Statement

• To be our clients first choice by helping them
  realize their financial dreams and putting their
  interests first one client at a time

10
Business Level Strategy

• Based upon core values Characteristics of the
  Morgan Stanley philosophy.
• Respect, Culture and People

11
Resources and Capabilities

• Intangible assets
• Strong Brand recognition the firm holds.
• Tangible benefits
• Performance Reporting, Gain and Loss Statements,
  Consolidated Tax Package, etc..

12
Porters 5 Forces
Competition (High)
Suppliers (Medium)
Buyers (Low)
Rivalry (High)
Substitutes (Low)
13
Buyers

• Investment Banking Industry
• Mergers and Acquisitions
• IPOs
• Private Wealth Management
• Wealthy individuals worth at least 5M
• Advisory business

14
Barriers to Entry

• Capital
• Reputation and Experience
• Ability to provide wide range of products
• Regulations
• Industry expertise

15
Competitors

• Citigroup
• Bear Stearns
• Charles Schwab
• CSFB
• JPMorgan Chase
• Lehman Brothers
• UBS
• Merrill Lynch
• Goldman Sachs

16
Substitutes

• Discount Brokers
• Local Firms
• Mutual Funds
• Banks

17
Suppliers

• Stock Exchanges
• Regulatory Agencies
• External Money Managers
• Hedge Funds

18
Macro Environment

Social/ Demographic
Political Government/Legal Issues
Economic
Technological
19

• Political Influences
• Government and Legal Issues

• Investment Banking Firms are subject to stringent
  regulation
• 10 firms fined 1.4 billion by SEC
• Morgan Stanley was hit with 19 million dollar
  lawsuit citing failure to deliver customer
  prospectuses and other supervisory and
  operational failures
• Other firms in industry fined
• Citigroup Salomon Smith Barney
• Credit Suisse Groups CSFB
• Merrill Lynch Co.
• Goldman Sachs Group
• Regulations
• SEC
• PCOAB

• The tightening of standards has helped regain
  consumer confidence

20
Economic Influences

• Investment activities are driven by the strength
  of consumer confidence and by the strength of
  global share prices
• Inflation Rates
• GDP Rates
• Oil Prices
• Geopolitical uncertainties
• Exchange Rates

21
Social/Demographic Changes

• Education
• Demographic
• Baby Boom
• Asia Pacific region

Technological

• Internet
• 24/7 access
• Increase in on-line, self directed investing

22
Key Strategic Issues

• Broad Segment Focus
• Differentiation
• Company Image
• Online Investing Brokerage
• Growth of International Companies

23
Recommendation StrategyBroad Segment Focus

• Sell Retail Divisions
• Risk
• Replacing Revenues
• Lack of Diversification

24
Recommendation StrategyDifferentiation

• Conjoint Analysis
• Differentiation Strategy
• Technology
• Services
• Risk
• Cost
• Flexibility to Market Changes

25
Recommendation StrategyCompany Image

• Quality Signaling
• Advertising
• Capitalize on Brand