Vanguard Case Analysis
After reading through the Vanguard case, there were a few difficult
forks in the road that Vanguard seems to be facing. The company’s
future can be greatly affected by some of these difficult choices.
Vanguard has to decide whether to change their investment offerings,
further develop Internationally, or to simply advertise to increase
their client base. Top managers at Vanguard have to step up to the
plate and rollout detailed plans as to what path the company should
take regarding some of these issues. Through our in-class
discussions, the majority of the students argued on one major problem
that Vanguard was facing. The problem entailed Vanguards ability to
increase future customers without increasing costs.
Markets are ever-changing, and the ability of companies to adapt to
these changes is the key to survival. One company mentioned
specifically in the case was Citigroup. Their ability to adapt to
market changes and become a giant in the investments segment as a
“one-stop financial supermarket” is a prime example. Should Vanguard
take on this type of adaptation or stick to their current business
objectives? One interesting quote Brennan in the case stated “In the
future, nothing about Vanguard’s values will change,” but “everything
about the way we do business must change.” With this in mind, the
question is what must change for Vanguard to succeed and continue to
earn revenue and gain customers without increasing costs?
Though it is not a big part of Vanguard’s revenues, the International
markets do provide many opportunities. As mentioned in the case,
Vanguard Australia managed more than $10 billion in 2002. This is not
pocket change! There is money there and further International
concentration would generate further revenues for Vanguard. Although
it is not a key focus for Vanguard now, they should continue to
attract customers in the International market.
Another issue facing Vanguard is simply marketing strategy. Their
current strategy involves product-specific printed advertising. They
have to increase awareness of their products. I myself have heard of
Vanguard, but had no idea what their product offerings were and what
they were all about prior to reading this case. I cannot recall ever
seeing a commercial on television advertising Vanguard. They should
reach out to young investors like myself because that is what their
core business strategy is all about. They are seeking long-term
investors, which lies with people in their early-mid 20’s who are in
the first few years of their careers and just...