Vanguard Swot AnalysisEssay Preview: Vanguard Swot AnalysisReport this essayThis case looked at the operations of the Vanguard Group, the mutual fund industries growth leader. Unlike some of its competitors, Vanguard has been able to attract and retain clients without an extensive marketing campaign. Recently there has been discussion about implementing a more direct sales marketing campaign. However, given their extremely low expense ratios and their ability to consistently outperform the industry, there are some concerns over the financial issues that would accompany a large marketing effort. Instead, International expansion combined with focused U.S. market advertising, may be a more profitable path to take.
StrengthsMutual fund industry growth leaderGrowing at 30% per yearLowest average expense ratio74% of funds earned above average returns (2001)Added 800k shareholders accounts (2001)Spent $.20 of every $10,000 invested to drum up new businessVery low employee turnoverEffectively utilize dashboards to interrogate and integrate real time metrics into staff meetingsAbility to retain customers and obtain additional investmentsWeaknesses$50 billion in assets leave Vanguard every yearNet cash flow decreased from 46 to 40 billion from 2001 to 2002Redemption rates rose 2% (2000)Marketing research measures were qualitative and not quantitativeMost brokerage firms do not recommend Vanguard funds to their clients to do lack of sales commissionsOpportunitiesAppeal to clients by emphasizing “speed, low expense ratio”Pick up 1/3 of
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