Strategic Management

e-trade_case_hwmaket_exemple.docx

Home >Business & Finance homework help >Management homework help >Strategic Management

Mariyam Khan Case #1: E*Trade August 30, 2011

Mitch Caplan, the CEO of E*Trade turned the company around from near bankruptcy through a few simple changes. He reduced costs by getting rid of businesses that did not follow the company’s primary objectives. He cut advertising costs and laid off a thousand workers. Also he moved the company’s headquarters from California to New York. Doing so, he created a more professional and disciplined atmosphere. He differentiated the company by providing brokers loans and checking accounts. Unfortunately, after Mitch brought the company back from the dead, he soon ended up back where he started. The company invested in mortgage based securities and when the housing market crashed the company deteriorated as well.

The case of E*Trade relates to the chapter because it is a great example of external view leadership. The external forces, the market crash, primarily led to the disastrous outcome of the organization. As a result, Mitch Caplan had limited influence over his company’s outcome however I believe he as well as others should have foreseen the market crash by thoroughly understanding the situation. Therefore I feel romantic view leadership can also be applicable in E*Trade’s predicament. Later on in the chapter, it explains ways a company can gain a competitive advantage which could be applied to E*Trade. I think if the company had done proper analysis before investing in housing securities, it would have made better informed decisions and actions that may have sustained the company’s status quo.