Can You Say What Your Strategy Is?
and train them, at great expense. Until 2007, when it switched to an internet-based service, the firm had to have its own satellite network to provide its widely dispersed offices with real-time quotes and allow them to execute trades. Because the company has 10,000 separate offices, its real estate and communication costs are about 50% higher than the industry average. However, all those offices allow the financial advisers who run them to deliver convenient, trusted, personal service and advice. Other successful players in this industry also have distinctive value propositions
personable, nonthreatening environment— Jones puts its offices in strip malls and the retail districts of rural areas and suburbs rather than high-rise buildings in the central business districts of big cities. These choices alone require Jones to differ radically from other brokerages in the configuration of its activities. With no branch-office management providing direction or support, each financial adviser must be an entrepreneur who delights in running his or her own operation. Since such people are an exception in the industry, Jones has to bring all its own financial advis- ers in from other industries or backgrounds
Edward Jones’s Activity-SystemMap This map illustrates how activities at the brokerage Edward Jones connect to deliver competitive advantage. The firm’s customer value proposi- tion appears near the center of the map—in the “customer relationship” bubble—and the supporting activities hang off it. Only the major connections are shown.
TARGET CUSTOMER
HEADQUARTERS St. Louis home office for all activities
individual conservative
TECHNOLOGY satellite (historically)
delegates decisions
REGIONAL STRUCTURE no regional management
LOCATION rural
PRODUCT blue chips mutual funds
suburban strip mall
COMPENSATION each financial adviser is a profit center
PRICE one-time commission
CUSTOMER RELATIONSHIP face-to-face convenient trusted financial adviser
ONE FINANCIAL ADVISER PER OFFICE advisers run their own offices
BRANCH SUPPORT branch-office assistant
MARKETING local mailings knocking on doors
VALUES & CULTURE volunteerism mentoring
OWNERSHIP partnership, not public
INVESTMENT PHILOSOPHY long-term buy and hold
BROKER TYPE entrepreneur
HIRE & TRAIN hire from outside industry internally train all financial advisers
member of community
harvard business review • april 2008
page 6
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