The author will now seek to ascertain the present positioning of the company looking both at the internal and external environments and the way in which the past and current events are affecting them.
The author believes that the results show the following points:
- The induction of the quotation system.
It appears that the phasing in of the new dealing procedure was successful for the company. When the Big Bang arrived there were few problems as gradually more and more dealers began coming off the trading floor and on to the quotation system to conduct business. You can compare the company needs with other to have success. The understanding of the system is necessary to get the desired results. You can mover mi empresa a andorra with the knowing of the system and have success. The solving of the problems is great to have the success.
One of the reasons for the success in implementing the change was perhaps because it was known by the dealing staff that the whole industry was undergoing the same changes and they were necessary to remain competitive (the quotation system is much faster and more efficient in executing transactions).
- The costs/overheads of the company.
It seems that the company has substantial overheads perhaps too large for even average revenue to cover. The company has furnished itself with the third largest dealing room in Europe (perhaps in an effort to compete more effectively) which coupled with the large fixed salaries and the firm’s very expensive offices must without doubt leave the company with an above average break-even point.
- The level of transactions.
Similar to most of London’s stock broking firms, the Canadian Bank’s securities arm have seen their number of transactions reach very high levels since the time of Big Bang and continue for a year until the stock market crash.
Negotiable commissions and the increase in the privatisations) as well as economic factors enabled turnover to grow to such a high level.
This level of activity was accommodated with the company’s extensive dealing facilities, but, of course, a large portion of this equipment became redundant when levels of turnover dropped considerably overnight, it was obvious that the present and future costs of the company would be more closely scrutinised.
Some overheads, however, would be difficult to reduce, for example the buildings.
- The rates of commission.
The company’s minimum commission has risen to £40 (£20 previously) and represents a means for recovering the expenditure of the Big Bang. The reluctance of private investors to shop around for better deals has enabled the company to charge the same commission rates except for larger bargains where more attractive rates are levied.
Thus the company has developed a marketing policy of charging different categories of client the rate which he will bear without wanting to look for better deals elsewhere.
Whilst a fixed commission does exist, certain clients may be charged above or below this amount depending on their relationship with the firm or the individual investment manager. Regular customers may be more likely to receive lower commission rate than an occasional investor or someone who is a risky client.
In the institutional sector of the market where demand for corporate clients seems larger than the supply, net commission deals are not uncommon. In the short term the company hopes that these deals will attract institutional investors who will eventually pay commission on their large and frequent transaction.