Goldman Sachs Group In A Nutshell Business Essay

Goldman Sachs is a global investment banking, securities and investments managements firm that provide financial services to a substantial and diversified client base, includes corporations, financial institutions, governments and high-net worth individuals.

Goldman Sachs was founded in 1869 by Marcus Goldman who was a German immigrant to the United State of America (USA). Mr Goldman started his business as a Major issue of short-term loan (Commercial paper) to entrepreneurs in the USA. Goldman Sachs joined the New York Stock Exchange in 1896 and then in 1986 the firm joined London and Tokyo stock exchanges.

Goldman Sachs headquarters are located in New York and has offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centres around the world.

Goldman Sachs has around 35,700 employees, and the firm generated a total annual revenue of $39.161 billion in 2010.The firm is heavily involved in recruiting top graduates from leading business schools around the world and most of its ex-employers are holding top management jobs in governments around the World.

Goldman Sachs Group in a nutshell

INDUSTRY

Banking

Financial Services

REVENUE

(2010)

$39.161 billion

FOUNDED

1869

OPERATING INCOME

(2010)

$12.892 billion

FOUNDER

Marcus Goldman

NET INCOME

(2010)

$8.354 billion

HEADQUARTERS

New York City

TOTAL ASSETS

(2010)

$911.000 billion

AREA SERVES

Worldwide

TOTAL EQUITY

(2010)

$74.257 billion

EMPLOYEES

(2010)

35,700

Transition of the orientations

Pre-2007 Sales Orientation

Goldman Sachs is a service company which was more focused on Investment Banking activities, the firm had a huge reputation of being a risk taking company and not a customer focused company. The firm’s senior partner Guy Levy was once credited with a company’s philosophy of being ‘long- term greedy’ Endlich, L. (1999)which simply meaning that the Goldman Sachs was more interested and focused in making money over the long term and any trading losses in the short term were never to be worried about.

At Goldman Sachs customer were never been put into the centre of the company’s strategy, the firm was more focused on sales and profits. Jobber explained that

‘A sales-orientated company has little focus on customer needs and wants, and does not try hard to create products or services that are suitable for their customers needs’.

Jobber, D. (2007)

This sales strategy had put Goldman Sachs into the highlight of the media during 2007, and the firm has been heavily criticised with many financial issues, the major issue being the America’s sub-prime mortgage crisis. Despite the mortgage crisis Goldman Sachs was able to profit from the collapse in subprime mortgage bonds by short-selling subprime mortgage -backed securities. The firm initially avoided large subprime write downs and achieved a net profit due to significant losses on non-prime securitised loans being offset by gains on short mortgage positions.(The telegraph) Its sizeable profits made during the initial subprime mortgage crisis led the New York Time to proclaim that Goldman Sachs is without peer in the world of finance. As the crisis was begun to unravel the firm’s image and reputation was badly damaged to the extent that an article in The Telegraph Newspaper quoting Rolling Stone magazine compares Goldman Sachs with nothing else but a ‘Vampire squid wrapped around the face of humanity relentlessly jamming its blood funnel into anything that smells like money'(The telegraph)

Current Marketing Orientation

Goldman Sachs realized that its sales approach didn’t do any good for the company and there is a crucial need to focus into a marketing orientation strategy. As one of the firm’s partners was quoted in the Telegraph saying that:

‘Only looking back could we see the real risk, the risk of arrogance. We didn’t see it then, but it was there and it was growing. The firm was at the top. We had always been the best – always the top students and the best athletes and the class leaders. And now we were the best firm – in our self-appraisal. But that was the first step towards arrogance.’ (Wilson, H.(2010) The bank that thought it rules the world. The Daily Telegraph London. 19 April, pp 19)

According to Jobber, D, (2007) Marketing orientated companies are best described as those which focus on customer needs and do recognize when change is needed.

Goldman Sachs is currently trying hard to clean up its image and is more focused into marketing, society and ethical issues. The firm is more involved into helping and giving back to the society that it has once been involved on damaging. The firm has understood the importance of consumer right issues and it has been stressed by Jobber that:

‘Consumer has the right to expect the product to be safe, for its performance to be as expected and for communication of the product to be truthful and not misleading’.

Jobber, D. (2007)

Jobber’s words above can be linked into the quote from Goldman Sachs website saying that:

Goldman Sachs as a global financial institution has understood the need to protect, preserve and promote human right around the world and has accepted that it is their responsibility to bring positive impact on economic, social and environmental challenges that are facing society today. ( Goldman Sachs web site).

Goldman Sachs has 14 clear operating business principles that outlined on the company’s website with a slogan saying ‘Progress is everyone’s business ‘.But it has given more emphasise to its very first business principle as being the value to their client,

‘our client interest always comes first, our experience shows that if we serve our clients well, our own success will follow’

Other 13th Goldman Sachs Business principles are as follow;

Our assets are our people, capital and reputation

Our goal is to provide superior returns to our shareholders

We take great pride in the professional quality of our work

We stress creativity and imagination in everything we do

we make an unusual effort to identify and recruit the very best person for the job

we offer our people th opportunity to move ahead more rapidly than is possible at most other places

we stress teamwork in everything we do.

The dedication of our people

We consider our size an asset that we try hard to preserve

We constantly strive to anticipate the rapidly changing needs of our clients and to develop new service to meet those needs

We regularly receive confidential information as part of our normal client relationships

Our business is highly competitive, and we aggressively seek to expand our client relationships

integrity and honesty are at the heart of our business.

{References for these and a better way of presenting them}

NEWSPAPER.

(Wilson, H.(2010) The bank that thought it rules the world. The Daily Telegraph London. 19 April, pp 19).

Arlidge, J.(2009) I’m doing ‘God’s work’ meet Mr Goldman Sachs. The Sunday Times on line. 8 November, Visited on 12 March 2011.

BOOKS.

Jobber D.(2007) Principles and Practice of Marketing. Mc Graw Hill. 5th edition.

Endlich, L (1999) Goldman Sachs- The culture of success. Little brown & Company.