Franklin Resources: Finance Analysis, Internal Competitive Resources

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Intangible asset

Since its inception in 1947, Franklin Resources Incorporation has attained an optimal market position due to the strength of the brand. One of the factors that have led to a significant development in the company’s brand involves its focus on investment excellence. The firm is committed to providing its clients with exceptional asset management services. In a bid to succeed in providing clients with optimal investment opportunities, the company has established different subsidiaries under different brand names such as Mutual Series, Fiduciary Trust, Balanced Equity Management, K2, Franklin, and Templeton. The subsidiaries’ mandate involves active portfolio management.

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The subsidiaries are comprised of distinct investment teams. These subsidiaries have contributed remarkably to the provision of excellent asset-management services. Some of the aspects that the firm is committed to nurturing entail integrity, sound corporate governance, and trust. Therefore, Franklin Resources Incorporation has sustained a positive corporate image within the asset management industry. Furthermore, the strength of the company’s brand is evidenced by its inclusion within the Standard & Poor’s 500 Index. The company’s corporate image is also illustrated by the fact that its stocks are traded in the New York Stock Exchange [NYSE] under the ticker-symbol BEN (“Franklin Resources Incorporation” par.2).

Cost advantage

Franklin Resources Incorporation appreciates the importance of developing economies of scale in its pursuit of business excellence. The firm has managed to develop considerable economies of scale in its quest to be considered a pioneer in global investment. This goal has been achieved by adopting an aggressive market development strategy. For example, the firm has established its offices in 35 countries. Moreover, the firm’s operations are managed under the watch of over 600 investment professionals and over 240,000 relationship advisors globally. Through this strategy, the firm has been in a position to improve its market to reach a relatively low cost.

Network effect

The company is a well-established firm in the financial sector and it specialises in the provision of balanced portfolios, client-focused equity, and fixed income services. The firm also offers balanced mutual and fixed income funds. Its product diversification strategy, which focuses on offering customers a balanced portfolio, is likely to attract risk-averse investors. One of the factors that will fuel growth in the value of the company’s financial products relates to the high rate at which investors appreciate risk management as a fundamental component in their investment practices. Currently, customers are increasingly demanding a high level of expertise concerning risk management in their investment processes.

Over the past decades, Franklin Resources has integrated risk management as a core component of its investment management culture. The dynamics regarding the investors’ perception of risk presents a high opportunity for the firm to succeed in developing products that address the prevailing market gap. Therefore, the company’s focus on building a balanced investment portfolio and its emphasis on optimal risk management are likely to attract clients. Consequently, the firm will increase the size of its customer base. Therefore, the value of the asset management services offered by Franklin Resources Incorporation is likely to undergo considerable growth in the future.

Efficient scale

Franklin Resources has limited its operations to the provision of asset management services. Subsequently, the firm has identified a niche market. The company’s focus on a niche market has contributed significantly to its success in addressing the growing complexity in asset management. Therefore, to serve the niche market successfully, the firm has developed a broad investment portfolio. Thus, the firm has succeeded in generating economic profits continuously.

Switching cost

In its effort to improve its competitive advantage, Franklin Resources Incorporation has adopted the concept of product differentiation. The firm has implemented this strategy by developing an extensive product line. It has succeeded in developing specific localised products. Additionally, due to its product differentiation strategy, the firm has been in a position to increase the cost of its customers’ switching to competing products.

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Internal competitive resources

Franklin Resources Incorporation is committed to developing and sustaining a high competitive advantage. In a bid to achieve this goal, the firm has exploited its internal resources optimally in addition to the implementation of an effective strategy as evaluated herein.

Internal resources

The firm has cited human capital as one of the fundamental internal resources in its pursuit of business excellence. The firm realises that its success in developing exceptional investment products that address the complex market needs is dependent on the quality of its workforce. Thus, the firm has nurtured exceptional research capabilities. The firm has adopted a bottom-up approach in researching an investment. This approach has enabled the firm to succeed in developing viable investment products.

Its over 600 investment professionals [research analysts and portfolio managers] distributed across the globe collaborate virtually through effective information communication technologies in sharing ideas and knowledge. The investment professionals have “over 16 years of experience concerning operations within the asset management industry and they have been in existence within the firm for over 10 years” (“Franklin Resources Incorporation” par. 2). The depth and breadth of the firm’s global distribution of its investment professionals play an essential role in improving the firm’s capacity to identify and exploit potential investment gaps. This research approach has enabled the firm to attain a unique market position.

Franklin Resources Incorporation is committed to becoming the employer of choice by integrating employee-oriented management practices. Some of the strategies that the firm integrated include “focus on attracting, developing, and retaining talent” (“Franklin Resources Incorporation” par. 18). According to the firm, top talent is fundamental in the execution of business strategies and delivering the desired results. In addition to human capital, Franklin Resources has anchored its competitiveness on the implementation of emerging technology. Thus, the firm has integrated a comprehensive technology platform that is improved continuously to align with the market changes.

Strategy

Adopting effective strategy constitutes a fundamental aspect in pursuit of long-term business excellence. The strategy adopted should contribute to the development of a competitive edge. Thus, organisational managers must formulate and integrate optimal strategy. Franklin Resources Incorporation operates in an industry that is characterised by intense competition. The major competitors include “brokerage firms, insurance companies, banks, and investment banks firms” (“Franklin Resources Incorporation” par. 21). For example, by 30th September 2013, the industry had over 7,600 open-end mutual funds. Therefore, coming up with a strategy that will counter the stiff competition will place the company at the apex in the marketplace.

The competitors provide customers with diverse investment policies and objectives. To succeed in an environment that is increasingly becoming complex, Franklin Resources Incorporation has adopted the concept of differentiation. This goal has been achieved by integrating the concept of product innovation. Subsequently, the firm has succeeded in localising its products. For example, the firm has developed Sharia-compliant investment products. This aspect has played a significant role in improving the firm’s success in accessing customers that appreciate Sharia-compliant products.

Its product differentiation strategy has contributed significantly towards the development of a varied product mix. Thus, the firm is in a position to meet the unique investment needs of different customer groups. According to the firm’s management team, the differentiation strategy will enable Franklin Resources to sustain long-term competitiveness.

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Works Cited

Franklin Resources Incorporation: Form 10-K; Franklin Resources Incorporation 2013. Web.

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BusinessEssay. (2022, March 28). Franklin Resources: Finance Analysis, Internal Competitive Resources. Retrieved from https://business-essay.com/franklin-resources-finance-analysis-internal-competitive-resources/

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"Franklin Resources: Finance Analysis, Internal Competitive Resources." BusinessEssay, 28 Mar. 2022, business-essay.com/franklin-resources-finance-analysis-internal-competitive-resources/.

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BusinessEssay. (2022) 'Franklin Resources: Finance Analysis, Internal Competitive Resources'. 28 March.

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BusinessEssay. 2022. "Franklin Resources: Finance Analysis, Internal Competitive Resources." March 28, 2022. https://business-essay.com/franklin-resources-finance-analysis-internal-competitive-resources/.

1. BusinessEssay. "Franklin Resources: Finance Analysis, Internal Competitive Resources." March 28, 2022. https://business-essay.com/franklin-resources-finance-analysis-internal-competitive-resources/.


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BusinessEssay. "Franklin Resources: Finance Analysis, Internal Competitive Resources." March 28, 2022. https://business-essay.com/franklin-resources-finance-analysis-internal-competitive-resources/.