Vanguard has many characteristics that make it an organization. The company’s contribution in the US mutual funds industry is tremendous. It has a strong corporate culture that makes it appear distinct from all other mutual fund companies. The company also has many low-cost strategies, efficient communication channels, predictable performance standards and high-quality services. These efficiencies are necessary for any company to thrive from an organizational perspective.
Vanguard is very much like both Wal-Mart and Home Depot. All of these entities have organizational structures that need to maintained efficiency for organizations to achieve long-term growth. The only difference is in the types of business activities in which these companies engage. Whereas Vanguard belongs to the mutual funds industry, Wal-Mart is a public corporation that operates a chain of discount departmental stores. Home Depot, on the other hand, is a retailer of home construction and improvement products. I think that the market share of Vanguard will continue to grow well into the future because the company has made a positive reputation for itself. It is for this reason that other players in the mutual funds industry use it as a yardstick of measuring their own performance.
Other companies such as Fidelity, Dreyfus, and Rowe Price may find it difficult to compete with vanguard. Meanwhile, they can still achieve a sizeable market share through leveraging on an aggressive growth that has an outstanding record. The businesses also need to focus on attracting capable portfolio managers as well as entering the investment counseling business and commodity business trade-offs.
Vanguard managers should consider transforming the minimal promotion strategy into a full-scale advertising campaign in order to attract as many new investors in the US mutual funds industry as possible. With the marketing efforts of companies such as Fidelity and Dreyfus, the US industry continues to be marvelously competitive. Vanguard can only maintain a leadership position through massive promotion campaigns.
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