E*TRADE FINANCIAL CORP.

1. E*TRADE FINANCIAL CORP. By Louise Philbrick Keith Grant David Guerra

2. Current Condition Vision and Mission External Factors CPM EFE Internal Factors IFE Analysis Key Ratios SWOT Matrix Space Matrix BCG IE Matrix GSM Possible Strategies Recommendations Evaluation Overview

3. E*TRADE Overview • E*trade Financial Corp., is a diversified financial services holding company, by and through its subsidiaries, is a global provider of financial services to retail, corporate and institutional customers. Building on our foundation in online investing, we have expanded to provide retail customers with an integrated and personalized suite of investing, banking, lending, planning and advice services primarily through online channels, under our new brand, "E*TRADE FINANCIAL.”

4. History of E*trade • 1982, founded as a service bureau by inventor and physicist, Bill Porter • 1992, E*Trades Securities Inc. was born to start online investment services • 1996, E*Trade moved public • 1997 Porter appointed Christos Cotsakos as CEO • 2000, E*Trade purchased Telebanc Financial and to become known as E*Trade Financial • 2001 E*Trade acquired Online Mortgage originator LoansDirect, and is now known as E*Trade Mortgage

5. What E*Trade is today • E*Trade is active in Germany, Australia, Canada, New Zealand, Denmark, Hong Kong, Japan, Korea, Sweden, and the United Kingdom • E*Trade is in a Process of searching for a new advertising agency to replace the current Goodby, Silverstein & Partners • E*trade owns and operates over 15,200 Automated Teller Machines • E*Trade is becoming a complete full service financial support and execution portal for individual investors

6. Stock Price Performance

7. Important E*Trade facts • 2003 E*Trade’s revenues rose to $2008 million and net income rose to $203 million despite a reduction in the number of employees by only 5 from the previous year • E*Trade’s major competitors are Schwab, Ameritrade, JB Oxford Holdings, Financial Institutions, and AB Watley Group • E*Trade is trying to regain investor confidence after former CEO Christos Cotsakos received a 2001 pay package valued at $80 million even as the company’s share price plummeted • E*Trade discontinued advertising in the Super Bowl in 2001

8. E*Trade’s goals and objectives • To be the global leader in online financial and investment services • To commit to helping our customers of all ages achieve their financial goals by using state-of-the-art technology • Provide a continuous improvement environment for our customers, employees, and stockholders • Provide career opportunities for employees and profitable growth for shareholders • Operate using the highest ethical ideals • Strive to improve the quality of life for citizens within the communities and countries we serve

9. Vision statement (Proposed) • E*Trade’s vision is “to empower self-directed investors to make informed investment decisions and to take control of their financial future with anytime, anywhere access to the world’s major investment markets”

10. Mission Statement • To create long term shareholder value through superior financial performance driven by the delivery of a diversified range of innovative, customer-focused financial products and services and supported by an operating culture based on the highest levels of teamwork, efficiency and integrity. Source: www.etrade.com

11. Competitive Profile Matrix

12. External Audit

13. External Factors Evaluation Matrix

14. EFE Matrix Concluded

15. Internal Audit

16. Internal Factors Evaluation Matrix

17. IFE Matrix Concluded

18. Key Financial Ratios

19. Key Ratios Concluded

20. S.W.O.T Matrix

21. S.W.O.T Matrix Concluded

22. Space Matrix

23. Boston Consulting Group Matrix High Medium Low 1.0 .50 0 High +20 27% 27% 73% 73% Medium 0 Low -20

24. IE Matrix

25. Grand Strategy Matrix • Concentric Diversification • Horizontal Diversification • Conglomerate Diversification • Joint Venture

26. Possible Strategies • Increase European Dominance • Make attempts to acquire TD Waterhouse from Toronto-Dominion Bank • E*Trade should look into broadening their International presence • Use debt financing to improve computer system to ensure that their website is secure and capable of handling numerous transactions • Increase customer base, by increasing awareness through stronger advertising

27. Decisions • Primary • Increase presence and awareness in the European Market • Possibilities • Improve current E-Commerce infrastructure to be certain that their website is not only secure, but capable of handling numerous transactions • Attempt to acquire another online brokerage firm • Pay dividends in attempt to increase stock price to raise capital

28. Implementation • Use revenues generated from European transactions to acquire at least 8,000 more ATM’s in the European Market to help expand its global business within the next 2-3 years • Use capital obtained from stock revenues to improve computer infrastructure • Acquire TD Waterhouse within 3 years • Increase promotion of enhanced online banking platform domestically and globally

29. 2004 Financial Statistics • Net Income- $380.5 million • Total Revenue- $2,083 million • EPS- $0.92 • Total Debt- $585.6 million • EBIT- $1071 million • Working Capital $1,021.2 million • Common Shares outstanding- 366.59 million • Operating Income- $1,111.3 million