New China Trust Co., Ltd. Development Strategy

As financial institutions given born by China's Reform and Opening policy, Trust Companies (TCs) have been through a unique and difficult way different from other financial institutions such as commercial banks and insurance companies. On one hand, TCs enjoyed a reputation of providing all kinds of financial services under one umbrella because of their overlapping role in monetary market, capital market, and direct investment market, which led to many financial innovations for the past 30 years. On the other hand, TCs had experienced 5-time industry turmoil and been rectified by governmental regulator who views TCs as "bad kids" due to abuse of their flexibilities in the market. In 2007, China Banking Regulation Commission built up a clear perspective on TCs" future development. Regarding to the market background above, this essay conducts a case study on New China Trust Co. Ltd. (NCT), and provides strategic transform suggestions in a mid-term scope.The essay reviews TCs' role through China's financial system, regulation niche, and major competitors by analyzing market and competition environment within the whole capital market. Furthermore, the essay analyzes current situation of NCT by using enterprise strategic management and SWOT theories. This analysis includes organization structure, business operation, key business lines and products, clients' base, as well as fund raising channels. By doing so, the essay discovers major issues, which departs the company from the strategic goal. The discussed NCT mid-term plan aims at upgrading the overall management system.Great changes have taken place in eco-environment of China's capital market compared with what it was 30 years ago. Domestic financial institutions are facing both opportunities and challenges from within the nation and worldwide. The future development of TCs is not only a trial of integrated operation inside the financial market and a supplement to other institution functions, but also has their own market orientation and main stream of business. It has become a must for every executive to carefully consider about how to establish consistent core competitive advantages. In order to achieve the strategic goal of "becoming the leading integrated financial services provider in China's capital market", NCT shall utilize Barclays' resources and keep building up asset management expertise as a long-term core competition capacity. The essay suggests NCT on the following aspects: (1) Emphasize execution power on management targets; (2) Balance the development of investment banking and asset management businesses; (3) Adjust the organization structure based on major functions; (4) Reshape the operation procedures to increase workflow efficiency; (5) Improve employee incentive plans and human resources strategies. In a nutshell, this essay intends to sketch a road-map for NCT's mid-term strategic transform in a practical point of view.