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Module 4: GS Case Study - Marcus

 
 
 

Module 4 Description

We will explore the journey of how Goldman Sachs entered the consumer space and discuss whether a large firm with 145 years of institutional experience can successfully innovate and achieve scale in a new customer segment. 

In 2008, Goldman Sachs became a bank holding company, gaining the ability to take in retail deposits and engage in consumer lending and opening the doors to a new opportunity set. In 2016, Goldman Sachs launched its Consumer business, Marcus by Goldman Sachs, to utilize its capabilities as a bank and diversify revenue. As of Q1 2020, the Consumer business has $72 billion in deposit balances, $7 billion in loan and card balances and more than 5 million customers across all its products. 

Using Marcus by Goldman Sachs’ trajectory, this class will examine whether large institutions can adapt to change and discuss how technology can play a role in driving innovation. Omer Ismail, the head of the US Consumer business, will join the class to share his insights and lessons learned in building the business, as well as the opportunities moving forward. 

 
 
 

Study Questions

  1. Should Goldman Sachs enter the Consumer business? Why or why not?

  2. What were the strengths and weaknesses of the way Goldman Sachs structured and supported Project Mosaic? How were Ismail and Talwar able to successfully innovate within a large firm like GS? How would you grade Goldman's approach to building and staffing the Marcus team?

  3. What do you think of Goldman’s two-pronged Consumer strategy: building products under its own proprietary brand, Marcus, and developing co-branded partnerships like Apple Card?

  4. What is the right pace for growth? Which is the better bet: to pause to allow performance to catch up with growth, or to seize the opportunities that beckon for Marcus to diversify into other consumer finance products?

 
 

Reading List

Required

  1. McDonald, Rory, Samir Junnarkar and David Lane. “Marcus by Goldman Sachs.” Harvard Business School Case 620-005, November 2019. (Available for Purchase)

  2. Goldman Sachs Investor Day presentation on the Consumer and Wealth Management Segment, January 2020. See pages 11-16 of presentation.

Optional

  1. Corkery, Michael and Nathaniel Popper. “Goldman Sachs Plans to Offer Consumer Loans Online, Adopting Start-Ups’ Tactics.” New York Times, 15 June 2015. (Available behind Paywall)

  2. Kumar, S. “A skeptic’s look at Goldman Sachs’ plan to help Main Street.” Fortune, 15 June 2015.  (Available behind Paywall)

  3. Popper, Nathaniel. “After 147 Years, Goldman Sachs Hangs a Shingle on Main Street.” New York Times, 18 June 2016. (Available behind Paywall)

  4. Harris, Ainsley. “Will You Trust Marcus (and Goldman Sachs) with Your Debt?” Fast Company, 13 October 2016. 

  5. Rooney, Kate. “Goldman’s Main Street Transformation Including the Upcoming Apple Card is Costing It Big Money.” CNBC, 16 July 2019. 

  6. Son, Hugh, “Goldman CEO: If Marcus was a Silicon Valley start-up, people would be ‘throwing money at us’.” CNBC, 6 June 2019. 

  7. DeFrancesco, Dan and Dakin Campbell. “Finn, JPMorgan’s failed millennial-focused app, was plagued with internal skepticism and uncertainty.” Business Insider, 27 June 2019. (Available behind Paywall)

  8. Marshall, Elizabeth Dilts. “Focus at Goldman's first investor day will be on its consumer bank Marcus.” Reuters, 29 January 2020. 

  9. Lieber, Ron. “Which Consumer Lenders Are (and Aren’t) Helping the Most.” New York Times, 17 March 2020 (Available behind Paywall).

  10. Kauflin, Jeff. “Coronavirus Spread Puts Fintech Lenders at Risk.” Forbes, 19 March 2020. (Available behind Paywall)