Wells Fargo Swot Analysis
Wells Fargo Corporation
Wells Fargo has a strong foundation of corporate culture that is embedded in the vision. It states that its service, financial advice, and employees are the strengths of the business. It focuses on every aspect of the corporation’s stakeholders: team members, customers, communities, and shareholders. It focuses on how employees are able to adhere to the highest standard of efficient and ethical business practices. What Wells Fargo lack is the future vision of the company’s operation. Its long-term objective is to emphasize integrity since it is not a commodity but the most rare and precious attributes of personal business. It does not address how the business will gain a bigger share of the national or global market. …show more content…
Since numerous banks supply similar services, Wells Fargo needs a catalyst, such as going greener that is unique to their competitive advantage. The revised mission statement of Wells Fargo Corporation is as followed: We are a bank that focuses on providing services that satisfy customer’s financial knowledge by providing our hard-working people. We will be the change of how financial institutions can play efficient roles in the community and individual’s businesses.
Strategic Issues that Wells Fargo face is to whether it will focus on becoming a national/global bank or a local coast-to-coast bank that will deal with the local communities. These two business types can be harmful to the strategic implementation because of the questions of how it can market two banking segments and how it can compete with different types of banks: local and national/global.
The next strategic issue that Wells Fargo has is whether the acquisition of Wachovia had a positive impact on the company after the economic recession. The financial reports show that there was 100% increase in the liabilities during years 07-08. Wachovia acquisition was positive to Wachovia for its shareholders and management since Wells Fargo gave better deal than that of Citi.
There are numerous strengths for Wells Fargo Corporation. It has built a creditable reputation and recognition as an industry leader, serving over 25 million customers in over 6000 locations. It strives to be the number-one financial services provider in each of the markets by being a lender, issuer, and provider. In 2008, Moody’s Credit Rating gave “AAA”, the highest possible rating. It was the only bank in the U.S. to receive it. Furthermore, Wells Fargo has an unbroken record of paying dividends since the 1995. In addition, it acquired Wachovia Bank, which was a rising bank in the east. From the acquisition, Wells Fargo doubled in size and assets and become the most extensive coast-to-coast community bank.
Wells Fargo has few weaknesses regarding the acquisition of Wachovia Bank.
Wachovia was overcommitted in credit default swaps, which brought subprime mortgage problems during the global economic recession. Moody’s Credit Rating lowered 2 levels citing that Wells Fargo’s capital position has weakened and Wachovia’s assets could hurt earnings. Also, Wells Fargo had to cut dividends to solidify the balance sheets. In January 2009, the recession made Wells Fargo lose half the value of its shares.
Wells Fargo has great opportunities from the global economic recession. Numerous investment banks have disappeared and created a void in investments. This gives a window for Wells Fargo to attempt a new sector of the investment business. Another, large national banks are getting bigger, which means that Wells Fargo is able to leverage its gain during the recession to expand internationally. Since there is lack of regulation that creates a grey area of products and services that bank offers, Wells Fargo can try to lobby regulations that can change its brand as being ethical.
Some threats that Wells Fargo faces are that larger banks worldwide are attempting to expand globally. Foremost, the larger banks in U.S. are also growing as rapidly as Wells Fargo after the recession, which creates greater competition in banking
industry.
The SWOT Matrix shows for 2 strategic plans that Wells Fargo can implement. First is to reconfigure the securities section of the Wachovia Bank acquisition. Since the recession has brought down investment banks such as Bear Stearns, Merrill Lynch, and Lehman Brothers, there are great opportunities to expand into this business segment. With strong creditable reputation and considerable emphasis on culture that brings efficiency, Wells Fargo can fill the void of investment banking and securities. There are over 25 million customers and over 6000 coast-to-coast locations, where sufficient customers that will support the new business segment since there is a history with the brand of Moody’s Credit Rating “AAA” and a record of strong balance sheets. The Second strategy for Wells Fargo would be to expand its business internationally. Since community banks are serving the local communities, and the larger banks, such as Wells Fargo are growing bigger, it will be easier for Wells Fargo to use its credentials and vast number of employees to successfully enter a new market. The extension into the global market will be able to brand the corporation and gain better work force, which will give greater diversity and emphasis on corporate culture. With 2009 Q1 revenue increase even after the acquisition of Wachovia clearly indicates that there are funds to move to a new market.
Appendix 1: SWOT Analysis
Strengths Weaknesses
• Very creditable reputation
• 25 Million customers/6,700 locations
• Considerable emphasis on culture
• 2008 Moody’s Credit Rating “AAA”
• Acquisition of Wachovia Bank
• Strong Balance Sheet • Recession cut half the value of share
• Cut dividend to solidify balance sheet
• Moody’s Credit Rating lowered 2 levels during recession/acquisition
Opportunities Threats
• Disappearance of Investment banks
• Large National banks are getting bigger
• Lack of regulation that blurs products and services that banks offer • Larger banks worldwide attempting to grow globally.
• Large National banks are getting bigger
Appendix 2: SWOT Matrix
SWOT Matrix Strengths
1. Very creditable reputation
2. 25 Million customers/6,700 locations
3. Considerable emphasis on culture
4. 2008 Moody’s Credit Rating “AAA”
5. Acquisition of Wachovia Bank
6. Strong Balance Sheet Weaknesses
1. Recession cut half the value of share
2. Cut dividend to solidify balance sheet
3. Moody’s Credit Rating lowered 2 levels during recession/acquisition
Opportunities
1. Disappearance of Investment banks
2. Large National banks are getting bigger
3. Lack of regulation that blurs products and services that banks offer 1. Use the credentials to expand internationally
(S1, O2)
2. Wachovia assets have strong securities, start new business segment (S5, O3)
1. Establish legal departments to bypass laws to reduce tax
(W2, O3)
2. Improve banking system to reduce the problems with future recession (W3, O1)
Threats
1. Larger banks worldwide attempting to grow globally.
2. Large National banks are getting bigger 1. Target the U.S. customers by extending coast-to-coast services (S2, T2) 1. Regain the loses during recession and expand to keep up with other competitions (W1, T1)
Wells Fargo has a strong foundation of corporate culture that is embedded in the vision. It states that its service, financial advice, and employees are the strengths of the business. It focuses on every aspect of the corporation’s stakeholders: team members, customers, communities, and shareholders. It focuses on how employees are able to adhere to the highest standard of efficient and ethical business practices. What Wells Fargo lack is the future vision of the company’s operation. Its long-term objective is to emphasize integrity since it is not a commodity but the most rare and precious attributes of personal business. It does not address how the business will gain a bigger share of the national or global market. …show more content…
Since numerous banks supply similar services, Wells Fargo needs a catalyst, such as going greener that is unique to their competitive advantage. The revised mission statement of Wells Fargo Corporation is as followed: We are a bank that focuses on providing services that satisfy customer’s financial knowledge by providing our hard-working people. We will be the change of how financial institutions can play efficient roles in the community and individual’s businesses.
Strategic Issues that Wells Fargo face is to whether it will focus on becoming a national/global bank or a local coast-to-coast bank that will deal with the local communities. These two business types can be harmful to the strategic implementation because of the questions of how it can market two banking segments and how it can compete with different types of banks: local and national/global.
The next strategic issue that Wells Fargo has is whether the acquisition of Wachovia had a positive impact on the company after the economic recession. The financial reports show that there was 100% increase in the liabilities during years 07-08. Wachovia acquisition was positive to Wachovia for its shareholders and management since Wells Fargo gave better deal than that of Citi.
There are numerous strengths for Wells Fargo Corporation. It has built a creditable reputation and recognition as an industry leader, serving over 25 million customers in over 6000 locations. It strives to be the number-one financial services provider in each of the markets by being a lender, issuer, and provider. In 2008, Moody’s Credit Rating gave “AAA”, the highest possible rating. It was the only bank in the U.S. to receive it. Furthermore, Wells Fargo has an unbroken record of paying dividends since the 1995. In addition, it acquired Wachovia Bank, which was a rising bank in the east. From the acquisition, Wells Fargo doubled in size and assets and become the most extensive coast-to-coast community bank.
Wells Fargo has few weaknesses regarding the acquisition of Wachovia Bank.
Wachovia was overcommitted in credit default swaps, which brought subprime mortgage problems during the global economic recession. Moody’s Credit Rating lowered 2 levels citing that Wells Fargo’s capital position has weakened and Wachovia’s assets could hurt earnings. Also, Wells Fargo had to cut dividends to solidify the balance sheets. In January 2009, the recession made Wells Fargo lose half the value of its shares.
Wells Fargo has great opportunities from the global economic recession. Numerous investment banks have disappeared and created a void in investments. This gives a window for Wells Fargo to attempt a new sector of the investment business. Another, large national banks are getting bigger, which means that Wells Fargo is able to leverage its gain during the recession to expand internationally. Since there is lack of regulation that creates a grey area of products and services that bank offers, Wells Fargo can try to lobby regulations that can change its brand as being ethical.
Some threats that Wells Fargo faces are that larger banks worldwide are attempting to expand globally. Foremost, the larger banks in U.S. are also growing as rapidly as Wells Fargo after the recession, which creates greater competition in banking
industry.
The SWOT Matrix shows for 2 strategic plans that Wells Fargo can implement. First is to reconfigure the securities section of the Wachovia Bank acquisition. Since the recession has brought down investment banks such as Bear Stearns, Merrill Lynch, and Lehman Brothers, there are great opportunities to expand into this business segment. With strong creditable reputation and considerable emphasis on culture that brings efficiency, Wells Fargo can fill the void of investment banking and securities. There are over 25 million customers and over 6000 coast-to-coast locations, where sufficient customers that will support the new business segment since there is a history with the brand of Moody’s Credit Rating “AAA” and a record of strong balance sheets. The Second strategy for Wells Fargo would be to expand its business internationally. Since community banks are serving the local communities, and the larger banks, such as Wells Fargo are growing bigger, it will be easier for Wells Fargo to use its credentials and vast number of employees to successfully enter a new market. The extension into the global market will be able to brand the corporation and gain better work force, which will give greater diversity and emphasis on corporate culture. With 2009 Q1 revenue increase even after the acquisition of Wachovia clearly indicates that there are funds to move to a new market.
Appendix 1: SWOT Analysis
Strengths Weaknesses
• Very creditable reputation
• 25 Million customers/6,700 locations
• Considerable emphasis on culture
• 2008 Moody’s Credit Rating “AAA”
• Acquisition of Wachovia Bank
• Strong Balance Sheet • Recession cut half the value of share
• Cut dividend to solidify balance sheet
• Moody’s Credit Rating lowered 2 levels during recession/acquisition
Opportunities Threats
• Disappearance of Investment banks
• Large National banks are getting bigger
• Lack of regulation that blurs products and services that banks offer • Larger banks worldwide attempting to grow globally.
• Large National banks are getting bigger
Appendix 2: SWOT Matrix
SWOT Matrix Strengths
1. Very creditable reputation
2. 25 Million customers/6,700 locations
3. Considerable emphasis on culture
4. 2008 Moody’s Credit Rating “AAA”
5. Acquisition of Wachovia Bank
6. Strong Balance Sheet Weaknesses
1. Recession cut half the value of share
2. Cut dividend to solidify balance sheet
3. Moody’s Credit Rating lowered 2 levels during recession/acquisition
Opportunities
1. Disappearance of Investment banks
2. Large National banks are getting bigger
3. Lack of regulation that blurs products and services that banks offer 1. Use the credentials to expand internationally
(S1, O2)
2. Wachovia assets have strong securities, start new business segment (S5, O3)
1. Establish legal departments to bypass laws to reduce tax
(W2, O3)
2. Improve banking system to reduce the problems with future recession (W3, O1)
Threats
1. Larger banks worldwide attempting to grow globally.
2. Large National banks are getting bigger 1. Target the U.S. customers by extending coast-to-coast services (S2, T2) 1. Regain the loses during recession and expand to keep up with other competitions (W1, T1)