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Wells Fargo Case

Essay by   •  April 24, 2013  •  Case Study  •  423 Words (2 Pages)  •  1,979 Views

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In order for Wells Fargo to make a clear assessment the company needs to have more control over the individual activities being carried out by each individual branch. This would make the organization more centralized. This may lead individual branches to their demise; however, there is a way that the company can remain more decentralized and still maintain the objectives of the firm. Wells Fargo may want branches to carry out decisions that fit that individual branch, yet to control processes, policies should be in writing and approved. This would keep down a lot of confusion and the firms objectives could be seen by customers wherever they go.

When doing a thorough analysis one definitely wants to examine bargaining power of suppliers, potential development of substitute products, bargaining power of consumers, potential entry of new competitors, and rivalry among competing firms. This is better known as Michael Porter's Five Forces Model. Industry competition is determined by this model. Wells Fargo has a high rivalry among competing firms. Banking has a large industry size, yet Wells Fargo is somewhat protected by government limitations. Wells Fargo has a low potential entry of new competitors, yet there is still potential development of substitute products. There is a lot of developing online-only banking institutions. Strong brand names are important for consumers and it requires high capital requirements to become an entrant into the market. Wells Fargo has a moderate bargaining power of consumers. Large quantities of consumers diminish the company's value, but when customers like particular products they tend to pay more.

The industry analysis is used to assess the level of industry attractiveness. Economic forces play a huge part in the banking industry, especially those entities that are mortgage brokers. In recent years the United States has experienced record levels of unemployment. This has an adverse effect on people who are investing, saving, or borrowing money, thus putting a major strain on the banking business to sustain. When it comes to political, governmental, and legal forces the banking business is heavily regulated. The bank has strict policies in place to protect the institution and consumers. A driving force that is setting banks apart from each other is technology. The latest innovative technology introduced to banking is the ability to deposit checks from Android and Apple phones. Some institutions are now extending the time for beginning to work on the next business day. Competitive forces are rising greatly due to new innovations in technology, yet the ability to tap into the banking realm is not very attractive.



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