Wells Fargo Teaching Notes
I. Current Situation
A. Current Performance
Revenue increased by 61.25%[US$34,898 million, 2008 to US$56,274 million
in 2009]
Wachovia acquired end of 2008
In 2009, 72% of revenue attributed to community Banking.
Net income in 2009 up by 200% from 2008.
Overall credit loss in 2009 up by 255% when compared to 2006.
Repaid US$25 billion to US treasury for TARP funds.
Long-term debt fell from $267158 million in 2008 to $203861 million in 2009
B. Strategic Posture
(A) Mission
To be a trusted global provider who satisfies all the financial
needs of its customers, save them money and time by making it
easy for them to arrange financial transactions and allow them a
volume discount.
(B) Objectives
To provide new financial products
To provide better delivery system
Continue to expand service
Keep up with global competition
Build and maintain feeling of Community banking
Become a sustainable and trustworthy provider
Continue to add modern banking features
Increase revenue
Bounce back following recession
Gain new customers in extended markets
Increase the amount of products to customers
o Currently at 5.95, goal 8
(C) Strategies
Use of technology to understand customer needs
Cross selling to existing customers (Wachovia banking)
(D) Policies
Customer Centric
Use of economies of scale to gain competitive advantage
II. Corporate Governance
A. Board of Directors
Original Directors / Founders: Henry Wells, William Fargo
B. Top Management
San Francisco headquarters
III. External Environment
A. Societal Environment
(A) Economic
Credit crisis (T)
(B) Technological
Improvement in Internet technology that facilitated banking
(C) Political – Legal
Change in financial regulations (O/T)
(D) Socio-cultural
Demographic change –financial products customized according to
B. Task Environment
(A) Forces driving industry competition
1. Threat of new entrants: Moderate
2. Bargaining power of buyers: High
Strong competition and mature market
3. Threat of substitute products: Low
4. Bargaining power of suppliers: Medium
5. Rivalry among competing firms: High
Five largest firms are Bank of America, J.P. Morgan Chase,
6. Power of other stakeholder: High
(B) Factors in immediate environment affecting the company
1. Customers
environment.
IV. Internal Environment
A. Corporate Structure
1. Operating Segments
Community banking generating 71% of total revenue
2. Acquired by Norwest corporation, the name Wells Fargo and its
countries of the world.
B. Corporate Culture
1. Custom centricity
money charity
C. Corporate Resources
1. Marketing
a) Helping customers to find their goals and develop plans to
achieve those goals (S)
2. Finance
The financial objective of the company is to maximize the shareholders’
value.
a) Total revenue grew by 61.25% in from 2008 to 2009 (S)
b) Overall credit losses – 120% (2006); 220% (2008); 256% (2009).
3. R&D
a) Mobile banking service – on the process of developing alert
4. Operation and Logistic
Internet (S)
(S)
5. Human Resource Management
a) Not mentioned
6. Information System
a) Utilizing technology for improving services (S)
V. Analysis of Strategic Factors (SWOT)
A. Review of Mission and Objectives
1.
Wells Fargo’s mission is to offer variety products conveniently to meet
financial needs of every customers
However, improving overall business lines by being all things to all
Focused product strategies
VI. Strategic Alternative
A. Strategic Alternatives
(A) Align the corporate portfolio with new/existing customers
(B) Mergers and Acquisition
(C) Increase international presence
a. Wells Fargo markets (not Wachovia)
(D) Take qualified risks
a. Evaluate people on an individual basis
B. Recommended Strategy
Align corporate portfolio with existing customers
Leverage Wachovia
Use of Advanced IT technology
These strategies will help;
o Increase customer base
VII. Implementation
A. Programs
Leverage 2010 financial reform
B. Financial Analysis
Align marketing campaigns towards new corporate strategy
C. Standard Operating Procedures
vision and objectives
VIII. Evaluation and Control
A. Information System
Leverage existing advanced technology to evaluate product differentiation
and strategy
B. Control Measures
Define corporate strategy at milestones by evaluating key performance