Wells Fargo's Cross Selling strategies - publié le 19/02/2012

Résumé du document

Wells Fargo is an American company and thus has to deal with the US government policy. Nowadays the latter is globally stable but the company must adapt to new education rules (such as educational loans), taxation, new technologies, access to property (real estate loans), and labor market. Besides, the company has to respect all directives of the Basel Accords. The company enters the frame of the Gramm-Leach-Bliley Act, which allows investment and commercial banks to consolidate.

Wells Fargo operates in the financial services industry and is thus part of the American Banking System. This position explains why the company suffered so much from the financial crisis. Moreover, Wells Fargo is used to dealing with cross selling and mortgages hence its activities are linked to both interest rates and GNP. For instance, rises in interest rates in 2008 and 2009 have affected the company.

Extraits

[...] Wells Fargo operates in the financial services industry and is thus part of the American Banking System. This position explains why the company suffered so much from the financial crisis. Moreover, Wells Fargo is used to deal with cross selling and mortgages hence its activities are linked to both interest rates and GNP. For instance, rises in interest rates in 2008 and 2009 have affected the company. Besides, because US unemployment rate is nearly 10% and wages no longer increase, people are less willing to purchase financing services. [...]

[...] All those factors should be taken into account when dealing with finance. Social factor The company is progressing along with the lifestyle of its customers. The evolution of mentalities on the Internet is a great opportunity for Wells Fargo to improve the online banking-­‐ based model. Besides, the firm has to deal with customer's will: cheaper, the better”. It also has to face the confidence issue since the 2008 financial downturn resulted in people fearing financial services. Next Stage” product: SERVICE. [...]

[...] Threats can also come from mergers between pre existing banks or/and insurances companies. Many financial products and services such as loans, deposit accounts are easily substitutable. Products created by Wells Fargo seem to be more difficult to copy and, only leading institutions of this sector are capable to provide so specific products. Furthermore, we have to take into account economic conditions in order to analyze the threat of substitutes: in time of crisis, people tend to invest money in basic products (highly substitutable) whereas they subscribe to more elaborated products in booming periods. [...]

[...] Wells Fargo also respects the environment by reducing greenhouse gas emissions and helping financing solar photovoltaic system. Legal factor Wells Fargo like all the other companies on the US territory has to respect the local and federal legislation Leach-­‐Bliley Act, Bank Holding Company Act). Also, being part of the American Banking System, it has to deal with many restrictions like the restrictions on transfers of capital Porter's five forces The threat of entry The treat of substitutes The threat of new entrant is low. [...]

[...] Then it exists specialized institutions such as WaMu (Washington Mutual) leading in mortgages or insurances companies, subsidiaries of mega banks and others companies. Moreover, the Gramm-­‐Leach-­‐Bliley act contributed to create new strategic groups. Dynamics of competition Market segmentation Wells Fargo has to face a strongly competitive environment, with its main competitors being Citigroup, Bank of America, US Bancorp and Wachovia Corp. In this sector, the competition is established and stable. This is why every firm tries to have a sustainable competitive advantage. [...]