Wells Fargo

Week 3 Assignment 1

Ellen Milton

Strayer University

BUS499 Business Administration Capstone

Dr. Brian C. Grizzell

July 14, 2018

Week 3 Assignment 1

Introduction

Wells Fargo is an international financial company. It offers diverse financial services including banking, investments, insurance, mortgage, and commercial and consumer finance. It has its headquarters in San Francisco and has about 9000 stores internationally and across North America. It has been in business for long and has set its base as a reliable financial services company with businesses in different countries. Its strategic plan and stakeholders have contributed to its success despite effects of the technological advancements and globalization.

Globalization

Globalization have impacted greatly on Wells Fargo. They have had positive and negative effects. Globalization has helped in managing the physical supply chain. This has led to a substantial progress that optimizes the physical supply chain. Nonbank and bank payment technologies have eased business by enabling small companies to do business with larger ones. Optimal financing instruments have emerged that minimize the capital cost to both supplier and seller and develop a beneficial partnership. The cost that would have been incurred in the capital can be directed to other sectors in the business. These may include business expansion or increasing efficiency in other departments. Technology-based financing options lower administrative burdens, risks and costs incurred in handling the cash and its transactions. Despite globalization showing a positive impact, it has its negative side. It has led to loss of several jobs more so from automation of most processes.

Technology

Technology has had a significant impact on financial management approaches. Previously, the sellers and buyers worked independently in acquiring the financial assistance that was necessary to enable their businesses to trade. This approach was costly as the process resulted in additional costs. There were trade documents used traditionally such as credit letters to follow up processes and keep records. These were expensive and heavily relied on manual processes. Such transactions can nowadays be done through online communication or telephone calls. This lowers the cost incurred by both clients and Wells Fargo and saves on time. There has been an increase in the number of available financing options for the company through technology.

Industrial-Based Model

There are two models that can be used by a company to earn returns that are above average. These are industrial organization model and resource-based model. The industrial organization model argues that external characteristics of the firm largely determine above-average returns. It focuses on the external characteristics of the firm such as the general, industry and competitive environment. The general environment is about the society, demographic, sociocultural, technological and political trends. Political stability is necessary to provide an enabling business environment. An increase in population size can impact positively on revenue due to high demand for financial services offered by Wells Fargo. The income distribution of the population will also determine the purchasing power. Wells Fargo has tailored its services to suit customers from all income levels, and this is one way of realizing above-average revenue. The industry environment consists of supplier power, entry barriers, buyer power, competitive rivalry and availability of substitutes. New firms always take a share of the market when they enter an industry. Wells Fargo is established and is a major shareholder in the financial industry that can be rarely shaken by new entrants. The financial industry is characterized by a high buyer power. Customer care must be kept efficient and high to retain customers, and this is one area that Wells Fargo has invested. There is competitive rivalry between wells Fargo, Bank of America, J. P. Morgan Chase and Citigroup. However, differentiation of products makes it possible to recognize them and avoid confusion.

Resource-Based Model

On the other hand, resource-based model argues that it is the internal characteristics of any organization that determine the above-average returns. It focuses on obtaining and developing important capabilities and resources that cannot be imitated by rival companies. It needs the knowledge of the firm’s resources and its strengths and weaknesses. The integration of resources, strengths and capabilities, should be used to create a competitive advantage. Wells Fargo has the strengths of large market share, unique products and a good reputation. These make it trustworthy for customers who like dealing with an established financial company like Wells Fargo. The unique products make it easier to recognize in the market so that customers do not have a problem in associating with the company. To provide a competitive advantage, the resources and capabilities should be valuable, rare, costly to imitate and impossible to substitute. They should enable the firm to exploit opportunities and neutralize the external threats. The firm needs to be well-organized to realize the full benefits of these capabilities to use them as a competitive advantage.

Vision

The vision of Wells Fargo is to satisfy the financial needs of all its customers and to assist them have financial success. They aim to do this through providing guidance and providing a choice of services and products to serve several of financial needs of their customers. This is one of the reason through which it has managed to expand throughout the world and acquire its present status. The different services that it offers resonate with every member of the society. It has more than eighty businesses. This way, they cater for everyone and are considerate to every group irrespective of their financial income. These efforts have seen it receive numerous awards over the years. It strives to build lifelong relationships with its customers.

Mission

Its mission statement is “Our Product: service. Our value-added: financial advice. Our competitive advantage: our people”. The staff forms one of the greatest assets that a company can have, and Wells Fargo has put this into consideration. They have a competitive advantage of believing in people. Everybody likes to be believed in. It gives confidence and self-assurance that one is worth and appreciated. This unlocks the potential in people enabling them to be creative and increases their work output. They provide a good working environment for their staff that is necessary to improve their professional skills and enable them to reach their career goals. The value and recognition accorded to the staff raises their self-esteem, and this translates into better output.

Stakeholders

Stakeholders are affected by the performance of a firm and can lay claims on the firm’s wealth. The three main classes of stakeholders are product market, capital market and organizational stakeholders. Product market stakeholders are the primary customers and suppliers. The customers are the main source of revenue for the company from the sale of a company’s services and products. They are the main reason Wells Fargo was set up. They provide valuable feedback on the company’s customer service and products (Hill, 2014). This enables the company to improve on its service delivery and provide solutions to the needs of its customers based on what they ask for. Capital market stakeholders include investors, debt suppliers and banks. They support the firm by providing the financial help needed to do and expand business. In this way, they directly help Wells Fargo to increase its market share by expanding to different countries and regions. Organizational stakeholders comprise employees and managers. The management of Wells Fargo sets the strategic direction of the company and employees perform these specified tasks efficiently. They help the company to reach its profit and revenue potential.

Conclusion

The strategic management of Wells Fargo has enabled it to earn the trust from its customers and given it a worldwide reputation. The vision and mission statements of a business should help to shape its strategic plans. It should encompass the needs of the customers and values the firm stands for. Industrial organization model and resource-based model are important in assessing a business to help acquire above-average revenue. Stakeholders play an important part of any firm and should be treated fairly and with care to ensure they fully contribute to the growth of the business.

References

Hill, Brian. (2014). What Are the Stakeholders' Roles in a Company? Retrieved from http://smallbusiness.chron.com/stakeholders-roles-company-25029.html

Hitt, A. M., Ireland, D. R., Hoskisson, E. R. (2000). Strategic management and strategic competitiveness. Retrieved from www.uic.edu/classes/mgmt/mgmt495tl/Chapter1_Slides.ppt‎

Wells Fargo (2013).Globalization impacts on the financial supply chain. Retrieved from https://treasuryinsights.wellsfargotreasury.com/?elqPURLPage=1696

Whitehead, G. (2011, March 20). Wells Fargo strategic plan. Retrieved from http://cassieamundson.efoliomn.com/Uploads/Wells%20Fargo%20Strategic%20Plan.docx.

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