Wells Fargo Case Study

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Strategic Management – Part 1 - Case Study This case study is about Wells Fargo, a firm competing in the financial services industry. We are going to analyse its strategy, driven by Cross-Selling, to understand this success story. I. Strategic Environment 1. Macro Environment Using the PESTEL framework, the analysis is divided as follows: The Graham-Leach-Bliley Act opened competition between banks, insurers and brokers. It allowed investment and commercial banks to consolidate. This was a major opportunity for Fargo because the firm was doing business in every segment of the industry. However, government interventions and mortgage issues for instance, are considered generally as major threats to the financial services business. Concerning the economic issue, there were a lot of big mergers in the United states in 1998. Wells Fargo seized this opportunity to merge with Norwest Corporation, and it resulted in the 6th largest bank in the US with $190 billion assets under management. In 2003, the earnings increased even though there was a rise in the interest rates level. The firm profited from the economic slowdowns, because it reduced competition. The main aspect of the social issue is the population growth, which implies a growth of the demand for financial products. Major technological challenges were incidents of online scams. Fargo spent $500 million every year on R&D and seized the expansion of the Internet as a major opportunity: they were one of the first bank to offer online services, and they experienced the biggest volume of online operations. 2. Industry analysis First of all let’s take a look at Porter’s model: the main barrier to entry has been built by the firm, implementing a very diversified financial services strategy, and finally being involved in more than 70 different businesses. This is very difficult to implement,

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