Wells Fargo Case Study

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Wells Fargo operates in the broadly-conceived banking industry; competitors include JP Morgan Chase, Bank of America, Citigroup, and US Bancorp. Wells Fargo reports in three different lines of business: Community Banking, Wholesale Banking, and Wells Fargo Financial. The core of Well’s strategy is “cross-selling”; It has an overall goal of 8 products per banking relationship. The Wachovia-Wells Fargo merger made wells now nationwide scope. Industry life cycle: Mature. Industry growth rate has slowed to that of the overall economy. The number of banks declines. Products and services are standard. High entry barriers. Potter’s model: 1. Threat of entry: Low It is unlikely that new competitors will enter the mature market with the global economic crisis. Banking requires significant capital according to Basel iii. Huge technological and cultural challenges associated with diversification in the industry become the entry barriers. Stability and trust are important in banking industry, entering the industry with no brand name and compete effectively would be difficult. 2. Threat of Substitutes : Moderate There are many options for different financing needs, finance companies, mortgage companies, insurance companies, etc. However, many people will still go to a bank for deposit and major financing needs. 3. The power of buyers: Moderate-High Buyers for banks are clients who take loans or other forms of financing, and pay interest for the financing. There are many banks that offer similar products which give some power to the buyers. Buyers can always look for the best deals so they will explore all the options available to them from other institutions. 4. The power of suppliers: Moderate Suppliers to banks basically are the depositors that supply the capital banks use to lend. There are many banks that individuals and companies can

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