Well Fargo

A. Brief abstract / overview of case study Abstract The purpose of this paper is to answer the following questions: How should Wells Fargo Position it self for the future? Should it strengthen its retail presence, grow internationally, or move into the void created by the disappearance of investment banks? Develop Projected Financial Statements that fully assess and evaluate the impact of the proposed strategy. How are the acquisitions / growth financed? Will debt be increased further, or ownership of WFC stock be diluted to raise the capital needed?The author will attempt to answer these questions using chart sand graphs as illustrations and supporting evidence Overview case The paper submitted will contain a proposed plan of action using primarily data from Morning start oshowa proposed acquisition for Wells Fargo. This acquisition will greatly increase the Wealth, Brokerage, & Retirement segment of Wells Fargo that has been underutilized and overlooked. This proposal will â€Å"m arry† the benefits of TDA meritrade with the Cross-selling strength of Wells Fargo.The primary purpose that TDA meritrade was selected was convenience. Although Charles Schwa band E *TRADE are competitors of TDA meritrade, but they were not selected for varying reasons. Charles Schwabhasa history of refusing overtures for take overs after his disappointing episode of being bought up by a large corporation many years ago. E*TRADE, whom some experts consider having a high erupt side than TDA meritrade, is not nearly as stable or financially sound.Given the current economic uncertainty and the authors’ penchant for avoiding risk, TDA meritrade is the best option available of the large independent retail brokerages. According to Zacks Equity Research, an interesting side note is â€Å"that Wells Capital Management, the wholly owned institutional asset management subsidiary of Wells Fargo Bank, N. A. , and part of Wells Fargo’s Asset Management Group† (Zacks Eq uity Research, 2011) already owns about 2. 58% of TDA meritrade. (Morningstar. com, 2012) How should Wells Fargo Position it self for the future?Wells Fargo can position it self for the future by capitalizing on its one-stop shopping format for all financial products. Already with one of the highest cross-selling ratios in the world at 5. 81 products per banking household†¦Ã¢â‚¬  this number can and should go higher in the not too distant future. (APAeditorial, 2009) B. Vision Statement To satisfy all of the customers’ financial needs, help them succeed financially, be known as one of America’s great companies and the number-one financial services provider in each market C.Mission Statement We want to satisfy all of our customers' financial needs, help them succeed financially, be the premier provider of financial services in every one of our markets, and be known as one of America's great companies. Wells Fargo is committed to strengthening the company and the c ommunities by proactively seeking minority, women, and disabled – owned suppliers, Wells Fargo strongly believe that Wells Fargo’s suppliers must reflect the diversity of team members, customers, and communities.Proactively seek to procure goods and services from minority, women, and disabled-owned businesses. Our Supplier Diversity team assists these businesses to access bid and contract opportunities through a combination of which is actively seek to establish relationships with diverse suppliers through business networking, electronic and print communications, and participation in supplier event nationwide. We encourage and assist suppliers to gain certification of their minority, women, or disabled- owned business status from independent local and national agencies.The Supplier Diversity team advises and guides diverse suppliers to prepare and position their businesses for maximum access to bid and contract opportunities. We actively communicate with minority, wome n, and disabled-owned suppliers, referring relevant Requests for Proposal and other potential business leads. Internally, the Supplier Diversity team works to ensure that diverse suppliers are represented and considered by Wells Fargo purchasing managers in all sourcing, contracting and procurement decisions. Wells Fargo SWOT * STRENGTH 1.Strong national presence and credible reputation (Strong brand) 2. Widely recognized as industry and market share leader (Industry leader) 3. Servicing for more than 25 million customers through over 6000 stores, the Internet, and other distribution channel across North America and elsewhere internationally (Worldwide service) 4. Values its people as its competitive advantage (Strong HR & management team) 5. Values and treats its customer as friends (Loyal customers) 6. Leading innovator in the use of internet and e-commerce (Online growth) 7.Strong balance sheet and the ability to steer through the pitfalls that plagued its competitors (Strong fin ancial position) * WEAKNESS 1. The Wachovia Bank subprime mortgage problems (Over leveraged financial position) 2. Overcommitted in credit swap (Over leveraged financial position) 3. The reduction of Wells Fargo’s debt rating two levels during January 2009 (Weak capital position) 4. Cut its dividend payment in a move to attempt to solidify its balance sheet (Diseconomies of scale) 5.Wells Fargo basically did no securities business after merger (Not diversified) 6. Too much focus on consumer/retail banking (Not diversified) 7. Weak International growth OPPORTUNITIES 1. Increasing its extensiveness through mergers and acquisitions with recently owned Wachovia or with other new bank (M&A opportunities) 2. Growth and success of combined Wachovia and Wells Fargo will be one of the great financial services company (National growth) 3. Move the large national bank with an international presence forward or expansion abroad (International growth) 4.The disappearance of investment bank ing and the Wells Fargo’s announcement to significantly expand its security business (Product & service diversification) 5. The use of internet banking and e-commerce (Online growth) Threats 1. Rising interest rates in US. 2. Basel II and compliance costs. 3. Consolidation in banking industry. 4. Competitive Matrix Profile. 5. Consolidation in the US banking industry. 6. Regulation on contingent commission. 7. Rising incident of online scam. 8. Meltdown in US Asset backed Securities market.