- 1 Wells Fargo SWOT Analysis 2022
- 2 Background of Wells Fargo
- 3 Introduction to Wells Fargo
- 4 Strengths In The SWOT Analysis Of Wells Fargo
- 5 Weaknesses In The SWOT Analysis Of Wells Fargo
- 6 Opportunities In The SWOT Analysis Of Wells Fargo
- 7 Threats In The SWOT Analysis Of Wells Fargo
- 8 Limitations of SWOT Analysis for Wells Fargo
- 9 Weighted SWOT Analysis of Wells Fargo
- 10 Recommendation
- 11 Conclusion
Wells Fargo SWOT Analysis 2022
This is a thorough SWOT review for Wells Fargo. It is designed to analyze the strengths and weak points that exist in Wells Fargo.
It also analyzes the threats and opportunities the bank is likely to be facing today and in the future.
Wells Fargo is an American multinational company in the field of financial services located in San Francisco, California.
Background of Wells Fargo
|Company Name||Wells Fargo & Company|
|Company Type||Financial Service|
|Annual Revenue||The U.S $85.063 billion (2019)|
|Founders||Henry Wells, William Fargo|
|Headquarters||San Francisco, California (Corporate) Manhattan (Operational)|
Introduction to Wells Fargo
To conduct the Wells Fargo SWOT review It is essential to understand the company’s plans for the future and past.
Wells Fargo & Company is an international financial services firm located in America and is among the most respected international financial institutions.
It is regarded as the fourth most successful institution in the U.S.A in terms of total assets. It’s in the 30th in total revenue in 2020’s Fortune 500 rankings.
It’s a merger between the Minneapolis-based Norwest Corporation and San Francisco-based Wells Fargo & Company.
The company defines Community banking, Wholesale banking, commercial, retail corporate banking, brokerage, wealth, and retirement.
Strengths In The SWOT Analysis Of Wells Fargo
The ability to assess the strengths of a firm is an important element in its SWOT assessment. The business must be conscious of its strengths, as these features have helped them gain a name in the marketplace.
The company should bear the fact that it should not overlook its strengths when trying to improve its weaknesses or new opportunities. Similar to other brands, Wells Fargo Market also has certain advantages:
❤️ Segment-specific services: The company caters to three main segments, namely commercial, personal and small-sized industries. It offers specific services to each. For consumers that fall into the personal category, the list of offerings includes loans, banking, insurance, credit, investing, and retirement, as well as wealth-management as well as rewards and benefits. In the commercial sector, Wells Fargo offers loans as well as insurance for the owner along with assets and merchant services, credit facilities, and online banking services. They also provide all-hours customer support and more. In the small industry segment, their list of services includes credit, banking, and loans as well as insurance, merchant services, and payroll, as well other services.
❤️ business philosophy: The business philosophy of the company Wells Fargo is centered around five key values that form the foundation for all that the financial services business is involved in. These values include attention to customer service, consideration for individuals are the most significant factor in competitive advantages, and the ethical standards that are high, transparency, diversity and inclusion, and leadership.
❤️ Acquisitions One of the assets that are a strength of Wells Fargo is the series of regional acquisitions it has completed. A few of them include the amalgamation of Wells Fargo and the Norwest Corp. which is headquartered in Minneapolis as well as the takeover from East Coast giant Wachovia in 2008 and many more. The acquisitions increased the number of customers they serve within the US to more than 70 million.
❤️ Customers from all income levels: Wells Fargo has customers of all income categories. In the economy, customers can avail services like credit cards as well as bank accounts, loans, and more. The higher income group is focused on services like brokerage, wealth, and retirement services. Wells Fargo also offers services like financial support services including taxation, as well as underwriting services.
❤️ Retail and wholesale bank: The financial services provider Wells Frago takes up wholesale banking services such as equipment financing crops insurance, energy syndicated loans commercial real estate, etc. It also manages the retail banking aspect of banking, such as credit, bank loans, debit cards,
❤️ Community Banking Services: Wells Fargo has community banking options such as credit cards account, debit cards, bank accounts as well as loan management, accounts, and more. Although it might seem like regular community banking is among the most profitable segments within the banking institution.
Weaknesses In The SWOT Analysis Of Wells Fargo
In any business, it is quite normal to have a few weaknesses. Businesses must come up with ways to eliminate those flaws.
If a business is in an environment of competition every weakness could affect the company’s growth when compared to its competitors.
The business can develop long-term strategies to turn weaknesses into strengths. Wells Fargo also has some shortcomings. It is a good example:
❤️ Major Scandal In 2016, it was discovered that employees of Wells Fargo opened millions of accounts with customers’ names without their permission to achieve sales targets. The bank ultimately accepted an amount of $3 billion in a settlement.
❤️ Unrealized Opportunities In retribution for the fraud scandal involving the fake account, Federal Reserve capped how many loans Wells Fargo could give out. The bank surpassed its limit in the distribution of PPP, leaving the majority of its small business customers missing millions in assistance.
❤️ System Aging: For years, Wells Fargo has struggled to modernize its old banking system, making it more difficult for them to please regulators. Additionally, the older systems are more susceptible to failure, making it difficult for key operations to continue and frustrating customers.
❤️ Negative Publicity The most faithful customers may switch to competitors if the institution is accused of using relief assistance to make profits in the midst of a crisis. Wells Fargo is under investigation over its distribution of PPP designed to aid small businesses affected by pandemics. The bank needs to invest some effort to rebuild its confidence or be at risk of losing them to competitors.
❤️ High Operating Costs In the wake of billions lost to the aging machinery or being repaid as settlements, Wells Fargo’s own injuries have increased the operating expenses. This reduces its profitability and long-term viability.
Opportunities In The SWOT Analysis Of Wells Fargo
A business must think about the opportunities they could be able to take advantage of to beat the market competition.
They should formulate their policies in line with these opportunities to ensure that they grow in the near future.
They must also take into consideration the current market conditions when determining their opportunities. Here are a few opportunities that are available to Wells Fargo:
❤️ The bank is able to continue improving its commercial and industrial lending. Its potential has been lost over its competitors in recent years;
❤️ The bank should also make use of this opportunity to increase the number of branches it has and expand its operations beyond Asia as well as Africa and focus on the growth of its business.
❤️ The banking industry is volatile, wells Fargo must protect interests by diversifying into an expanding and stable industry to prevent bankruptcy
❤️ Wells Fargo has successfully dominated and taken over major cities across the globe. Now, it’s time to target smaller towns and offer banking services in those towns.
Threats In The SWOT Analysis Of Wells Fargo
Every company that is successful in a market that is competitive will face threats that could hamper its expansion. Competitive competitors’ changes in market conditions and customer preferences can be significant threats. A well-known brand such as Wells Fargo also has some risks:
❤️ The dangers from Wells Fargo are to be carefully considered. This recession in the world has devastated and damaged the economy. It can also affect the company in a negative way since mortgages and customers are in default on loans.
❤️ When it’s lost, the public trust can be difficult to restore. Because of the accusations and scandals that could result in the loss of clients and millions of dollars in the form of deposits.
❤️ The stability and performance of a bank rely on the business and individuals. The pandemic in the world has reduced the bank’s profits by 89%.
❤️ It is plagued by loan limits due to the fraudulent account scandal. The bank is not able to be a part of the small-business relief program or PPP as a result of the government’s decision;
❤️ The loss of market share to its competitors is a real danger in the real sense.
Limitations of SWOT Analysis for Wells Fargo
While SWOT analysis is a popular tool for strategic planning, SWOT analysis is extensively used to plan strategic strategies However, it has its fair share of drawbacks.
- Certain abilities or aspects of an organization can be both a strength as well as a weak point at the same. This is among the most important limitations in SWOT analyses. For instance, changing environmental regulations can be a threat for companies, but as well as an opportunity in the sense that it allows the company to compete in a position to compete with its competitors or gain an advantage over its competitors when it is could develop its product more quickly than its competitors.
- SWOT is not able to show you how to get a competitive edge It is not a strategy to gain a competitive advantage, therefore it should not be considered a solution in and of itself.
- The matrix is merely an idea to begin discussions on how the suggested strategies might be implemented. It offered an evaluation window, but it did not provide any implementation plan that is based on its strategic competitiveness. Wells Fargo
- It is a static evaluation that analyzes the existing conditions and a small number of potential modifications. When circumstances, capabilities threats, strategies, and circumstances alter, the dynamic of the competitive landscape cannot be analyzed in one single matrix.
- SWOT analysis could cause a company to focus too much on one external or internal element in formulating strategies. There are interrelations among important external and internal aspects that SWOT doesn’t reveal, which could be crucial in determining strategies.
Weighted SWOT Analysis of Wells Fargo
Given the above-identified shortcomings of the SWOT analysis/ matrix, the corporate management has decided to assign the weightage to every internal strength and weakness of the company.
They also consider the likeliness of events happening in the near future, and the impact they will be on the company’s performance.
This technique is known as a weighted SWOT analysis. It’s better than a simple SWOT analysis as With a weighted SWOT analysis Wells Fargo managers can focus on the most crucial aspects and eliminate the less important ones.
This also helps solve the problem of a long list that causes organizations to make an extensive list, but none of the items are considered crucial.
Based on the previous analysis It is suggested that the company concentrate on the development of a product that is comparable to competitors that have introduced a couple of changes and are focusing their attention on geographic expansions.
The reasons for recommending the introduction of a comparable product that has only minor changes would allow the company to draw more customers in and expand the product portfolio of the business.
The few changes would provide protection for the business from legal obligations. With a growing business company, it would have the ability to expand its customer base and find an additional market for its product.
This will ultimately increase the sales and profitability of the business and provide an advantage for the business.
References / Citations & Bibliography
- M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
- A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
- O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
- L. Wrigley, Divisional Autonomy and Diversification (Ph.D., Harvard Business School, 1970)
- R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)
After conducting a comprehensive investigation of the SWOT study for Wells Fargo, we’ve concluded that Wells Fargo is indeed the most reputable financial institution in the world.
The economic downturn and lawsuits, rising costs and a negative image in the public eye and scandals are a few of the major problems. Wells Fargo should expand its portfolio and market, and be able to avoid costly lawsuits.