In 1852, Henry well and William Fargo founded a financial service company which has grown into one of the biggest company in west America, and other parts of the world. This heritage still exists up to today as part of Wells Fargos identity. Today, the company is the second largest bank by capitalization and third largest bank in the United States by assets. Wells Fargo& Co. is a bank holding company that participates in the provision of insurance, investment, mortgage, insurance, investments, banking and commercial finance. The company operates in three different business segment when reporting its results; community banking segment, wealth investment management and wholesale banking. Wholesale banking segment comprises of products that are sold to large and middle market commercials companies. Some of these products include real estate banking product, cash management, and capital markets. Community Banking comprises of Consumer Deposit Group, Regional Banking and diversified products. The segment offers investment management, security brokerage and provides financial products to consumers. Lastly, Wealth Investment Management is a segment where the company uses planning approach to fulfil the needs of its customer through the provision of a wide variety of financial advisory services to the customers Wells (Wells Fargo & Co.2004).
The values of Wells Fargo guides every decision, conversation and the way the company interacts with its clients. The companys values anchors on every service and product the company offers in every market it operates. The company has linked what it is doing to one of its values in order to understand why it is in business. The key foundation of Wells Fargo strategy is the companys unwavering focus on customers. Such strategy guides the firm to be successful in navigating the challenges in the business environment and doing what is good to its customers even with the increased competition. Such strategy enables the company to be different from the competitors, prioritize its effort and eventually creates a long lasting value to customers, communities and shareholders (Wells, 2015).
For more than 160 year, Wells Fargo has focused on a culture of working to help the customers. Central to the companys culture includes caring to workforce that is ready to sacrifice much of its time to listen a genuinely understand and have sympathy during difficult period. In addition, another mindset which is central to the companys culture is Can-do attitude, whereby employees want to go further to perform what is right, look for options that are achievable and better every moment to make it lasting. The company is also committed in providing a good working environment for its employees. Furthermore, with the changing trends in business, the company has made sure that employees get enough training in order to update their skills to meet the demand of the market.
Wells Fargo strength lies in its extensive distribution network that has enabled it to become among top 20 financial services firm in the United States the company offers banking, investments, mortgage, insurances and consumer finance through its distribution network. The company operates 2400, mortgage stores, 1,078, consumer finance and owns 567 supermarket stores in the United States. Wells Fargo has shown its dominance in the US in more than 23 states with the total of 3,318 banking store making it the third largest regarding banking stores. The company controls a frequency of 20 million calls every month thus becoming one of one of the biggest telephone banking network. Also, the company is third regarding ATM outlets in the United States with more than 6900 ATMs distributed all over the country. In the Wells banking Fargo state, the company, Wells Fargo enjoys the largest personal credit share (John,2016).
The company has a strong credit discipline which has been endorsed by credit rating agencies. Wells Fargo does not involve brokers in its debt consolidation business. 2015 and 2016 years were dominated with excessive risk taking yet the company maintained a credit risk discipline which was realistically useful. As compared to its competitors, the company made no adjustable-rate mortgages. The company also have a diversified its distribution across the segments. Diversity is the companys services that have enabled it to fulfill the financial needs of the customer and at the same time reach more new customers, something that has earned them more revenue. The company has been able to minimize earning volatility as every service has a contribution to the overall revenue. Cross-selling is another strength that Wells Fargo enjoy as the company has focused on reaching the customers on different platforms by using its product line and rewards client for purchasing more services. The company remains a leader in cross-selling, for example, in 2015, the cross-selling strategy enabled the firm to grow average loans by 18% over 2014, asset under managed by 12% core deposit by 15%, mortgage servicing fees by18% as well as insurance premium which stood at 15%. The company focuses on exploiting every segment to achieve a cross-sell of eight products per client, which is at the moment, half of its projected likely demand (John,2016)..
The companys primary weakness lies in its weakening asset quality amid high real estate exposure. The companys asset are no longer stronger as compared to how strong they were before the economic crisis. One of the primary reason is the declining housing market. Another weakness is the limited international presence. The company is one of largest firms in a financial service industry in the United States, with such a reputation yet it lacks global exposure, this becomes the weakness. As at the end December 2015, the value of the assets stood at % 584.45 billion. Furthermore, the company had deposits in the foreign offices which accounted for 9.2% of earnings asset, at the same, loans in foreign offices accounted 1.6% of earnings assets of the company. Such volatile in earnings meant that the company failed to balance between its foreign assets and liabilities. The company also has little presence in the in the US since it has mostly focused on in the southeast and Midwest. Notably, with the growing of markets such as Europe and Asia-Pacific, the company have not intentions of venturing into such.
Even with Well Fargo strength and weakness, the company also has opportunities for venturing into markets such as Europe and Asia-pacific countries since the company has the limited international presence. With the frequent changes in technology, this is an opportunity for Well Fargo. For instance, some payments in the United States banking system are being carried out through a network of check imaging systems which are cost effective especially for lower dollars. Since the installation of the check imaging system, Well Fargo processed $ 70 billion through the system. The check imaging system for Well Fargo includes the Fargo electronic deposit which is a totally internet based deposit service that allows customers to deposit remotely.
Another opportunity is the growing immigration of different groups of people to the United States. America has become a hoard of races which account for half the growth of the labor force since the 1990s.Such a culturally diverse market provide the company with alternatives of coming up with different programs to exploit such a market. For, example, four years ago, Wells Fargo has partnered with embassies in Asia and the Unites States consulates to provide financial information to Asian who are intending to come to America. The company has focused on customizing the banking stores to reflect the culture and background of various groups while offering the much needed financial services. Another opportunity is that there is growth in the commercial banking industry as more companies and individuals need more financial support to survive in the challenging market. In 2015, the US commercial banking sector generated a total revenue of $560 billion (Wells, 2015).
The company continues to face a lot of threats such continues completion from its competitors such as JPMorgan and major U.S banks. There is also meltdown in US asset-backed securities markets. This relates to meltdown where the income payments and the value come from a particular asset, which cannot be individually sold. Consolidation in the US banking industry is also a significant threat. As such, some companies have collapsed due to uncertainty. Lastly, the rising incidents of online scams, fraud, and identity as a result of technological advancements has proved to be a major threat.
The company has been in existence for more than 160 years, and this gives it enough experience to cope up with the rising challenges in the business environment. The company has relied more on the domestic market, and I think it is the highest time for Wells Fargo to expand its market to other different markets as it has the much-needed capability to prosper regardless of the challenges being experienced. Availability of growing financial market globally should be a wake-up call for Well Fargo. I like the companys culture which focuses on customers needs. The company has prioritized its customers before any other thing. However, Wells Fargo should find out why weaknesses such as low customer satisfaction are being experienced even with such a strong culture. The distribution network of the company in the United States in one of the best, if Wells Fargo uses the same formulae in other countries (Wells,2015). I will reach more customers in every global market it intends to exploit.
Company II: Bank of Africa
Background, Product, and Service, Company Relationships, & Culture
BOA was established in 1982 in Mali by local businessmen. The primary reason for the establishment of BOA was to address the scarcity of banking services for individuals and the local business. The company services then spread out to entire French colonies in West Africa without any external support. In 1988, BOA Mali led to the establishment of a holding company namely African Financial Holding whose aim was to promote the establishment of Banking subsidiaries in the entire continent which eventually became successful as BOA now operates in more than17 countries. The bank offers various products and services such as transfer of currency exchange, T-cash, travelers claques and BOA Express. The Bank also offers mobile money transfer that enables customers to use mobile phones to send and receive money easily, such as Airtel money transfer. The bank provides insurance services such as ambition insurance, education insurance, and retirement insurance. BOA offers loans to both individuals and businesses at low interest rates especially to banks account holders. BOA is built on the values of tolerance and sharing and at the same time is driven by the multicultural team across a wide geographical region. The bank is reaching in human diversity as the employees come from different parts with enough experiences and expertise the bank has a strong presence in both the private and public sectors in every country it operates and makes a contribution to the economic growth. The bank further provides enough security to the local community, and this is one of its highest priority (Bank of Africa Group n.d).
The Bank of Africa has some strengths that have enabled it to survive in the current challenging banking industry. Diversification of operation is the major advantage as the bank can offer a broad range of products and services that have enabled it to meet a various need in the banking sector. BOA provides some services such as personal loans, saving and investment schemes, insurance among...
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