Please read the Business Paper Instructions.docx for detailed instructions. Please utilize the Business Paper Outline_Wells Fargo.docx to write the business paper. Additionally, refer to the Executive Summary_Information Literacy Communication Expectations.docx for the executive portion of the business paper. THANK YOU!
BUSINESS PAPER INSTRUCTIONS WELLS FARGO & COMPANY Use the paper outline provided and turn it into a business paper. Additionally, incorporating a one-page executive summary. Please follow the instructions below to finish the business paper: I. Business Paper is to be about 4 pages but no more than 5 pages: · APA format, 12 font-size & double spaced II. Incorporate a one-page executive summary into the business paper. Executive summary should be the first page and should not bleed over to page 2. Refer to the guidelines .docx provided on how to write an executive summary: · Executive Summary_Information Literacy Communication Expectations.docx III. Utilize Paper Outline Provided as reference to write paper: · Paper Outline_Wells Fargo Bank.docx IV. You are also allowed to use additional external sources other than those provided in the outline. V. Make sure the paper “reads smoothly”. It shouldn’t feel overly redundant moving from section to section and should be able to refer to details provided elsewhere in the paper. · THANK YOU! FINAL PAPER OUTLINE Steve Gallegos I. EXECUTIVE SUMMARY (1 PAGE MAX) · Executive Summary_Information Literacy Communication Expectations.docx II. COMPANY SELECTION · COMPANY NAME Wells Fargo & Company · BRIEF COMPANY HISTORY Founded on March 18th, 1852, in NYC, Henry Wells and William G. Fargo came together with a few financial backers to start up their namesake business that would become on of America’s biggest bank, in fact – worldwide. During the mid-1800’s in California, it was known as the gold rush and this enormous spike in gold caught the attention of Wells and Fargo and by 1852, they would make deliveries from the East coast to mining camps spread throughout northern California. With the aid of stagecoach organizations which gave the quickest mode of transportation of gold dust, significant archives and other important cargo, Wells and Fargo’s company filled in as a “bank” – purchasing gold dust and selling paper bank drafts, giving credits to assist powering California’s developing economy. By 1857, Wells, Fargo and Co. would form the Overland Mail Company, aka “Butterfield Line”, that standardize mail, travel administration and developing number of courses. This would procure them as a dependable and solid business and thus, their logo became the “stagecoach” we know today. For those who could afford it, they would even send representatives riding a horse to deliver messages and packages as a service. As their business grew, they converged with other stagecoach business or “Pony Express” lines and by 1866, they were the unparalleled innovator in transportation in the West. As soon as the cross-country railroad was finished, they would soon also start utilizing it to ship cargo. By the early 1900’s, their transportation network associated 6000 areas all throughout the United States. From 1905, they would part ways from the cargo business and step into the realm of solely financial. The organization merged with Nevada National Bank and set up their new central command in San Francisco, California. After two later consolidation, ‘Wells Fargo Bank American Trust Company’ simply became ‘Wells Fargo Bank’ and has become one of the biggest establishments in the US. · WHY I CHOSE THIS COMPANY I chose this company because this was the first bank I worked for. Hired as a ‘bank teller’ back in 2010, I quickly got promoted to ‘personal banker’ within 6 months of being hired. This would shape how I ultimately would interact with customers or consumers, and my view on cooperate banking (as a whole). Though I would move away from Wells Fargo within 2 years to work for U.S. Bank, the experiences I’ve learned from working with the company is something I still hold dear. · WHAT I HOPE TO LEARN FROM THIS COMPANY Though I have some insight to what it was to work for them, I hope to learn more about the company’s intricacies. The company I worked for has drastically change especially since after their 2016 scandal. III. INDUSTRY ANALYSIS · COMPANY INDUSTRY · (IBIS World/NAICS) Report 52211 - Commercial Banking in the US · (Passport) Market Sizes Report – Consumer Lending North America & USA · TOTAL INDUSTRY SIZE · Market Size (Revenue): $703bn · Number of Businesses: 71,120 · Employment: 1,839,897 · PRIMARY COMPETITORS · JPMorgan Chase & Co. – 8.3% Market Share · Wells Fargo & Co. – 6.5% Market Share · Bank of America & Co. – 5.0% Market Share · Citigroup Inc. – 2.0% Market Share · MARKET SHARE, TOTAL REVENUES, AND PROFITS (COMPANY & COMPETITOR) · Wells Fargo & Co. (Revenue 2021) - $52,284.7m · Expected to decrease its industry-specific revenue by an annualized rate of 9.9% over the next five years. This is due to the declining net interest during the period. Wells Fargo also has had decline in its pretax income, result of the fines and expenses from its recent scandal, couple with lower net interest margins. Of course, 2020’s COVID-19 has also been hampered by declining loan volumes and interest rates. · JPMorgan Chase & Co. (Revenue 2021) - $58,743.8 · Expected to increase its industry-specific revenue by an annualized rate of 2.2%. Its consumer and community banking segments both grew each year since 2016 – 2019, due to rising interest rates. However, due to 2020s COVID-19, it has experience lower interest income rates because of the Federal Reverse lowering rates. IV. SITUATION ANALYSIS · COMPANY’S MISSION/VISION STATEMENT · “We want to satisfy out customer’s financial needs and help them succeed financially.” · Their mission statement relates to help clients for their financial achievement and to fulfill their financial necessities. These points are being accomplished through the organization's assortment of administrations and services. · RECENT 10K ANNUAL REPORT · Wells Fargo & Company 2020 Annual Report · (pg.33 – pg.235) · SWOT MATRIX TABLE STENGTHS WEAKNESS GLOBAL PRESENCE Working all around the world is a significant strength since the organization gains admittance to a more profound pool of potential clients. Wells Fargo works internationally from America to Europe, the Middle East, Africa, and Asia. VARIETY OF SERVICES The bank offers a wide assortment of section explicit administrations that consider the whole market. It offers banking, credits, protection, shipper administrations, web based financial administrations, contributing, and so on considering each of the three segments: personal, business, and small industries. MAJOR SCANDAL In 2016, it was publicly known that Wells Fargo's representatives/bankers opened many account / records utilizing the names of clients without their consent to meet deals standards. The bank ultimately consented to pay a $3 billion fine as settlement. This is known as the ‘Fake Account Scandal’ and has negatively impacted their ‘brand equity’. AGING SYSTEMS Technology has been rapidly changing; however, some companies have had a harder time implementing and updating to more sophisticated systems. For years, Wells Fargo has struggled to maintain their outdated banking system, which is making it harder for the bank to satisfy regulators. Old system means system-crashes and system-downtime which negatively impacts customers’ satisfaction. OPPORTUNITIES THREATS EXPANDING IN EMERGING ECONOMIES Wells Fargo has workplaces in 13 areas just across EMEA and doesn't cater to retail or independent business clients outside the US. It can extend its tasks in Africa and Asia to take advantage of chances for development. DIVERSIFY PORTFOLIO The banking sector is amazingly unpredictable to a wide scope of complex and covering issues. The danger of failing is a lot higher than in different areas. Wells Fargo can ensure its advantage by differentiating into steady and developing businesses. INTENSE COMPETITION The banking sector is exceptionally cutthroat and dynamic with others going all over consistently as contenders develop further. Wells Fargo lost its portion of the overall industry in loaning to business and modern clients to JP Morgan and Bank of America. Not to mention the rise of ‘online-only’ banks, making traditional making almost cumbersome. PUBLIC PERCEPTION It is truly challenging to recover the public's trust whenever it has been lost. With such countless embarrassments hounding Wells Fargo, the bank can lose the majority of its clients alongside billions of dollars in stores if there should arise an occurrence of even problematic claims. V. DATA ANALYSIS · 2020 Foreign Exchange Risk Management Survey - Wells Fargo (wf.com) VI. ROOT CAUSE ANALYSIS · Wells Fargo has gone from one of America's strongest banks to effectively the most vulnerable. For quite a long time, Wells Fargo's rundown of outrages and lawful issues transitorily affected its once-massive bottom line, not any longer. Wells Fargo is the only major lender during the pandemic to lose money - its first misfortune since the 2008 recession. Also, that dip was driven in enormous part by the devastating penalties forced 2 years prior by the Federal Reserve for mishandling clients. Wells Fargo is in such a wreck that it's being compelled to cut its dividend profits. During the Great Recession, Wells Fargo was solid to the point that it was among the last of the banks to cut its profits. Today, it's the first. All banks (aside from perhaps Goldman Sachs) are in disarray as a result of the pandemic, which has caused mass joblessness, flooding insolvencies and a dip in GDP. Yet, the way that Wells Fargo is harming far beyond its competitors is its own shortcoming. Wells Fargo's portion cost has imploded by a stunning 54% this year. Other banks including JPMorgan Chase and Bank of America are down by around 30%. · FISHBONE DIAGRAM VII. POSSIBLE SOLUTIONS · Reduce Costs · WFB has a bloated management structure, it pays too much for 3rd-party consultants, and there is an opportunity with online banking · Reducing costs will improve the bank’s efficiency ratio · Will prevent jobs being cut · Closing branches doesn’t necessarily have to mean bad business – adopting an online only banking system could work for them as everything is moving to virtual banking · As of 9/30/21, WFB stood at 78.7% while competitors stood at 56% (JPM) & 63.1 (BAC) · Redefine the Brand · The Fake-Account scandal negatively impacted Wells Fargo’s brand equity · Change company’s culture, after all – this is what lead to bankers to open such accounts due to unrealistic sales goals · Cultural transformation (both internally and externally) will allow employees to feel as if they’re being taken care of and clients feel secure and safe about their money being with WFB · Remove unfit leadership & put customers’ needs first (no more hawking products down customers’ throat) · Create communications that focuses on WFB core and values VIII. RECOMMENDATION · It’s imperative that WFB repairs its public image. WFB must be able to keep retention and bring in new accounts, but if the bank’s reputation is stained it will continue to struggle. Everything else won’t matter if there are no customers. That is why I weighed