Fins 5530 Wells Fargo’s Strategy

FINS 5530

Assignment 1

[pic 1]

Xuankang Chen

Z5175530

Contents

Attempted Answers to Case Questions        2

Question 1        2

Question 2        2

Question 3        3

Wells Fargo        4

Community Banking Strategies        5

1.Accessible to Households        5

2.Cross-Selling        5

3.Rewards and Pressure        6

Raise of Misbehaviour        6

1. Culture - Sales Speak Louder        6

2.Incentives – Sales Rewarding System        7

3.Pressure – Management by Measurement        7

Peers Comparison        8

Damages        8

References        9

Attempted Answers to Case Questions

Question 1

What was Wells Fargo’s strategy for competing in the community banking area? (3 marks)

1. Wells Fargo has a well-developed infrastructure to provide households easy access to their facilities, and by doing so, people are willing to use Wells Fargo’s services because it is

convenient.

1. Cross-Selling of financial products to its existing customers maintain a good customer relationship as well as provide monetary discounts and convenience. People are willing to purchase new services with familiar locations and staff as well as a history of trust.

1. Both rewards and pressures stimulate employees. On the one hand, they receive monetary bonus and promotion opportunities for better performance. On the other hand, they are facing high pressure for missing sale goals. These two strategies improve employees working efficiency.

Question 2

An anonymous senior executive of Wells Fargo has been quoted as saying regarding the misconduct document in this case, “While our actions might be considered by some to be wrong, we were acting in the best interests of our shareholders. Just look at the share price performance.” Based on the information provided in the case and its appendices, what is your opinion on this statement? (3 marks)