10K Project WF Essay

Submitted By Grogank1
Words: 3389
Pages: 14

10-K Project

Lee Anne Cravey
Martin Friedman
Kelly Grogan
Lisa Harris
Carolina Mlynarczyk

Wells Fargo

Monday, February 23, 2015

PESTEL Framework for Wells Fargo
1. Political:
“Proposals that further increase regulation of the financial services industry have been and are expected to continue to be introduced in the U.S. Congress, in state legislatures and abroad.” (Page 7)

As the focus on financial market regulation continues to increase, Wells Fargo has to adjust their operations accordingly to stay in compliance. As they are adjusting their business operations, additional legislative regulations can be introduced and possibly affect the organization’s performance in sustainability in competition and profitability.

2. Economic:
“We are particularly affected by the policies of the FRB, which regulates the supply of money and credit in the United States.” (Page 6)

When the Federal Reserve makes an adjustment to the financial policies, the impact can either increase or decrease consumer spending. If consumer spending decreases, competition for Wells Fargo may increase. The FRB’s influential financial policies can indirectly determine how investors may contribute capital funds and/or purchasing stocks in the corporation. For example, when the interest rate is increased, consumers will have decreased purchasing power and will decrease their spending power.

3. Sociocultural:
There is no finding of sociocultural impact in the 10-K.

4. Technological:
“The financial services industry is also likely to become more competitive as further technological advances enable more companies to provide financial services. These technological advances may diminish the importance of depository institutions and other financial intermediaries in the transfer of funds between parties.” (Page 1)

We definitely think that this could negatively affect Wells Fargo and their competitive advantage in the marketplace. As our society becomes more and more technologically inclined, the competition for providing financial services becomes more intense. This may require Wells Fargo to incur substantial expenditures to improve, modify and adapt their existing products and services so that they can maintain their loyal customers. This may also include spending significant funds to protect themselves and their customers against the ever-growing cyber threats.

5. Legal:
“If the FRB and FDIC determine that our resolution plan is deficient, the Dodd-Frank Act authorizes the FRB and FDIC to impose more stringent capital, leverage, or liquidity requirements on us or restrict our growth or activities…” (Page 4)
Like almost all of the legal components in this 10-K, this statement is also related to reporting and compliance. If Wells Fargo’s activities in this regard are not sufficient, the federal government will step in and impose measures of their own. These measures could make a substantial difference to Wells Fargo’s bottom line and put them at a disadvantage as opposed to their competitors.

6. Environmental:
There is no finding of environmental impact in the 10-K.

Porter’s Six Forces for Wells Fargo
7. Current competitors (and intensity of rivalry among them):
“The financial services industry is highly competitive. Our subsidiaries compete with financial services providers such as banks, savings and loan associations, credit unions, finance companies, mortgage banking companies, insurance companies, investment banks and mutual fund companies. They also face increased competition from nonbank institutions such as brokerage houses, as well as from financial services subsidiaries of commercial and manufacturing companies.” (Page 2)

There is a lot of competition from financial institutions in America that Wells Fargo faces, and all of it is very fierce. Since Wells Fargo’s business covers so many different financial services they are forced to compete with companies that specialize in just one facet of their business. One…