Wells Fargo

Assignment Content

Use your selected company from Weeks 1-2 for this week’s assessment.

A primary technique of deeper analysis of an organization is the Porter’s Five Forces Model. This technique is often used when looking at your competitive advantage. Looking at your competitive advantage is important to aligning your operational needs with your business strategies.

Review sources on your company. Analyze the company using Porter’s Five Forces.

Write a 2- to 3-page proposal to the company of your plan to align the operational needs with business strategies based on your analysis. Include the following in your proposal:
o An analysis of the company based on Porter’s Five Forces
o An analysis on the effectiveness of the contingency leadership model the company is currently using
o Recommendation for the following actions:
o Leadership model changes
o Further actions needed to align operational needs with business strategies identified in Week 1

Include and cite 2 resources besides the text.

Format your citations according to APA guidelines.

Submit your assignment.

Wells Fargo

An analysis of the company based on Porter’s Five Forces

Wells Fargo Porters Five analysis will be used to analyze the business in which it functions in terms of opportunity and terms of attractiveness. The Porters Five forces comprise of: Bargaining power of purchasers and sellers, Threat of New Entrants, the threat of new substitutes as well as rivalry from competitors.

Threats of New Entrants

The industry has a strong product differentiation since the firms sell differentiated products. With the increased product differentiation and customer services, the risk of new entrants is weak. Relatively, there are difficult economies of scale for new entrants within the industry in which Wells Fargo operates. The risk of new entrants is made a weaker power due to the production costlier for the new competitors. The capital requirements are also high, thus creating a challenge for the new competitors to establish productions (Fernfort University, 2019). Wells Fargo can focus on the economies of scale and innovation to differentiate their products, thus building a strong brand which fights new competitors.

Bargaining power of suppliers

The number of dealers within the business are many. Thus, the sellers have minimal governance of prices, which makes this force weak (Fernfort University, 2019). The supplier fails to offer credible risk for forwarding integration within the business leading to a weak bargaining power for the suppliers. The supplier does not compete with other products, which means that the supplier concentrates on the product that they provide. This brings about a strong force for the supplier. Wells Fargo can switch costs to beats the suppliers or even have a number of suppliers in various locations to ensure supply chain efficiency.

Bargaining Power of Buyers

The number of suppliers is more than the firms that are offering the products. Therefore, the purchasers have fewer businesses to select from and thus have less governance on prices making the bargaining influence of the purchasers weak (Fernfort University, 2019). The buyers lack a lot of alternative products for particular products due to high product differentiation. This makes their power weak within the industry. Wells Fargo can concentrate on differentiation as well as innovation to draw more purchasers and a bigger customer base through marketing efforts.

The Threat of Substitute products or services

Limited firms are offering the services within the industry that Wells Fargo operates. The few substitutes within the industry are also facing low profits earning. There are very few substitutes available and which have high-quality products like Wells Fargo. This means Wells Fargo has a low threat of substitutes. Therefore, the company can focus on offering greater quality products at lower prices than its competitors that offer greater quality but at a high price.

Rivalry from Competitors

There are very few companies that operate within the industry, which means that the firms cannot make moves without being noticed. These include JP Morgan Chase, Citigroup, and Bank of America. Therefore, the rivalry among the competitors is weak. On the other hand, the few competitors have big market shares, which means that they will engage with competitive actions making the rivalry among the competitors strong within the industry (Fernfort University, 2019). The products within the industry have a high differentiation, which makes it difficult for competing firms. This makes the rivalry weaker since there is a difficulty in the supply-demand balance. Wells Fargo should focus on the differentiation of products to ensure that the activities of competitors have less influence since the consumers will seek unique items.

Effectiveness of the contingency leadership model

The company is currently relying on the situational leadership model. The situational leadership considers where the managers who adopt various leadership styles concerning the situation as well as the development of the team members. This is an operative way since the leadership can adapt to the needs of the team and set beneficial needs for the whole company (Hansen, 2009). The style of leadership enables the leaders to adjust their style of leadership according to the skill and behavior levels of the employee. For instance, employees may have low levels of motivation and skill, which requires the leader to direct the employees to have high skills and remain motivated to perform. The leaders are also able to offer support based on the demands and needs of the employees to remain motivated. Tim Sloan is Wells Fargo CEO, which makes him the strategic leader in the company (Wells Fargo 2019). He possesses excellent strategic thinking and foresight, making the company to remain a step ahead of the game. Through this leadership style, the company has been able to achieve tasks and develop the team, thus increased productivity.

Leadership model changes

Wells Fargo needs to change their leadership style to Laissez-faire leadership style. Considerably, rather than a single leader making all the decisions within the company, this leadership style allows other team members to take part in implementing workplace solutions (Hyun and Kang, 2015). This approach allows the followers to make decisions and set rules, thus giving employees more freedom. This style is essential in building a capable team since there are less standard procedures, thus building a strong team since they have the power for far-reaching strategic decisions.

Further actions

Wells Fargo needs to focus on differentiation and innovation of products through the integration of new technology. To effectively implement the opportunities, Wells Fargo needs to conduct market research and focus on attracting new customers who will be seeking for unique products. Through innovation and product differentiation, the company will be able to retain and attract new customers since they will have a strong brand. Innovative products, having patented technology, will facilitate the growth of the company.

References

Fernfort University. (2019). Wells Fargo & Company Porters Five Forces Analysis. Available at: http://fernfortuniversity.com/term-papers/porter5/analysis/1067-wells-fargo—company.php

Hansen, M. (2009). Collaboration: How leaders avoid the traps, build common ground, and reap big results. Harvard Business Press.

Hyun, A., & Kang, H. (2015). Similarities And Differences Of Industry Leaders’ Competitive Advantages. Leadership & Organizational Management Journal, 2015(2).

Wells Fargo. (2019). About Wells Fargo. Available at: https://www.wellsfargo.com/about/