B a c h a n i / B a y o n e t o | 1 BUSINESS OPERATIONS RESEARCH: FINANCE
Participants: Rohit Bachani, Grade 11 and Justin Bayoneto, Grade 11
Corporation of Interest: Wells Fargo & Company
DECA Chapter: W.T. Clarke High School/East Meadow, New York Chapter
School Address: 740 Edgewood Drive, Westbury, NY 11590 (516) 876-7451
Date: March 5-7, 2014
B a c h a n i / B a y o n e t o | 2 TABLE OF CONTENTS
I.
EXCECUTIVE
SUMMARY----------------------------------------------------------------
PAGE 1
II. INTRODUCTION--------------------------------------------------------------------PAGES 210
III. RESEARCH METHODOLOGY----------------------------------------------------PAGES
10-12
IV. FINDINGS AND CONCLUSIONS OF THE STUDY ----------------------------PAGES
13-21
V. PROPOSED REBRANDING PLAN--------------------------------------------------PAGES 21-25
VI. PROPOSED BUDGET --------------------------------------------------------------PAGES
25-29
VII. CITATIONS--------------------------------------------------------------------------PAGE 30
B a c h a n i / B a y o n e t o | 3 I. EXECUTIVE SUMMARY
It is been a commonly accepted notion that the 'economy' is in itself a fragile
entity, and that any aberration, even of infinitesimal value in the fiscal skeleton may
herald the development of an eventual dilemma in the financial macrocosm. Thus,
calculation and strong analyses of the business situation are integral in developing a
cohesive plan of action.
Premise & Proposed Plan: The object of this study was to craft a prudent plan of action
that would expedite the rebranding of WellsTrade®, a web-enabled and mobile brokerage
subsidiary of Wells Fargo & Company. Rebranding endeavors would serve to
substantially increase both market share and profitability, and implemented
improvements would elicit a diversification in the variety and quality of products offered
to select clientele. In order to alter efficaciously the corporate image of WellsTrade®, my
colleague and I conducted fastidious analyses of every facet of the mother entity (Wells
Fargo & Company) inclusive of analyses of financial services, business strategy and its
correlation to consumer appeal, and the company website. Our proposed plan allows for
the implementation of a stratagem that shall market the brokerage services of
WellsTrade® holistically following the formulation of ways through which to improve
and diversify the core business strategy. Amongst other things, it alters significantly the
state of and implements new trading tools for investment in equity, improves customer
service tactics by virtue of the use of multimedia and 24-hour availability of staff, and
improves the existing mobile application in a cost effective fashion via an extensive
digital campaign.
Summary of the Business: Wells Fargo & Company is an American multinational
banking and financial services holding entity that conducts lucrative, methodical
operations throughout the globe. It is the fourth largest bank in the United States by virtue
of assets and the largest bank by virtue of market capitalization (characterized by the
collective valuation of the issued shares of a publicly traded corporate entity). Wells
Fargo is headquartered in San Francisco, California, possessing "hubquarters" throughout
the country (Wells Fargo, 2009). The corporate entity in its present form is the result of
an amalgam, a merger betwixt San Francisco-based Wells Fargo & Company and the
Minneapolis-based Norwest Corporation in 1998. The subsequent acquisition of
Charlotte-based Wachovia in 2008 was the latest amalgamation of Wells Fargo and
another company.
Research Methods: The assertions in this inquiry were formulated following the
collection of substantial secondary research and learning of the infrastructure and the
stratagems that Wells Fargo & company employs to appeal to clientele in the sale of
equity. The utilization of a comprehensive 'investigative approach' aided in the
development of an assiduous SWOT analysis.
Findings: Following the conduction of an investigation and a SWOT analyses, my
colleague and I have crafted a nonpareil, intricate plan of action that shall create appeal
and empower the consumer, leading to the eventual generation of a wider audience.
B a c h a n i / B a y o n e t o | 4 II. INTRODUCTION
A. OVERVIEW OF WELLS FARGO & COMPANY
An evaluation of the brokerage services offered by WellsTrade® requires a
preceding assessment of the mother entity, Wells Fargo & Company. The mother entity
has been operating since the year of 1852, and opened its first edifice in San Francisco
during the gold rush, in which the stagecoach was utilized to facilitate the transport gold
and other values (this icon would eventually become a 'logo' of sorts for this magnate). In
1910, there existed 6,000 Wells Fargo edifices across the nation. In the 1980s, Wells
Fargo was recognized as the seventh largest banking operation in the nation (Wells Fargo
2011). As it was elucidated in the Executive Summary, the current Wells Fargo is the
result of a 1998 merger betwixt the Minneapolis-based Norwest Corporation. Although
Norwest remained the nominal 'survivor,' if you will, of this transaction, the newly
formed corporate entity retained the 'Wells Fargo' name to capitalize on the culturally
illustrious history of the nationally recognized brand (demonstrative of an innovative
marketing stratagem). Following the acquisition, the parent entity kept its headquarters in
San Francisco. On an intriguing side note, the entity's most current slogan: "Together,
we'll go far" alludes to the motif of the stagecoach, its customers, and may be interpreted
as a transposition in that Wells Far-go is equivalent to we'll(s) go-Far (Wells Fargo
2011). On the 3rd of October, 2008, Wells Fargo acquired Wachovia for USD $14.6
Billion in an all-stock transaction. The entity operates under Charter #1, the first national
bank charter issued in the United States, which was issued to the First National Bank of
Philadelphia on June 20th, 1863 by the Office of the Comptroller of the Currency. In the
October of 2008, Wells Fargo was the recipient of USD $25 billion of the Emergency
Economic Stabilization Act Federal bailout in the form of a preferred stock purchase.
B a c h a n i / B a y o n e t o | 5 Tests conducted by the Federal government revealed that Wells Fargo would require an
additional USD $13.7 billion in order to remain well capitalized if the economy were to
deteriorate further under stress test scenarios (Wells Fargo 2009). On May 11th, 2009,
Wells Fargo announced an additional stock offering which was completed on May 13th,
2009, raising USD $8.6 billion in capital, where the remaining USD $4.9 billion were
planned to be collected by virtue of earnings. Some of the core products offered to
clientele by Wells Fargo & Company are inclusive of:
•
Online Banking: Inclusive of mobile and 'text messaging' banking. Wells Fargo
offers standard online banking as well as applications through which to conduct
mobile banking. There are more than 20 million active online banking customers
as of now.
•
ATM Banking: Wells Fargo currently possesses upwards of 12,196 ATM
machines, where 8,029 of these ATMs are envelope free, capable of accepting
checks and bills directly.
•
Business Banking: Department serves over 2.5 million businesses with annual
revenues up to USD $20 million. The service includes business lending through
capital lines of credit, business credit cards, equipment and commercial real estate
loans.
•
Government and Institutional Banking: Provides solutions for government,
education, health care and nonprofit entities.
•
Home Equity: Wells Fargo holds a portfolio of USD $119 billion serving 2.1
million customers as of December 2010.
B a c h a n i / B a y o n e t o | 6 •
Mortgage: Wells Fargo is amongst the most renowned mortgage service providers
in the United States, and services 12 million loans totaling USD $1.8 trillion
dollars. Wells Fargo mortgage originations through the third fiscal quarter of 2010
totaled USD $262.9 billion.
•
Debit & Consumer Credit Cards: Wells Fargo is the 2nd largest debit card issuer
in the United States.
•
Personal Credit Management: Department offers unsecured loans and lines of
credit in addition to transportation loans and vehicular loans. This segment holds
upwards of 1.4 million accounts with portfolio balances of approximately USD
$6.1 billion.
•
Insurance: Wells Fargo Insurance offers coverage to both individuals and small
businesses. In addition, the department offers property & casualty, life insurance
and other protection products.
•
Retail Brokerage: Wells Fargo Advisors (WFA) handles upwards of USD $1.2
trillion in client assets. WFA provides planning/advice, asset managements, estate
planning, retirement planning and provides for the monitoring of portfolios.
•
Wealth Management: Provides more than 117,000 trust accounts. This service
provides private banking, investment management, trust/estate services, financial
and business-planning services alongside bank based brokerage offered by WFA.
•
Retirement: Wells Fargo holds upwards of USD $266 billion in IRA assets,
making it a leader of sorts in retirement planning.
B a c h a n i / B a y o n e t o | 7 B. COMMUNITY (ACCOLADES/ENDOWMENTS & EQUITY)
Wells Fargo ranked No. 1 amongst banks and insurance companies and No. 13
overall in Newsweek magazine's inaugural "Green Rankings" of the country's 500 largest
companies (Wells Fargo 2009). The 'green rankings' serve a useful tactic to increase
market share and connect with the populous. The following figures are representative of
the assets & liabilities, the asset & liability ratio and the net income of the entity up from
2000 to 2008 respectively (the drop in net income from 2007-2008 may be attributed to
the stock market crisis at the time, courtesy of Google Images).
a)
b)
B a c h a n i / B a y o n e t o | 8 c)
Amongst other things, Wells Fargo has been embroiled in a reasonable degree of
controversy in the past few years. For one, in December 2011, the non-partisan
organization Public Campaign criticized Wells Fargo for spending USD $11 million on
lobbying and for not paying any taxes during 2008-2010, and for getting USD $681
million in tax rebates despite making a profit of $49 billion, laying off 6,385 employees
since 2008 and increasing the executive income by 180% in 2010 for its top five
executives (Svaldi 1). As of 2013, however, at a marginal tax of 32% of its income, Wells
Fargo is the single-largest payer of corporation tax in the United States. Furthermore, the
GEO Group Inc., a multinational provider of for-profit prisons received investment made
by Wells Fargo mutual funds on behalf of clients, not investments made by Wells Fargo
& Company. By March 2010, its stake had grown to more than 4.4 million shares worth
USD $86.7 million. As of November 2012, it was revealed that Wells Fargo has divested
33% of its dispositive holdings of GEO's stock, which reduced Wells Fargo's holdings to
4.98% of Geo Group's common stock. Discrepancies in statements and obscure fiscal
transactions with related corporate entities have made the affairs of Wells Fargo &
B a c h a n i / B a y o n e t o | 9 Company the center of much cause célèbre over the past few years, and have contributed
to the development of negative publicity.
C. MISSION, TARGET MARKET & BRANDING EFFORTS
An evaluation of the mission of Wells Fargo requires a preceding assessment of
the Wells Fargo report of Corporate Social Responsibility (2011). The vision statement of
the entity is: "We want to satisfy all our customers' financial needs and to help them
succeed financially (Wells Fargo, 2011)." The company realizes that this statement is
rather lofty in nature, and goes on to elucidate its intentions: "This may sound odd to
some, but we don't believe our first job is to make a lot of money. Nowhere in our vision
statement will you find 'we want to make a lot of money.' Our first job is to satisfy those
needs so they can be financially successful. If we do that right, then all sorts of good
things will happen for all our stakeholders including our shareholders (Wells Fargo)."
The corporate entity implies quite strongly that its values are integral to its modus
operandi. These core values may be segmented into 5 categories: what is right for the
consumer, people, ethics, diversity and leadership. In addition, Wells Fargo possesses an
impeccable track record of being a socially responsible enterprise. A quote from the 2009
Corporate Social Responsibility Report states: "Our vision for social responsibility builds
on our corporate vision of helping our customers-- and that means everyone in our
communities-- succeed financially. At Wells Fargo, we believe our success is tied to their
success. It's a relationship we honor by contributing to better economies and
environments, and by creating opportunities for individuals of all walks of life..." The
company's strategic focus for corporate social responsibility may be segmented into the
five categories below:
B a c h a n i / B a y o n e t o | 10 Environmental Stewardship
•
Greener products
•
Building sustainable communities
•
Team member engagement
Team Member Engagement
•
Health and wellness
•
Diversity and inclusiveness
•
Team member giving and volunteering
Ethical Business Practices
•
Governance
•
Adherence to the Code of ethics
•
Risk management and compliance
Product and Service Responsibility
•
Fair and responsible lending and pricing
•
Access to products and services
•
Education and trusted advice
Community Investment
•
Philanthropy
•
Financial education
•
Supplier diversity
•
Community partnership
(Wells Fargo, 2009)
B a c h a n i / B a y o n e t o | 11 In addition, Wells Fargo posesses Team Member Netwroks that align with corporate
stratagems and are devoted to professional growth and education, community outreach,
recruiting and retention, supporting business development and customer insight. Each
network is comprised of individuals connected by a shared background, experience, or
other affinity. This stratagem promotes the coalition of ethnicity and creed to form a
member network that promotes egalitarian values and virtue and markets the Wells Fargo
brand to the consumer body as a socially competent enterprise. There are Latino member
networks, Asian networks, Middle Eastern team networks, African American networks,
etc. On another note, in regards to the target market, Wells Fargo & Company markets its
services to enterprises (small and large) and individuals who are seeking financial help
and advice. The primary market group consists of large commercial enterprises (S
corporations and C corporations) and wealthy individual investors betwixt middle age
(30-35 years of age) and retirement (generally 65 years of age). Wells Fargo is able to
appeal to this demographic substantially, for it markets itself a "A company that has
consistently grown with its customers (Said, 2)." In a similar vein, Wells Fargo markets
itself holistically, where emphasis is based upon the relationship betwixt the consumer
and the company service providers. Wells Fargo, by virtue of its vision statement and
sales tactics, attempts to buld customer loyalty and provide the optimal customer service.
Slogans such as "Together, we'll go far" are characteristic to the Wells Fargo entity, and
build brand awareness. In 2010, the Brandt Works corporation led the team that
implemented the online rebranding for wellsfargo.com. Changes made to the existing
website were inclusive of global CSS updates for public site & secure session, logo and
tpography changes, a new color palette, branded tools and calculators, updated online
B a c h a n i / B a y o n e t o | 12 video playabck and updated rich media standards. this improvement greatly fortified the
'brand identity' of Wells Fargo.
III. RESEARCH METHODOLOGY
A. STEPS TAKEN TO DESIGN THE STUDY OF WellsTrade®
In order to craft and interpret a SWOT analysis of WellsTrade®, my colleague and
I deemed it necessary to assess the state of affairs of the mother entity, Wells Fargo &
Company. This maneuver was of monumental significance in conducting a
comprehensive evaluation of WellsTrade® and the subsequent development of a program
to add value to the brand for this tactic served as the 'framework' or 'skeleton' upon which
we would conduct further analyses of the business situation and the services offered by
the existing brand. Ergo, the primary intention of conducting this 'sub-study,' if you will
was to gather information regarding the infrastructure of the Wells Fargo operation and to
determine environmental factors, such as controversy in fiscal transactions and other
economic factors that could ultimately serve deleterious to the operation. It was
imperative that the minutia of the business operation was given a special significance in
order to devise a working, almost infallible stratagem. Likewise, it was essential that my
colleague and I also ascertained the manner in which WellsTrade® is efficacious in
rivaling its competitor brokerage services, and how the entity is able to appeal to clientele
in terms of concessions and customer satisfaction. Furthermore, it was imperative that my
colleague and I gathered information in regards to the more formidable competitors of the
WellsTrade® brokerage service and conducted a cross comparison of the strengths and
weaknesses of each, allowing for a more comprehensive determination of the more
effective brokerage service. My colleague and I resolved to test more than one 'variable'
and conducted a cross comparison of the WellsTrade® service with three of its
B a c h a n i / B a y o n e t o | 13 competitors for the purpose of establishing how well the WellsTrade® service fares
against its foes. Lastly, it was imperative for us to comprehend how Wells Fargo &
Company was able to achieve success (be it limited or significant) in its marketing
campaign and to determine the method for the formulation of a cohesive campaign in
order for us to be able to devise our own campaign.
B. STEPS TAKEN TO CONDUCT THE STUDY
As stated earlier, the research conducted in regards to the mother entity, Wells
Fargo & Company was instrumental in developing the framework upon which further
work would be conducted. Thereafter, my colleague and I analyzed consumer preferences
and needs to determine how WellsTrade® is able to accommodate them by virtue of
conducting a survey and received upwards of 150 responses. The purpose of this survey
was to determine popular retail brokerage firms amongst a wide generation. This assisted
in ascertaining the demographic and psychographic of the target market. In order to
develop a campaign for the brokerage services offered by WellsTrade®, my colleague and
I attended upwards of 5 webinars that elucidated the planning needed in the
conceptualization and creation of a comprehensive digital campaign to bolster the
efficacy of the rebranding effort. These webinars were catered by
www.webtrends.com/resources/webinars. In addition, we reviewed the WellsTrade®
website meticulously in order to determine the efficacy of the trading tools, customer
service and trade research amenities offered to clientele. Furthermore, my colleague and I
created accounts with the WellsTrade® brokerage service, the TD Ameritrade brokerage
service, the Charles Schwab brokerage service and the E*trade brokerage service in order
to cross compare the WellsTrade® services with the services offered by the three other
B a c h a n i / B a y o n e t o | 14 entities. In order to determine how effectively Wells Fargo/WellsTrade® is able to
communicate with its consumer base, we looked to see how clearly Wells Fargo®
followed the 'seven C's' of effective communication (clear, concise, concrete, correct,
coherent, complete and courteous). Thereafter, we researched the efficacy of Wells
Fargo's current infrastructure, which was analyzed using financial analysis ratios to
assess Wells Fargo's activity, leverage and profitability. Activity ratios, inclusive of
'inventory turnover,' were utilized to determine the efficiency of Wells Fargo's brokerage
services based on its utilization of its assets. The leverage-debt ratio was utilized to
determine the percentage of Wells Fargo's assets that are provided via debt. Finally, we
utilized the gross profit margin, the profit margin and return on total assets profitability
ratios in order to determine the overall profitability of the brokerage service by measuring
its ability to generate earnings in relation to its expenditures. We also analyzed the
efficacy of the employees of the brokerage service by analyzing the different types of
employees that Wells Fargo employs in addition to how effectively these employees
perform their tasks. Lastly, my colleague and I conducted thorough analyses of
WellsTrade®'s competitors (in addition to opening accounts with competitor brokerage
services) and analyzed the strengths and weaknesses of the WellsTrade® services in
addition to considering the economic situation and collocating it with the WellsTrade®
service to ascertain any opportunities and threats that the economic services in question
may pose to the brokerage service.
B a c h a n i / B a y o n e t o | 15 IV. FINDINGS AND CONCLUSIONS OF THE STUDY
A. FINDINGS / CONCLUSIONS OF THE RESEARCH STUDY
First and foremost, we conducted an analysis of the WellsTrade® website. We
found that there is no logo available to discern the WellsTrade® service from the services
of the mother entity, Wells Fargo & Company, and that they both share the same logo.
We then focused upon the large tabs towards the middle of the page, labeled "What You
Can Do, Prices and Fees, Market Commentary and Tools, and Services." Each tab
provides concise bullet points in regards to the extent of the service offered by
WellsTrade®, including, but not limited to:
•
Entering trades for stocks, exchanging traded funds
•
Accessing market news, market data and index information
•
Setting up alerts and monitoring the status of balances, trades and transfers
•
Having access to basic concepts and notions to learn how the investment process
works
•
Having market insight and analysis through a multitude of articles
•
Having access to market commentary and economic outlooks
WellsTrade® also offers to clientele a service known as portfolio tracker, through which
one can view 20-minute delayed streaming quotes, news, and charts on the desktop, and
where one may also receive updates on the market situation throughout the day,
customize the layout and data to be suited to one's preference, view price, technical,
stochastic and moving average charts, and see color coded gain and loss fluctuations.
Other concessions are inclusive of:
•
The ability to access additional return and risk data
B a c h a n i / B a y o n e t o | 16 •
The ability to narrow one's search with updated stock, mutual fund and ETF
screeners
•
The ability to keep track of bond market commentary
The WellsTrade® service provides for phone assistance from a 'knowledgeable' support
team 24/7, and bestows upon the client the wherewithal to utilize a voice-activated phone
system to access balances, place trades, get quotes and transfer money. Subsequent to
conducting a few transactions (one of them is portrayed by the photograph below),
we determined that WellsTrade® offers an excellent selection of independent, third party
investment research and education resources (meaning that the stipulation on the website
was indeed correct to a certain degree), inclusive of market commentaries, profiles, S&P
stock reports and Morningstar® mutual fund ratings. Notwithstanding, we found that
charts were less comprehensive than in most other brokerages. Furthermore, the gain/loss
information on the 'positions' screen would not update immediately. Overall, the trading
B a c h a n i / B a y o n e t o | 17 tools were, to a reasonable degree, disappointing. Amongst other things, we found that it
was quite costly to invest in or to trade equity and exchange traded funds with
WellsTrade®, for it costs USD $8.95 per stock and the exchange traded funds rate is
significantly higher than the average rate amongst online brokerage firms. Mutual funds
were also quite expensive at USD $35 per transaction. WellsTrade® offers shortened
extended hours trading, where after hours trading may only be conducted from 4:05 pm
to 5:00 pm EST instead of 4:00 pm to 8:00 pm EST, the more commonly allotted time
frame for after hours trading. We determined that WellsTrade® also charges significant
commissions on penny stock trades and trades of over 1,000 shares. Quite unlike its peer
brokerage firms, WellsTrade® charges a USD $60.00 annual account maintenance fee. By
the same token, the company has very high margin rates and often suffers from slow-torespond customer service, which we suspect was understaffed at the time we made
transactions. This discovery disproved the stipulation that WellsTrade® offers to clientele
'24/7 customer service.' Furthermore, not all amenities are available to customers sans
large portfolios. Customers who do possess large portfolios may enjoy the benefits of a
private advisory contingent. This enables investors to gain the benefits and attention
given to clients at large brokerage houses whilst retaining all of the benefits found in the
banking environment. Although this facet of the brokerage service is not necessarily a
con, it adds insult to injury of investors who do not enjoy this benefit, for the archaic
trading tools already do much to complicate the trading process for the casual investor.
The strengths and weaknesses of the WellsTrade® service are presented below:
B a c h a n i / B a y o n e t o | 18 Strengths:
•
Thorough banking services
•
Extensive independent investment research amenities
Weaknesses:
•
High commissions if not in private advisory group
•
Understaffed customer service and poor quality of service
•
Archaic trading tools
•
High margin rates
•
$60 annual account maintenance fee and $30 annual individual retirement account
(IRA) fee
•
Shortened after hours trading: 4:05pm - 5:00 pm
Thereafter, we continued with an analysis of the services offered by TD Ameritrade.
Firstly, we determined that the TDAmeritrade.com website is quite well designed with
intuitive menus, bestowing upon clientele the wherewithal to easily find all the resources
that they need, where one particularly useful feature allowed users to enter trades
anywhere on the website through the order-entering box that is located on the bottom of
every page. We found that the services offered by TD Ameritrade are more expensive
than those offered by WellsTrade®, charging USD $9.99 per stock trade and USD $49 to
trade a mutual fund. However, there is no charge issued for market data or for third-party
trading tools. Unlike most other brokerage firms, TD Ameritrade does not issue
surcharges on large orders, penny stocks or for extended hours trading. Furthermore,
there are no maintenance charges or inactivity charges issued to clientele. Moreover,
there are no setup fees or annual fees required to establish and maintain and individual
B a c h a n i / B a y o n e t o | 19 retirement account (IRA). In addition, TD Ameritrade provides to clientele access to
webcasts and podcasts about investing, attracting a substantial number of novices to the
trade. Customers also have access to the myTRADE investor community, which allows
members to follow what other members are doing, to share trades and ideas, and to learn
various investment strategies. All in all, TD Ameritrade is truly a formidable competitor
to WellsTrade®, for its services are to a reasonable degree more comprehensive and user
friendly. The strengths and weaknesses of the TD Ameritrade service are presented
below:
Strengths
•
No surcharges on penny stocks
•
Communication with other traders via the myTRADE service
•
Free IRA accounts
•
100+ exchange trading funds (ETF) sans commissions
•
No maintenance or inactivity fees
•
Free dividend reinvestment plan
•
Excellent third party investment research amenities
Weaknesses:
•
High margin rates
•
Cost of $9.99 per stock
Next, my colleague and I analyzed the Charles Schwab trading service. We found that the
trading tools at Charles Schwab are average at best, despite the existence of welldesigned screens and adequate trading tools. The firm does not issue maintenance and
inactivity fees, and there exist no surcharges for large orders, penny stocks or after-hours
B a c h a n i / B a y o n e t o | 20 trading. The firm charges $8.95 per stock trade, and $76 to purchase mutual funds, the
most expensive ETF fee amongst all online brokers. Furthermore, we found that the
company does not list all of its fees on its website, where a Full Account Transfer Out
Fee is $50 but the website lists it as being free of charge. This is representative of
dishonesty, and is not equitable for prospective customers. The strengths and weaknesses
of the Charles Schwab service are listed below:
Strengths:
•
Personal guidance is available at no additional cost
•
Varied research
•
Satisfactory customer service
•
Rich selection of investment products
Weaknesses:
•
High commissions on stocks, options, mutual funds and ETFs
•
Company does not make mention of all fees on its website
Lastly, my colleague and I conducted an analysis of the services offered by the E*trade
brokerage service. We found that the registration for a new account online is relatively
fast (around 10 minutes) and is well-organized. The company offers to its clientele
several Sweep Options (where one's funds are held until one elects to invest them) and
the default is the E*trade Financial Extended Insurance Sweep Deposit Account, which
offers daily interest and FDIC insurance up to USD $1,250,000. The entity provides
customers with access to free debit card and check writing, although a minimum balance
of $1,000 is required for this concession to be issued. E*trade possesses 18 powerful
trading tools, inclusive of a tool that allows one to find the strategy that aligns with his or
B a c h a n i / B a y o n e t o | 21 her investing goals, trading experience and risk level, and a tool that allows one to scan
the market for stocks and options that match one's chosen criteria. Active traders (those
who execute at least 30 stock or options trades during a calendar quarter) are allowed free
access to E*trade Pro, the firm's direct access desktop trading platform that lets allows
users to locate top performing sectors, industries and stocks in just three clicks.
Customers may also watch fully integrated live-streaming CNBC right from their
desktop. Notwithstanding, trading screens some times do not show the updated price of
the security being traded, and that may lead to buying or selling at something other than
the execution price. Perhaps the most distinctive of the services offered by E*trade is the
variety of options for accessing funds when needed. There are several methods available:
one may transfer funds to another bank account, utilize a debit card to make a purchase or
withdraw cash, or even simply compose a check. In addition, E*trade promotes unlimited
ATM fee funds when using an ATM that charges a fee. However, there exists a bit of a
catch to this concession: the owner of the ATM that one chooses to use shall most like
charge one with a third-party fee for using the ATM. The strengths and weaknesses of the
E*trade service are outlined below:
Strengths:
•
Very powerful trading tools
•
No IRA account fees, and no minimums with electronic statements
•
No surcharges on large orders or penny stocks
•
Access to trading services on 40 foreign exchange’s
Weaknesses
•
High commissions on all investment products
B a c h a n i / B a y o n e t o | 22 •
High margin rates
•
E*trade Pro platform is available at no charge to only those who execute at least
30 stock or options trades during a calendar quarter.
The TD Ameritrade, Charles Schwab and E*trade brokerage services all serve as
formidable competitors to the WellsTrade® service, and ergo remain substantial threats to
the business operation conducted by WellsTrade® in that the majority of services offered
by its three competitors are all superior in terms of the efficacy of trading tools, the
nonexistence of maintenance fees and additional surcharges and the availability of quality
customer service. Furthermore, the survey that my colleague and I had conducted to
determine the more popular brokerage firms only bolsters the validity of the
aforementioned notion:
B a c h a n i / B a y o n e t o | 23 The charts above represent the data collected from the survey in two distinct forms (for
the purpose of better collocating and interpreting the data). From a sample size of 150
people, where the experimental subjects were all of middle age to the age of retirement
(35 years of age to 65 years of age), 84 subjects preferred to utilize TD Ameritrade for
trading purposes, and quoted the comprehensive tading tools and efficient customer
services as being a factor in determining their respective preferences. 53 of the subjects
preferred Charles Schwab, 10 subjects preferred E*trade and the remaining 3 subjects
preferred WellsTrade®. The chart underneath the bar graph represents the data in
percentages, where 2% of the sample size preferred WellsTrade® as the ideal brokerage
service.
B. CONCLUSIONS OF THE RESEARCH STUDY
The aforementioned results portray that WellsTrade®, based on its being the
preference of the least number of people in the tested sample size and upon the analyses
of its strengths and weaknesses, is, to a reasonable degree, inferior in its financial
offerings to the offerings of its competitors, TD Ameritrade, E*trade and Charles
Schwab, which serve as threats to the operation of the WellsTrade® brokerage subsidiary
to Wells Fargo & Company. Full fledged explanations of findings are found above.
Despite the shortcomings of Wells Fargo's subsidiary brokerage firm, there exist a
multitude of opportunities that are to be discussed in the passage to follow.
V. PROPOSED REBRANDING PLAN
A. OBJECTIVES AND RATIONALE OF THE PROPOSED PLAN
As elucidated in the executive summary, the intention of the proposed plan is to
market the brokerage services of WellsTrade® holistically following the formulation of
ways through which to improve and diversify the core business strategy. Amongst other
B a c h a n i / B a y o n e t o | 24 things, it aims to alter significantly the state of and implements new trading tools for
investment in equity, improves customer service tactics by virtue of the use of
multimedia and 24-hour availability of staff, and improves the existing mobile
application in a cost effective fashion via an extensive digital campaign. A digital
campaign would not only assist in appealing to a more extensive consumer base (where
individuals younger the middle age may find interest in the financial services offered by
WellsTrade®), but would capitalize upon the growing trend of utilizing popular mediums
to communicate the core values of a service or stratagem efficiently whilst generating
positive publicity for the product or service in question.
B. PROPOSED ACTIVITIES
First and foremost, the rebranding endeavor shall aim to revise utterly the trading
platform upon which WellsTrade® currently operates. The name of the platform shall
integrate cause marketing with user-friendly and advanced trading tools to function as a
double entendre of sorts: 'FairTrade.' Fair Trade is an organized social movement that
aims to assist producers in developing countries to make better trading conditions to
promote sustainability. Wells Fargo/ WellsTrade®'s implementation of cause marketing
tactics to implement a new and improved trading platform with the moniker 'FairTrade'
shall portray Wells Fargo & Company as humanitarian in its intentions and has the
potential to generate tremendous positive publicity for the corporate entity. The trading
platform shall be available to all WellsTrade® brokerage customers simply for having an
account with the firm. Once when logs into his or her brokerage account, the 'FairTrade'
platform shall be found as a tab on the page. Here, a customer may enter a stock, mutual
fund or option symbol to obtain more information and/or place a trade. Once the symbol
B a c h a n i / B a y o n e t o | 25 is entered, one will instantly have access to research, news, charting, and level II quote
information alongside a display of the current bid/ask price of the previous trade. For an
investor looking to keep an eye on his or her favorite stocks, a section shall be included
where one can save all of the symbols for a company that he or she is following. When
one accesses this section during market hours, it will display real time streaming quotes,
which include the current bid, price of the last trade, volume and even a quote trend graph
to help an investor ascertain the direction in which the investment has been trading.
Included shall be a tab where one can locate a number of different stocks that the system
provides based on certain criteria such a volume, trading percentage, etc. This
improvement shall not only save one time, but can hone in on specific trends to take
some of the guesswork out of finding one's next possible investment. A live feed to
CNBC shall stream he visuals and audio from what is currently being shown on
television. A 'WellsCommunity' tab shall allow one to communicate with the trading
community and compare recent trades, strategies and experiences with fellow Wells
Fargo traders. This tab shall function as a specialized chat room, or forum of sorts.
Beginning investors shall be given the opportunity to practice trading stocks sans real
money via a tab called 'TryTrade.' The existing Wells Fargo mobile application shall be
revamped completely to feature the 'FairTrade' platform including the aforementioned
amenities. The new platform shall be unveiled at high-profile games of the Philadelphia
Flyers (NHL), The Philadelphia 76ers (NBA) and The Philadelphia Wings (National
Lacrosse League), which are all held at the Wells Fargo Center in Philadelphia, where a
30 second promotional ad shall demonstrate the benefits of the user-friendly, revamped
and advanced 'FairTrade' platform featuring the slogan:
B a c h a n i / B a y o n e t o | 26 A finite number of individuals (30-35) who, at the site of the games or within the week
join Wells Fargo and make a certain number of transactions shall receive two tickets to a
sports event of their choice at the Wells Fargo Center and a month of complementary
investment advice. Promotional events like these shall be held throughout the region
every two-three months. The slogan shall function as a double entendre, implying a
revolution in the way through which the clientele of WellsTrade® shall be able to trade
equity, and shall allude to the slogan of Wells Fargo & Company, the stagecoach. The
utilization of Twitter as a medium to communicate the implementation of the new trading
platform is sure to create significant hype and anticipation for tech savvy traders,
appealing to a more diversified consumer base. A new logo shall be integrated onto the
existing WellsTrade® website to this effect:
B a c h a n i / B a y o n e t o | 27 The new logo shall make WellsTrade® brokerage services easily discernible from the
existing Wells Fargo logo, which shall build brand awareness and brand identity. Lastly,
a more competent and capable staff shall be present 24/7, and higher standards shall be
required for customer service representatives (qualification tests and checking of
background, etc).
VI. PROPOSED BUDGET
A. COSTS ASSOCIATED WITH STRATAGIES
As previously stated, the proposed plan includes the improvement on the already
existing mobile application. Currently, the application is rather negatively reviewed in
comparison with other mobile applications from notable competitors of WellsTrade®.
The proposed budget for developing a new mobile application would be
approximately $201,600, the process in its totality would take approximately 12 weeks,
or 84 days, with costs averaging to $2,400 per day. Initially, a learned designer of the
application would be hired, with the projected designer of the application working for an
estimated fee of $900 per day. Assuming that the designer would take about two weeks to
design the application, estimated expenditures for the designer of the app would be
$12,600. Afterwards, the next 10 weeks would simply be devoted to the development of
the application, inclusive of the writing of the code, finalizing its appearance, and
publishing the app for the public. The initial development of the app would take
approximately four weeks. The developer of the application would accept at a fee of $450
per hour. Assuming the developer works at that rate for 40 hours per week for four
weeks, the approximate totals for the expenditures for the developer come to $72,000.
Thereafter, four weeks are devoted to the writing of the code for the app. Funds for this
step of the process will be higher than the previous steps for several features will be
B a c h a n i / B a y o n e t o | 28 included in the app to create a better experience for the user. The approximate costs for
coding the application come out to $80,000. Once the application is up and running, an
additional $32,000 shall be devoted to project management, foreseeing the entire
development of the application, in addition accompanying for unforeseen delays and/or
any necessary debugging processes. Finally, $5,000 shall fund for the application’s
present on the mobile market for the first year. Below is a breakdown of the mobile
application’s total budget:
Projected Application Developmet Budget $5,000 $12,600 $32,000 Design Development $72,000 Coding Project Management Market Fees $80,000 The application will feature several features to make the app more user-friendly to the
users, accommodating for several needs of the customers, in addition to making the app
attractive to potential customers. A major component of the application is the user
interface feature, which will be seen through the platform, 'FairTrade', featuring the
aforementioned features listed under the section “Proposed Rebranding Plan” above.
Another notable feature that will be new to the application is a scanner in which the user
can simply scan a check in order to make a deposit to their account. A geographic locator
B a c h a n i / B a y o n e t o | 29 will be implemented into the app, allowing for the user to find the nearest Wells Fargo
Bank based on their current location. The application has the ability to synchronize across
multiple devices, including smart phones, tablets, and computers. Finally, a rating and
feedback system shall be implemented in order to allow users to input their opinions of
the app, allowing for our company to make any necessary changes to satisfy our users.
Below is a graph illustrating all the features of the application and the percent of the total
coding budget of $80,000 required to develop each of the listed features:
B a c h a n i / B a y o n e t o | 30 Also stated earlier was the idea of establishing promotional giveaways, in
promoting ‘FairTrade’. The establishment of promotional giveaways will cost $98,400.
Due to our company having the naming rights to the Wells Fargo Center in Philadelphia,
a potential $10,000 deal could be made with any of the tenants of the stadium, with the
previously mentioned projected tenants being the Philadelphia Flyers, the Philadelphia
76ers, and the Philadelphia Wings. With the remaining $88,400 of the cost listed above,
tickets would be purchased at an average of $20 a ticket. Packaged in a promotional deal
of two tickets per deal, a total 2,210 potential giveaway promotions are available to
current and potential customers.
The final step in the “rebuilding plan” involves the hiring of additional employees
for our customer service and sales representatives department. One of the biggest
complaints currently about WellsTrade® involves the customer service, claiming that the
service was too slow or poor treatment by our representatives. This step involves hiring
1,000 employees for the department at the price of $30,000 each per year, equivalent to
$300,000 total. Each potential employee must, however, have a certain set of credentials
to be considered for the job. Potential applicants shall then be screened and take an
examination to ensure only the highest quality employees are hired for the department.
The approximate breakdown of the total budget for the “rebranding” process of
WellsTrade® is illustrated on the next page. The approximate cost of initiating and
promoting “The Next Stage” is $50,000. Costs for the promotional giveaways come to a
total of $98,400. Adding in the costs of redeveloping the mobile application at $201,600
and $300,000 in hiring employees for our customer service and sales representative
department, the total budget for the plan comes to about $650,000.
B a c h a n i / B a y o n e t o | 31 WellsTrade® Rebranding Plan Budget $50,000 The Next Stage' Initiation $300,000 $201,600 App Redevelopment Promotional Giveaways Customer Service Hirings $98,400 B. MEASURING RETURN ON INVESTMENT
The projected costs stated earlier for the “rebranding plan” of WellsTrade® are
$650,000. However, the projected amount of profit from the investment being made
through this process of “rebranding” over the rate of one year is estimated to be around
$5,000,000. Computing the return on our initial investment, the ROI comes to about
6.7%, which is considered to be a significant ROI for this business. Thus, in one year
alone, not only did the initial investment through “rebranding” pay off, but in a year’s
time, our Wells Fargo is expected to see a truly profitable ROI, resulting in great success
for WellsTrade®.
B a c h a n i / B a y o n e t o | 32 Citations
1. Wells Fargo. (2009) Corporate Social Responsibility Report 2009. Retrieved January
20, 2014, from Wells Fargo:
https://www.wellsfargo.com/downloads/pdf/about/csr/reports/wf2009corporate_ci
tizenship.pdf
2. Wells Fargo. (2011, Mar 15). News Release. Retrieved January 20, 2014, from Wells
Fargo:
https://www.wellsfargo.com/press/2011/20110315_Japan
3. Svaldi, Aldo. "Wells Fargo learned hard way about deals". Denver Business Journal.
Retrieved January 20, 2014.
4. Said, Carolyn (May 5, 2007). "Wells Fargo buys bank / Greater Bay has 41 branches in
the Bay Area". San Francisco Chronicle. Retrieved June 12, 2010
5. Wells Fargo Asset/Ratio graphs courtesy of Google Images
*The Twitter icon used in the development of the "The Next Stage" Twitter campaign is
reflective of original work, as is the logo for the Wells Trade service. Copyright
infringement is not intended. Twitter logo courtesy of: https://twitter.com*