CASE STUDY 5 1. Industry and Market: Wells Fargo majors in financial and banking services and has a huge market capitalization due to its worldwide operations. 2. External Environment: The financial crisis in the US from 2007 to 2009 saw many financial and banking institutions suffering huge losses leading to massive merges to prevent bankruptcy. 3. Internal Environment: Through the purchase of Wachovia Corporation in 2008, the company improved its new mortgage business and became a top-performing bank in the United States. 4. Financial Analyses: The acquisition of Wachovia Corporation was worth $ 15 billion. This acquisition accounted for 11.2% of mortgages. 5. Economic Condition for Industry: Despite the financial crisis, the company achieved high levels of operational efficiency and market penetration by adding about 3400 retail branches for its network. 6. Key Trending Factors: Trending factors include heavy mortgage lending and bank merging. 7. SWOT Analysis. · Strengths: The Company’s biggest strength is adjustments in the mortgage business. · Weaknesses: Certain instances of customer and employee dissatisfaction are a weakness that the company has. · Opportunities: Lack of success by the company’s competitors was its main opportunity. · Threats: Maintaining the success in the mortgage business through mortgage lending is a threat. 8. Key issues of the case: Key issues of the study include the financial crisis, economic stress and heavy mortgage lending by banking institutions. 9. Critical issue of the case that needs attention first: Financial crisis is a critical issue in this study because it has several effects to the society. Therefore, maximum attention has to be focused on this issue. 10. Assumptions in the recognition of this critical issue The financial crisis affects every person in the society because of the stress it puts on the economy. Assumptions made in the recognition of financial crisis as a critical issue include the following: financial crisis affects everybody, and there is a solution to financial crisis. 11. 2 to three alternatives to address this critical issue Slashing taxes, cutting regulations and limiting financial leverage are alternatives of addressing the issue. 12. Choose one of the alternatives to implement Limiting financial leverage is an implementable alternative. 13. Describe the overarching strategy you propose and within which this alternative fits Imposing strict limits on the financial leverage is a strategy of implementing the alternative. Encouraging banking organizations to impose strict limits on financial leveraging will reduce the amount spent on leverage. 14. Explain your plan to implement this alternative Financial and legal functions of any organization are very crucial in implementing objectives put in place. 15. Identify the critical organizational functions of the organization needed for implementation Financial organizational functions set a limit by which the organiza ...

1. CASE STUDY 5
1. Industry and Market:
Wells Fargo majors in financial and banking services and has a
huge market capitalization due to its worldwide operations.
2. External Environment:
The financial crisis in the US from 2007 to 2009 saw many
financial and banking institutions suffering huge losses leading
to massive merges to prevent bankruptcy.
3. Internal Environment:
Through the purchase of Wachovia Corporation in 2008, the
company improved its new mortgage business and became a top-
performing bank in the United States.
4. Financial Analyses:
The acquisition of Wachovia Corporation was worth $ 15
billion. This acquisition accounted for 11.2% of mortgages.
5. Economic Condition for Industry:
Despite the financial crisis, the company achieved high levels
of operational efficiency and market penetration by adding
about 3400 retail branches for its network.
6. Key Trending Factors: Trending factors include heavy
mortgage lending and bank merging.
7. SWOT Analysis.
· Strengths: The Company’s biggest strength is adjustments in
the mortgage business.
· Weaknesses: Certain instances of customer and employee
dissatisfaction are a weakness that the company has.
· Opportunities: Lack of success by the company’s competitors
was its main opportunity.
· Threats: Maintaining the success in the mortgage business

2. through mortgage lending is a threat.
8. Key issues of the case:
Key issues of the study include the financial crisis, economic
stress and heavy mortgage lending by banking institutions.
9. Critical issue of the case that needs attention first:
Financial crisis is a critical issue in this study because it has
several effects to the society. Therefore, maximum attention has
to be focused on this issue.
10. Assumptions in the recognition of this critical issue
The financial crisis affects every person in the society because
of the stress it puts on the economy. Assumptions made in the
recognition of financial crisis as a critical issue include the
following: financial crisis affects everybody, and there is a
solution to financial crisis.
11. 2 to three alternatives to address this critical issue
Slashing taxes, cutting regulations and limiting financial
leverage are alternatives of addressing the issue.
12. Choose one of the alternatives to implement
Limiting financial leverage is an implementable alternative.
13. Describe the overarching strategy you propose and within
which this alternative fits
Imposing strict limits on the financial leverage is a strategy of
implementing the alternative.
Encouraging banking organizations to impose strict limits on
financial leveraging will reduce the amount spent on leverage.
14. Explain your plan to implement this alternative
Financial and legal functions of any organization are very
crucial in implementing objectives put in place.
15. Identify the critical organizational functions of the
organization needed for implementation
Financial organizational functions set a limit by which the
organization can reduce financial leverage. The legal
organizational functions ensure that the limit is in line with the
existent regulations.

3. 16. Identify the process needed from each of these critical
functions for implementation
The major process required for the implementation of this
function is to have qualified team with all the required
resources.
17. Describe the balance scorecard metrics to measure the
success of this implementation
Since the Balanced Scorecard is all about strategic planning by
implementing adequate measures in ensuring success through
investment in factors like innovation, limiting of financial
leverage will be helpful because it is an innovative measure in
solving the crisis.
18. Describe any ethical concerns with this critical issue and
plan implementation
Lack of integrity in subprime lending is an ethical concern
evident in the case. Many people continued applying for loans,
which were granted easily. There was no financial openness
from the lending banks that housing prices had declined. There
has to be ethical boards to address such issues.
19. Describe any environmental concerns with this critical issue
and plan implementation
Declining banks and closing of others is an environmental
concern, which can be implemented by ensuring merges with
potential institutions.
20. Describe any social concerns with this critical issue and
plan implementation
Poverty is a social concern that can arise from the financial
crisis because closure of banks and other financial institutions
results in loss of jobs making it easier for people to earn a
living. Merging institutions can be an implementation
addressing the concern.
In summary,
My brief summary of my recommendation and value propose
this organization may gain from this implementation is that the
financial crisis is a crucial factor in the operations of Wells

4. Fargo as a financial institution. However, implementation of the
alternatives will give it an upper hand in maintaining the
company’s success in the mortgage business. The
implementation of the alternatives ensures that there is minimal
loss of finances through mortgage lending. Moreover, it enables
the company to maximize the outputs hence having more
profits.