Question

Create Wells Fargo & Company Porter Five Forces Analysis

Answer 1

Five forces analysis for Wells Fargo are as follows

Threat of new entrants

Very Low.

• Startup cost is 1 million dollars where in the capital is required at $12-20
• The process of opening a bank is very complicated in terms of legal factors.
• Federally approved startup banks are very tough to open.

Power of suppliers

High

• Federal Reserve banking system has extensive power over the controlling policies of the bank.

Power of buyers

High

• Wells Fargo is competing in an environment with too many suppliers
• It has a very low switching cost ranging from 0 to 100 dollars.
• Seven working days are available for switch.

Threat of substitution

Medium

• Insurances can be substituted
• Mutual Funds are easily be drawn
• Virtual currency is also affecting its overall business as blockchain currency is affecting the overall rate of business for the specific organisation.

Competition rivalry

High

• It is considered as the highest competitive industry has many banks are coming up with their own structure.
• Total registered Bank car ranging more than 10000 in United States.

P.S.- Please leave a comment if any explanation is needed.