Why Wells Fargo’s strategy is different from other banks
“Strategy” can be defined in many ways. Generally, strategy is a long-term plan. There are two main aspects to strategy—operational level strategy and human resource level strategy.
Oct. 9 2014, Updated 2:32 p.m. ET
What’s strategy?
In the first series—read here—we focused on Wells Fargo’s (WFC) geographical reach. We also discussed the banking services it offers. In this series, we’ll analyze Wells Fargo’s strategy. Its strategy will help it grow in the coming years. The difference in strategy is what makes Bank of America (BAC) underperform and U.S. Bank (USB) and Wells Fargo outperform.
In this series, we’ll look at the elements in Wells Fargo’s strategy. We’ll also discuss the future goals that Wells Fargo has set for itself. We’ll analyze whether it will be successful in achieving those goals. First, we need to understand what strategy is.
“Strategy” can be defined in many ways. Generally, strategy is a long-term plan. For this series, the best definition is the one given by Roger Martin—a management guru. He defined strategy as “an integrated set of choices that collectively position the firm in its industry so as to create sustainable advantage relative to competition and deliver superior financial returns.”
Strategy has two main aspects
There are two main aspects to strategy—operational-level strategy and human resource level strategy. Operational-level strategy is all about the elements of how Wells Fargo runs its day-to-day banking operations and how it creates competitive advantages. In the next few parts in this series, we’ll look at elements in Wells Fargo’s operational strategy.
In a way, strategy is just like a bridge. It helps an organization reach its goals by using the various means available. All banks—large multi-national banks like JP Morgan (JPM) or mid-sized U.S.-focused banks like U.S. Bank—have their own unique strategies. USB is part of the Financial Select Sector SPDR (XLF).