CASE ANALYSIS: WELLS FARGO- NORWEST MERGER OF EQUALS (A) Case Solution
On the other hand, Norwest was also one of the largest banks and it was ranked 11th among its peers in 1997;the rating was given to the Norwest bank because of the high amount of its assets.The company was working on a vast range of financial services ranging from consumer banking to mutual funds and consultancy services.
Both of the companies were considering merging with each other as they would be able to expand their service and operation after the merger. However, the merger of any company is an example of horizontal integration which allows both of the companies to expand their scope of business but we have seen many failures of horizontal integration in past.
In addition, both of the companies, if they merge with each other, will have the most diversified financial services among the industry members.Moreover, they will have $191 billion in assets combined with more than 90,000 employees which will make the new company as the sixth largest bank of the United States with more than 20 million customers and more than 5,777 financial services stores. Moreover, the business has expanded its operations in 50 states including the Canada, the Caribbean, Latin America and internationally.
However, many of the analysts of the industry see this deal as an opportunity while some look at it differently.Furthermore, there may be many challenges which the companies will face and the main obstacle will be the cultural differences.
As indicated by an internal executive, the biggest threat will be the cultural difference and their integration in the merged company, as Norwest sees its bankers as sales people and its branches as a retail outlet whereas Wells Fargo looks at it differently. In this study we will try to answer all the possible questions which can be raised on the merger and we will also try to find out the possible solutions and alternatives to the problem.
Cultures and Cultural Differences of the two companies
As we discussed above that there may be several challenges which the merged company may face, the main issue which was expected after the merger was the mismatch or the differences among the culture of both of the companies. Moreover, this thing was also denoted by many industry analysts as the cultures of both the companies were completely different from each other as Wells Fargo was known as the best customer service provider and was a pioneer name in providing best after sales services.On the other hand,Norwest was merely focused towards revenue and profitability as the company saw its branches as retail outlets and its bankers as sales representatives who were only there to increase sales however, this thing was totally unethical and opposite of the culture of the Wells Fargo as Wells Fargo’s main focus was to give the best services to the clients regardless of the size of the business……………
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