PESTEL Analysis of Wells Fargo | The Best Financial Service

PESTEL Analysis of Wells Fargo

To study the macro business environment of Wells Fargo, PESTEL is one of the best tools. It helps to determine the company’s political, economic, social, technological, environmental, and legal factors. These factors create a big impact on the business performance of the company. Any change in these factors can change the business conditions as well as the company’s performance. It is necessary to focus on these factors regularly in order to avoid the risk of a big disaster. PESTEL helps to identify the ongoing challenges in the business environment. It also helps to streamline the company’s business and can increase its profitability. Let’s discuss the complete PESTEL analysis of Wells Fargo:

Political Factors:

The role of political factors is huge in identifying the aspects that can hurt the company’s long-term profitability. Wells Fargo operates in various countries and competitive financial environments. So, it is very susceptible to systematic risks along with political changes. The company should keep an eye on various political factors of the countries in which it operates. The company must analyze the following political factors very closely:

• Political stability of the country
• Armed conflicts
• Corruption level in the financial sector
• Interference and bureaucracy
• Legal system or infrastructure
• Intellectual property rights
• Tariffs and trade regulations associated with financial services
• Trading partners
• Anti-trust laws
• Pricing strategy
• Taxation
• Work-related regulations and laws
• Necessary worker benefits
• Industrial safety
• Labeling of products in financial sector

Economic Factors:

In economic factors, there are several things that impact the business of Wells Fargo, like foreign exchange rate, inflation rate, savings rate, economic cycle, and interest rate. However, they are real indicators that predict the future of the market. Accordingly, they are crucial for Wells Fargo to achieve a competitive edge in the market. 

Before starting a business in any country, the company should clearly identify these economic factors.

• Kind of economic structure in the country
• Stability of economic condition of the country
• Government interference in the financial market
• Exchange rates
• Efficiency of financial institutions in the country
• Infrastructure quality
• Skill level of employees
• Literacy rate
• Discretionary income
• Interest rates
• Inflation rate
• Economic growth rate

Social Factors:

The behavior of consumers towards a company decides the growth of the company. Basically, they are called as societal concerns and social norms. It predicts users’ spending behavior according to their beliefs, culture, and overall mood. For staying ahead of the competition, Wells Fargo must analyze the following social factors carefully:

• Demographics
• Skill level of people
• Power structure
• Class structure
• Education level
• Gender roles
• Social conventions
• Attitudes
• Leisure trends

Technological Factors:

There is no involvement of physical working in the case of Wells Fargo. It is a digital finance company, and they should up-to-date their infrastructure to provide better and fast service to users. It is hard to stay modern because technology is an ever-evolving thing. But, adopting the latest technology is important for Wells Fargo. Moreover, the company can make partnerships and acquisitions with other tech firms to increase their performance and technology. here are some technological factors that Wells Fargo should keep in mind:

• Recent technological advancements adopted by the company and competitors
• Impact of technology on offerings
• Cost impact on adopting new technology
• Impact of technology on supply chain
• Technological diffusion

Environmental Factors:

Today, the environment is one of the biggest concerns for companies. The number of eco-conscious people is growing every day, and they can impact the profitability of the company in case of any problem regarding the environment from the company. Accordingly, understanding the environmental laws, liability laws, etc., is crucial for better functioning. The following environmental factors are important for Wells Fargo:

• Recycling
• Weather
• Climate change
• Renewable energy sources
• Endangered species
• Environmental regulations
• Proper waste management
• Green approach
• Water pollution
• Air pollution

Legal Factors:

In various countries, the legal structure or framework is not so strong. Moreover, they do not have a proper framework for protecting intellectual property rights. Companies like Wells Fargo must keep these factors in mind before venturing into a new market or country. Here are some important legal factors that the company should consider:

• Discrimination law
• Anti-trust law
• Data protection
• Employment law
• Health and safety law
• Copyrights
• Ecommerce and consumer protection

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