Swot

Wachovia SWOT Analysis

SWOT Analysis

Strengths

One of the greatest strengths that Wachovia Corporation has is their organizational structure. Due to the large number of branches, they needed to create a fairly flat organizational structure. By dividing their overall territory into specific regions, they are able to appoint regional presidents to oversee each individual area; this allows the regional presidents to be able to handle problems within their own region more affectively than would a centralized board of directors. Also, Wachovia Corporation has a senior manager overseeing each function of the company. This allows each senior manager to become specialized in their own area, thus increasing their managerial effectiveness.

Another strength within Wachovia is the diversity of their board of directors. Wachovia's board of directors totals 18 people--9 from the old Wachovia and 9 from the old First Union By doing this, the Wachovia Corporation has members that have been in control of both corporations, prior to the merger. Besides previously being on the board of directors for First Union and Wachovia, each member has had other experiences that contribute to the success of the new company (refer to the table titled "Wachovia Corporation's Board of Directors").

How Wachovia is perceived by the general public bears a heavy influence on their success in many areas and can be considered a strength. Most important to Wachovia corporation is their customers and how they are perceived by those customers is reflected in their continually positive ratings from the American Customer Satisfaction Index, which measures different industries each quarter and covers banking in the fourth quarter. Of the 2003 results, Wachovia is in front with a score of 76 out of a possible 100 -- above the 75 average for the banking industry. This is the third year in a row that Wachovia has succeeded in getting the first place ranking (American Banker, 2004).

Other ratings that reflect well on Wachovia's success include being named the best performing stock in 2002 among the top 50 U.S. banks and among global financial service companies (Wachovia.com). In November of 2002, Moody's Investor Service upgraded Wachovia's debt rating to double A3 (Wachovia.com). On the inside, voluntary employee attrition levels show a continuous improvement since their merger with First Union bank which can be a reflection of their success in integrating their newly merged employees and creating a positive working environment (thevault.com). Wachovia's public image is reinforced through their generous contributions, with more than $85 million given to charitable organizations, and an additional $19 billion to community development loans and investments (Wachovia.com).

The acquisition of other companies is one of the primary methods that Wachovia has used to grow its numbers and can be considered a strength in regard to how these mergers have expanded the company's reach into the banking and securities markets. Among its most recent mergers were First Union in September of 2001 which added to Wachovia's banking customer base. The acquisition of Prudential Securities in July of 2003 has given Wachovia a significantly increased presence in the Securities market, which now ranks third in terms of client assets and number of brokers (Wachovia.com). In addition, the merger with Prudential has made Wachovia Securities the 12th largest mutual fund company by assets (Gaffen, 2003). Wachovia's size allows it to be more competitive with larger banking companies, like Bank of America and Bank One, and expand its product line.

Weaknesses

While Wachovia does show some positive strengths in its organization, it also has some weaknesses. The company's rapid growth through acquisition has created a total of more than 87,000 employees under the Wachovia name. There are several challenges that come with expanding a corporation which take time to address and correct. Some of these challenges can be considered weaknesses to Wachovia Corporation at this time.

The technology required to accommodate the vast amount of incoming data and to bridge some 800 existing data platforms has been an issue for Wachovia Corporation (www.knowledgestorm.com). Currently, Wachovia is using Documentum as its data platform, which is an improvement of its prior software choice which could only accommodate a refreshing of data once a week. With Documentum, updates in customer account information and activity is reflected every 24 hours, but only within the computer systems of Customer Service Center databases. Updates may take days longer to be processed elsewhere in Wachovia's systems. Time gaps could be creating difficulty for employees that need that information to be timely. Finding a way to streamline the incoming and outgoing data across all platforms would enhance employee communication and offer up to date information for processing.

Because of Wachovia's merging activities, there has been a great deal of change occurring on the inside. The need to rapidly introduce new skills and exchange knowledge among its employees is vital to the process of becoming more efficient. The issue of assimilating a diverse base of employees from various companies into one coherent organization requires a large amount of training and communication. Wachovia Corporation needs a solution that could address the need for a faster, more efficient form of training and updating.

Wachovia Corporation's lack of presence on the West Coast and Central US is causing Wachovia to miss out on potential customers. Wachovia could take advantage of their status of being the largest East Coast banking franchise and the nation's fifth largest bank holding company, by opening branches in the Central and Western US.

Opportunities

It is projected that the population of internet users will increase through 2005 from its current 111 million (David, 2003). This provides an opportunity for Wachovia to show itself as a premier internet banking service by offering the convenience of accessing as many banking and investing products as possible via the internet.

A result of Wachovia's recent merging activities is that now it will have the resources to branch out to the mid and western regions of the U.S. Expanding its presence into other states will increase Wachovia's