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Industry
Revenue
US$684.4
billion
Industry
Employmen
t
1,564,368
Industry
Growth Rate
+6.0% predicted
2015-2020
Main
Companies
JPMorgan Chase
Wells Fargo
Bank of America
Citigroup
Incorporated
# of Employees
(2015)
Canton of Zurich,
Switzerland
US$74.7 Billion
60,155
CHF$3,422 Million
# of Employees
(2015)
$264 Billion
275,000
$23.06 Billion
JPMorga
n Chase
Citigroup
Wells
Fargo
Morgan
Stanley
Industry
Average
Net
Income
(USD)
21,276
million
7,300
million
23,057
million
3,667
million
3,640
million
Total
Stockhold
ers Equity
(USD)
232,065
million
210,500
million
185,262
million
70,900
million
54,368
million
Return on
Equity (%)
9.38
3.47
12.45
5.17
7.62
UBS
6.7
Economic
Average ROE
UBS Average
ROE
Industry Influence
Strategy Influence
7.62%
9%
6.7%
-1.38%
-0.092%
Return on
Equity
9%
1.38
%
7.6
2%
-.92
%
6.7
%
Strategy Companys
InfluenceProfitability
Economic
Average ROE
Wells Fargo
Average ROE
Industry Influence
Strategy Influence
7.62%
9%
12.45%
-1.38%
4.83%
Return on
Equity
9%
1.38
%
4.83
%
7.6
2%
12.4
5%
Strategy Companys
InfluenceProfitability
Threat
Suppliers
Power of Suppliers
Power of Suppliers: HIGH
Key Suppliers: Customer
deposits, Loans from other
financial institution
Suppliers concentration
dispersed
No forward integration
Fluctuation of Interest rates
Potential Entry
of Rivalry: HIGH
Rivals: JPMorgan Chase, Wells Fargo, Bank of
America
Strong Brand Identity
Low Industry Growth
Players have similar strategies
Lowers Industry as intense competition lowers profit
margin
Key
Industry
Rivalry
Buyers
Power of Buyers
Power of Buyers: MEDIUM
Key Buyers: Individual Customers,
Threat of Substitutes
Multiple choices for Buyers
Threat of Substitutes: LOW
Only substitutes for selected services, such as insurances, Product & Service are Necessity for
Buyers
mutual funds
Strong Brand Identity
Possible substitutes are very limited
Doesnt lower industry , because threat is very low.
Substitutes
Impact on 5 Forces
Buyer Power
Rivalry
Substitute
Buyer Power
Potential Entry
Mean Market
Cap
Mean Net
Income
Industry
$ 74,886
$106,777
UBS
$ 73,337
$ 4,838
Potential
Entry
Supplie
rs
Industry
Rivalry
Substitutes
Buyers
Leading market share in mortgage and auto loans; strong in other retail and commercial loans
Diversified revenue sourcesstrong in interest and non-interest income
Large, low cost deposit base
Strong risk culturestrengthening it even more
Experienced management team and satisfied employees
Strong returns versus peers with lower volatility
Lower risk profile than large peers
Broader distribution, scale, and product set than regional banks
Tangible resources Wells Fargo is the best capitalized bank among its competition, only large bank
asides from Bank of America to not have a capital shortfall to meet the regulatory leverage ratio
requirement of 5%
Intangible Strong brand recognition, exceptional client loyalty and retention, low employee turnover
believes people are a competitive advantage source
Best capitalized
Client loyalty
Is it Valuable (V)?
Yes
Yes
Yes
Yes
Is it Rare (R)?
Is it Difficult to Imitate
(I)?
No, it is possible to
create customer reliance
via programs and
benefits
Is firm organized to
capture value?
Yes
Yes
Resources
Capital Competency
Young Professionals
Program
Expert Financial
Advising
Is it Valuable (V)?
yes
yes
yes
Is it Rare (R)?
Is it Difficult to Imitate
(I)?
No
No
Is firm organized to
capture value?
No
Yes
Yes
Horizontal Scope
Business division
Segment
Products/Services
Banking in
Switzerland
Individual,
Corporate and
Institutional
clients
Wealth
Management in
the USA
Individuals and Security backed lending, UBS mortgage, UBS credit and
small businesses debit cards, education planning, retirement plans, estate
planning
Horizontal Scope
Vertical Scope
Scope is mixed given the high power of suppliers and the way the commercial bank is
able to utilize these deposits to provide loans and other services to customers
UBS can:
Regulatory fines
Perceived trustworthiness of bank
Lack of market penetration in certain areas
UBS can:
Bibliography:
Our Strategy, Wells Fargo, accessed November 2nd, 2015.
https://www.wellsfargo.com/about/corporate/vision-and-values/our-strategy/
Our Six Priorities, Wells Fargo, accessed November 2nd, 2015.
https://www.wellsfargo.com/about/corporate/vision-and-values/our-priorities/
Saul Perez, Why Wells Fargos strategy is different from other banks,. Market Realist, October 9th, 2014.
http://marketrealist.com/2014/10/why-wells-fargo-is-leveraging-technology-to-cut-costs/
Alden, William. 2014. 'Signs Of Progress In UBS Investment Bank Overhaul'. Dealbook.
http://dealbook.nytimes.com/2014/02/04/signs-of-progress-in-ubs-investment-bank-overhaul/?_r=0.
BBC News,. 2015. 'UBS Confirms Fresh Tax Evasion Probe In The US - BBC News'. http://www.bbc.com/news/business-31349135.
Bloomberg.com,. 2012. 'Swiss Attorney General Opens Criminal Investigation Of UBS'.
http://www.bloomberg.com/news/articles/2012-08-31/swiss-attorney-general-opens-criminal-investigation-of-ubs.
Bloomberg.com,. 2015. 'BlackrockS Hildebrand Sees Credit Suisse Doing UBS-Like Revamp'.
http://www.bloomberg.com/news/articles/2015-06-29/blackrock-s-hildebrand-sees-credit-suisse-doing-ubs-like-revamp.
Forbes.com,. 2015. 'Wealth Management, Not Investment Banking, Keeps UBS On Top'.
http://www.forbes.com/sites/halahtouryalai/2014/05/06/wealth-management-not-investment-banking-keeps-ubs-on-top/.
Bibliography cont.
Wetfeet,. 'Industry Overview: Commercial Banking - Wetfeet.Com'. N.p., 2015. Web. 3 Nov. 2015.
Reuters,. 2015. 'UBS To Pay $545 Mln Over Forex Scandal, Rivals Await Fate'.
http://www.reuters.com/article/2015/05/20/banks-forex-settlement-idUSL1N0YB0FZ20150520.
Settlements, UBS. 2015. 'UBS Sets Aside $2 Billion For Currency Rigging And Tax Evasion Settlements'. Business Insider.
http://www.businessinsider.com/ubs-sets-aside-2-billion-for-currency-rigging-and-tax-evasion-settlements-2014-10.
Ubs.com,. 2015. 'Our Strategy | UBS Global Topics'. https://www.ubs.com/global/en/about_ubs/about_us/strategy.html.
Schwarz, Jrgen et al. 'Five Trends Disrupting The Corporate Banking Landscape'. www.bcgperspectives.com. N.p., 2015. Web. 3 Nov. 2015.
Financials.morningstar.com,. 'UBS: UBS Group AG Top Competitors And Peers'. N.p., 2015. Web. 3 Nov. 2015.
UBS.com. 2015. UBS Group AG 2014 Annual Report. N.P., 2015. Web. 3 Nov. 2015.
https://www.ubs.com/content/dam/static/epaper/index.html?id=c4f48238
IBIS World. 2015. Industry Report: Commercial Banking Industry in the US.
http://clients1.ibisworld.com.ezproxy.bu.edu/reports/us/industry/default.aspx?entid=1288
Liyan Chen. 2015 Global 2000: The Worlds Largest Banks. Forbes.com. 2015. Web. 3 Nov. 2015. http://www.forbes.com/sites/liyanchen/2015/05/06/2015global-2000-the-worlds-largest-banks/
JPMorganChase.com. 2015. JPMorgan Chase 2014 Annual Report. Web. 3 Nov. 2015.
Citigroup.com,. 'Citi | 2014 Annual Report'. N.p., 2015. Web. 3 Nov. 2015.
Wellsfargo.com. 2015. Wells Fargo 2014 Annual Report. N.p., 2015. Web. 3 Nov. 2015.
Sites.google.com,. 'Porter's 5 Forces And The Banking Industry - The Banking Industry And The Internet'. N.p., 2015. Web. 3 Nov. 2015.