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Wells Fargo - WikipediaWells FargoFrom Wikipedia, the free encyclopediaJump to navigationJump to searchFor other uses, see Wells Fargo (disambiguation).Wells Fargo & CompanyCompany logo since 2009Wells Fargo's headquarters complex in San Francisco, CaliforniaTypePublicTraded asNYSE: WFCS&P 100 componentS&P 500 componentISINUS9497461015IndustryBankingFinancial servicesInsurancePredecessorsCollapsible list[show]FoundedMarch 18, 1852 (167 years ago) in San Francisco, California, USFoundersHenry WellsWilliam FargoHeadquarters420 Montgomery Street, San Francisco, California, USNumber of locations8,050 branches (2018)13,000 ATMs (2018)Area servedWorldwideKey peopleElizabeth Duke(Chair)C. Allen Parker(Interim President & CEO)John R. Shrewsberry(CFO)ProductsCollapsible list[show]RevenueUS$86.40 billion (2018)Operating incomeUS$30.28 billion (2018)Net incomeUS$22.39 billion (2018)Total assetsUS$1.895 trillion (2018)Total equityUS$197.06 billion (2018)OwnerBerkshire Hathaway (10%)Membersc.70 million (2018)Number of employeesc.258,700 (2018)SubsidiariesWells Fargo AdvisorsWells Fargo Bank, N.A.Wells Fargo RailWells Fargo SecuritiesRatingFitch: A+ (2018)Moody's: A2 (2018)S&P: A− (2018)Websitewellsfargo.comFootnotes / references[1][2][3][4][5][6][7][8]Wells Fargo branch in Berkeley, CaliforniaWells Fargo & Company is an American multinational financial servicescompany headquartered in San Francisco, California, with central offices throughout the United States.[9]It is the world's fourth-largest bank by market capitalization and the fourth largest bank in the US by total assets.[10][11]Wells Fargo is ranked #26 on the 2018 Fortune 500 rankings of the largest US corporations by total revenue.[12]In July 2015, Wells Fargo became the world's largest bank by market capitalization, edging past ICBC,[11]before slipping behind JPMorgan Chase in September 2016, in the wake of a scandal involving the creation of over 2 million fake bank accounts by Wells Fargo employees.[10]Wells Fargo fell behind Bank of America to third by bank deposits in 2017[13]and behind Citigroup to fourth by total assets in 2018.[14]The firm's primary operating subsidiary is national bank Wells Fargo Bank, N.A., which designates its main office as Sioux Falls, South Dakota. Wells Fargo in its present form is a result of a merger between San Francisco–based Wells Fargo & Company and Minneapolis-based Norwest Corporation in 1998 and the subsequent 2008 acquisition of Charlotte-based Wachovia. Following the mergers, the company transferred its headquarters to Wells Fargo's headquarters in San Francisco and merged its operating subsidiary with Wells Fargo's operating subsidiary in Sioux Falls. Along with JPMorgan Chase, Bank of America, and Citigroup, Wells Fargo is one of the "Big Four Banks" of the United States.[15]As of June 2018, it had 8,050 branches and 13,000 ATMs.[2]In 2018 the company had operations in 35 countries with over 70 million customers globally.[2]In February 2014, Wells Fargo was named the world's most valuable bank brand for the second consecutive year[16]in The Banker and Brand Financestudy of the top 500 banking brands.[17]In 2016, Wells Fargo ranked 7th on the Forbes Magazine Global 2000 list of largest public companies in the world and ranked 27th on the Fortune 500 list of the largest companies in the US.[7][18]In 2015, the company was ranked the 22nd most admired company in the world, and the 7th most respected company in the world.[7]As of December 2018, the company had a Standard & Poors credit rating of A−.[8]However, for a brief period in 2007, the company was the only AAA‑rated bank, reflecting the highest credit rating from two firms.[19]On February 2, 2018, the US Federal Reserve Bank barred Wells Fargo from growing its nearly US$2 trillion-asset base any further, based upon years of misconduct, until Wells Fargo fixes its internal problems to the satisfaction of the Federal Reserve.[20]In April 2018, The Wall Street Journal reported that the US Department of Labor had launched a probe into whether Wells Fargo was pushing its customers into more expensive retirement plans as well as intoretirement funds managed by Wells Fargo itself.[21][22]Subsequently in May 2018, The Wall Street Journal reported that Wells Fargo's business banking group had improperly altered documents about business clients in 2017 and early 2018.[23]In June 2018, Wells Fargo began retreating from retail bankingin the Midwestern United States by announcing the sale of all its physical bank branch locations in Indiana, Michigan, and Ohio to Flagstar Bank.[24][13]Contents1History1.1Wells Fargo History Museums1.2Key dates1.3Wachovia acquisition1.4Investment by US Treasury Department during 2008 financial crisis1.4.1History of Wells Fargo Securities1.5Environmental record2Operations and services2.1Community banking2.1.1Consumer lending2.1.2Wells Fargo private student loans2.1.3Equipment lending2.2Wealth and Investment Management2.2.1Wells Fargo Asset Management2.2.2Wells Fargo Securities2.3Cross-selling2.4International operations2.5Charter3Lawsuits, fines and controversies3.11981 MAPS Wells Fargo embezzlement scandal3.2Higher costs charged to African-American and Hispanic borrowers3.3Failure to monitor suspected money laundering3.4Overdraft fees3.5Settlement and fines regarding mortgage servicing practices3.6SEC fine due to inadequate risk disclosures3.7Lawsuit by FHA over loan underwriting3.8Lawsuit due to premium inflation on forced place insurance3.9Lawsuit regarding excessive overdraft fees3.102015 Violation of New York credit card laws3.11Executive compensation3.12Tax avoidance and lobbying3.13Prison industry investment3.14SEC settlement for insider trading case3.15Wells Fargo account fraud scandal3.16Racketeering lawsuit for mortgage appraisal overcharges3.17Dakota Access Pipeline investment3.18Failure to comply with document security requirements3.19Connections to the gun industry and NRA3.20Discrimination against female workers3.21Auto insurance4CEO-to-worker pay ratio5See also6Notes7References8External linksHistory[edit]Main article: History of Wells FargoWells Fargo History Museums[edit]The company operates 12 museums, most known as a Wells Fargo History Museum,[25]in its corporate buildings inCharlotte, North Carolina, Denver, Colorado, Des Moines, Iowa, Los Angeles, California, Minneapolis, Minnesota,Philadelphia, Pennsylvania, Phoenix, Arizona, Portland, Oregon, Sacramento, California and San Francisco, California. Displays include original stagecoaches, photographs, gold nuggets and mining artifacts, the Pony Express, telegraphequipment and historic bank artifacts. The company also operates a museum about company history in the Pony Express Terminal in Old Sacramento State Historic Park in Sacramento, California, which was the company's second office,[26]and the Wells Fargo History Museum in Old Town San Diego State Historic Park in San Diego, California.[27]Wells Fargo operates the Alaska Heritage Museum in Anchorage, Alaska, which features a large collection of Alaskan Native artifacts, ivory carvings and baskets, fine art by Alaskan artists, and displays about Wells Fargo history in the Alaskan Gold Rush era.[28]Key dates[edit]A late 19th Century Wells Fargo Bank in Apache Junction, Arizona1879 Wells Fargo Stagecoach on exhibit in the Wells Fargo Museum in PhoenixThe Wells Fargo Stage Stop built in 1872 in Black Canyon City, ArizonaWells Fargo bank in Chinatown,Houston, TexasA remodeled Wells Fargo bank inFort Worth, TexasWells Fargo in Laredo, Texas1852: Henry Wells and William G. Fargo, the two founders of American Express, formed Wells Fargo & Company to provide express and banking services to California.1860: Wells Fargo gained control of Butterfield Overland Mail Company, leading to operation of the western portion of the Pony Express.1866: "Grand consolidation" united Wells Fargo, Holladay, and Overland Mail stage lines under the Wells Fargo name.1905: Wells Fargo separated its banking and express operations; Wells Fargo's bank was merged with the Nevada National Bank to form the Wells Fargo Nevada National Bank.1918: As a wartime measure, the US Federal Government nationalized Wells Fargo's express franchise into a federal agency known as the US Railway Express Agency. The US Federal Government took control of the express company. The bank began rebuilding but with a focus on commercial markets. After the war, REA was privatized and continued service until 1975.1923: Wells Fargo Nevada merged with the Union Trust Company to form the Wells Fargo Bank & Union Trust Company.1929: Northwest Bancorporation was formed as a banking association.1954: Wells Fargo & Union Trust shortened its name to Wells Fargo Bank.1960: Wells Fargo merged with American Trust Company to form the Wells Fargo Bank American Trust Company.1962: Wells Fargo American Trust again shortened its name to Wells Fargo Bank.1968: Wells Fargo converted to a federal banking charter, becoming Wells Fargo Bank, N.A. Wells Fargo merged with Henry Trione's Sonoma Mortgage in a $10.8 million stock transfer, making Trione the largest shareholder in Wells Fargo until Warren Buffett and Walter Annenberg later surpassed him.[29]1969: Wells Fargo & Company holding company was formed, with Wells Fargo Bank as its main subsidiary.1982: Northwest Bancorporation acquired consumer finance firm Dial Finance which is renamed Norwest Financial Service the following year.1983: Northwest Bancorporation was renamed Norwest Corporation.1983: White Eagle, largest US bank heist to date took place at a Wells Fargo depot in West Hartford, Connecticut.1986: Wells Fargo acquired Crocker National Corporation from Midland Bank.1987: Wells Fargo acquired the personal trust business of Bank of America.1988: Wells Fargo acquired Barclays Bank of California from Barclays plc.[30]1995: Wells Fargo became the first major US financial services firm to offer Internet banking.1996: Wells Fargo acquired First Interstate Bancorp for US$11.6 billion.[31]1998: Wells Fargo Bank was acquired by Norwest Corporation of Minneapolis.[32](Norwest was the surviving company; however, it chose to continue business under the more well-known Wells Fargo name.)2000: Wells Fargo Bank acquired National Bank of Alaska.[33]2000: Wells Fargo acquired First Security Corporation.[34]2001: Wells Fargo acquired H.D. Vest Financial Services for US$128 million, but sold it in 2015 for US$580 million.[35]2007: Wells Fargo acquired CIT's construction unit.[36]2007: Wells Fargo acquired Placer Sierra Bank.2007: Wells Fargo acquired Greater Bay Bancorp, which had US$7.4 billion in assets, in a US$1.5 billion transaction.[37][38]2008: Wells Fargo acquired United Bancorporation of Wyoming.[39]2008: Wells Fargo acquired Century Bancshares of Texas.[40]2008: Wells Fargo acquired Wachovia Corporation.2009: Wells Fargo acquired North Coast Surety Insurance Services.[41]2012: Wells Fargo acquired Merlin Securities.[42][43]2012: Wells Fargo acquired stake in The Rock Creek Group LP.2019: CEO Tim Sloan resigns causing stock to jump and leaves General Counsel Allen Parker as Interim CEOWachovia acquisition[edit]A former Wachovia branch converted to Wells Fargo in the fall of 2011 in Durham, North CarolinaOn October 3, 2008, Wachovia agreed to be bought by Wells Fargo for about US$14.8 billion in an all-stock transaction. This news came four days after the USFederal Deposit Insurance Corporation (FDIC) made moves to have Citigroup buy Wachovia for US$2.1 billion. Citigroup protested Wachovia's agreement to sell itself to Wells Fargo and threatened legal action over the matter. However, the deal with Wells Fargo overwhelmingly won shareholder approval since it valued Wachovia at about seven times what Citigroup offered. To further ensure shareholder approval, Wachovia issued Wells Fargo preferred stock that holds 39.9% of the voting power in the company.[44]On October 4, 2008, a New York state judge issued a temporary injunction blocking the transaction from going forward while the situation was sorted out.[45]Citigroup alleged that they had an exclusivity agreement with Wachovia that barred Wachovia from negotiating with other potential buyers. The injunction was overturned late in the evening on October 5, 2008, by New York state appeals court.[46]Citigroup and Wells Fargo then entered into negotiations brokered by the FDIC to reach an amicable solution to the impasse. Those negotiations failed. Sources say that Citigroup was unwilling to take on more risk than the US$42 billion that would have been the cap under the previous FDIC-backed deal (with the FDIC incurring all losses over US$42 billion). Citigroup did not block the merger, but indicated they would seek damages of US$60 billion for breach of an alleged exclusivity agreement with Wachovia.[47]Investment by US Treasury Department during 2008 financial crisis[edit]On October 28, 2008, Wells Fargo was the recipient of US$25 billion of Emergency Economic Stabilization Act funds in the form of a preferred stock purchase by the US Treasury Department.[48][49]Tests by the US Federal Government revealed that Wells Fargo needed an additional US$13.7 billion in order to remain well capitalized if the economy were to deteriorate further under stress test scenarios. On May 11, 2009, Wells Fargo announced an additional stock offering which was completed on May 13, 2009, raising US$8.6 billion in capital. The remaining US$4.9 billion in capital was planned to be raised through earnings. On Dec. 23, 2009, Wells Fargo redeemed the US$25 billion of preferred stock issued to the US Treasury. As part of the redemption of the preferred stock, Wells Fargo also paid accrued dividends of US$131.9 million, bringing the total dividends paid to US$1.441 billion since the preferred stock was issued in October 2008.[50]History of Wells Fargo Securities[edit]Wells Fargo Securities was established in 2009 to house Wells Fargo's capital markets group which it obtained during the Wachovia acquisition. Prior to that point, Wells Fargo had little to no participation in investment banking activities, though Wachovia had a well established investment banking practice which it operated under the Wachovia Securities banner.Wachovia's institutional capital markets and investment banking business arose from the merger of Wachovia and First Union. First Union had bought Bowles Hollowell Connor & Co. on April 30, 1998 adding to its merger and acquisition, high yield, leveraged finance, equity underwriting, private placement, loan syndication, risk management, and public financecapabilities.[51]Legacy components of Wells Fargo Securities include Wachovia Securities, Bowles Hollowell Connor & Co., Barrington Associates, Halsey, Stuart & Co., Leopold Cahn & Co., Bache & Co.. Prudential Securities, A.G. Edwards, Inc. and the investment banking arm of Citadel LLC.[52]Duke Energy Center in Charlotte, North Carolina home of Wells Fargo Securities[53]Environmental record[edit]In 2009, Wells Fargo ranked #1 among banks and insurance companies, and #13 overall, inNewsweek Magazine's inaugural "Green Rankings" of the country's 500 largest companies.[54]In 2013, the company was recognized by the EPA Center for Corporate Climate Leadership as a Climate Leadership Award winner, in the category "Excellence in Greenhouse Gas Management (Goal Setting Certificate)"; this recognition was for the company's aim to reduce its absolute greenhouse gas emissions from its US operations by 35% by 2020 versus 2008 levels.[55]As of 2013, Wells Fargo had provided more than US$6 billion in financing for environmentally beneficial business opportunities, including supporting 185 commercial-scale solar photovoltaic projects and 27 utility-scale wind projects nationwide.[56][better source needed]Wells Fargo has launched what it believes to be the first blog among its industry peers to report on its environmental stewardship and to solicit feedback and ideas from its stakeholders.[57][58]We want to be as open and clear as possible about our environmental efforts – both our accomplishments and challenges – and share our experiences, ideas and thoughts as we work to integrate environmental responsibility into everything we do," said Mary Wenzel, director of Environmental Affairs. "We also want to hear and learn from our customers. By working together, we can do even more to protect and preserve natural resources for future generations.—Mary Wenzel, director of Environmental Affairs, Wells Fargo, 2010 press releaseOperations and services[edit]Map of Wells Fargo branches in August 2015Wells Fargo delineates three different business segments when reporting results:Community Banking; Wholesale Banking; and Wealth, Brokerage and Retirement.Community banking[edit]The Community Banking segment includes Regional Banking, Diversified Products, and Consumer Deposits groups, as well as Wells Fargo Customer Connection (formerly Wells Fargo Phone Bank, Wachovia Direct Access, the National Business Banking Center, and Credit Card Customer Service). Wells Fargo also has around 2,000 stand-alone mortgage branches throughout the country.[59]There are mini-branches located inside of other buildings, which are almost exclusively grocery stores, that usually contain ATMs, basicteller services, and, space permitting, an office for private meetings with customers.[60]In March 2017, Wells Fargo announced a plan to offer smartphone-based transactions with mobile wallets including Wells Fargo Wallet, Android Pay and Samsung Pay.[61]Consumer lending[edit]As of Q3 2011, Wells Fargo Home Mortgage was the largest retail mortgage lender in the United States, originating one out of every four home loans.[62]Wells Fargo services US$1.8 trillion in home mortgages, the second largest servicing portfolio in the US[63]It was reported in 2012 Wells Fargo reached 30% market share for US mortgages, however, the then-CEO John Stumpf had said the numbers were misleading because about half of that share represented the aggregation of smaller loans that were then sold on in the secondary market. In 2013, its share was closer to 22%; of which eight percentage points was aggregation.[64]Wells Fargo private student loans[edit]Wells Fargo private student loans are available to students to pay for college expenses, such as tuition, books, computers, or housing.[65]Loans are available for undergraduate, career and community colleges, graduate school, law school and medical school. Wells Fargo also provides private student loan consolidation and student loans for parents.[citation needed]Equipment lending[edit]Wells Fargo has various divisions that finance and lease equipment to different types of companies.[66][citation needed]One venture is Wells Fargo Rail, which in 2015 agreed to the purchase of GE Capital Rail Services and merged in with First Union Rail.[67]In late 2015, it was announced that Wells Fargo would buy three GE units focused on business loans equipment financing.[68]Wealth and Investment Management[edit]Wells Fargo Advisors headquarters in St. Louis, MissouriWells Fargo offers investment products through its subsidiaries, Wells Fargo Investments, LLC and Wells Fargo Advisors, LLC, as well as through national broker/dealer firms. The company also serves high-net-worth individuals through its private bank and family wealthgroup.The logo for Wells Fargo AdvisorsWells Fargo Advisors is the brokerage subsidiary of Wells Fargo, located in St. Louis, Missouri. It is the third largest brokerage firm in the United States as of the third quarter of 2010 with US$1.1 trillion retail client assets under management.[7]Wells Fargo Advisors was known as Wachovia Securities until May 1, 2009, when it legally changed names following the Wells Fargo's acquisition of Wachovia Corporation.In September 2018, Wells Fargo announced to cut 26,450 jobs by 2020 to reduce costs by US$4 billion.[69]Wells Fargo Asset Management[edit]Wells Fargo Funds Management, LLCTypeSubsidiaryIndustryMutual fundsHeadquartersKansas City, MissouriArea servedWorldwideWebsitewellsfargofunds.comWells Fargo Asset Management (WFAM) is the trade name for the mutual funddivision of Wells Fargo & Co. Mutual funds are offered under the Wells Fargo Advantage Funds brand name.Wells Fargo Securities[edit]Wells Fargo Securities, LLCTypeSubsidiaryIndustryInvestment BankingHeadquartersCharlotte, North CarolinaArea servedWorldwideWebsitewww.wellsfargo.com/com/securities/The Seagram Building: Home of Wells Fargo Securities' New York offices and trading floorsWells Fargo Securities (WFS) is the investment banking division of Wells Fargo & Co. The size and financial performance of this group is not disclosed publicly, but analysts believe the investment banking group houses approximately 4,500 employees and generates between US$3 and US$4 billion per year in investment banking revenue. By comparison, two of Wells Fargo's largest competitors, Bank of America and J.P. Morgan Chasegenerated approximately US$5.5 billion and US$6 billion respectively in 2011 (not including sales and trading revenue).[70]WFS headquarters are in Charlotte, North Carolina, with other US offices in New York, Minneapolis, Boston, Houston, San Francisco, and Los Angeles, with international offices in London, Hong Kong, Singapore, and Tokyo.Cross-selling[edit]A key part of Wells Fargo's business strategy is cross-selling, the practice of encouraging existing customers to buy additional banking products.[71]Customers inquiring about their checking account balance may be pitched mortgage deals and mortgage holders may be pitched credit card offers in an attempt to increase the customer's profitability to the bank.[72][73]Other banks have attempted to emulate Wells Fargo's cross-selling practices (described byThe Wall Street Journal as a hard sell technique);[72]Forbes magazine describes Wells Fargo as "better than anyone" at the practice.[73]International operations[edit]Wells Fargo has banking services throughout the world, with offices in Hong Kong, London, Dubai, Singapore, Tokyo,Toronto.[74][75]They operate back-offices in India and the Philippines with more than 3,000 staff.[76]Charter[edit]Wells Fargo operates under Charter #1, the first national bank charter issued in the United States. This charter was issued to First National Bank of Philadelphia on June 20, 1863, by the Office of the Comptroller of the Currency.[77]Traditionally, acquiring banks assume the earliest issued charter number. Thus, the first charter passed from First National Bank of Philadelphia to Wells Fargo through its 2008 acquisition of Wachovia, which had inherited it through one of its many acquisitions.Lawsuits, fines and controversies[edit]A Wells Fargo branch in Logan, Utah1981 MAPS Wells Fargo embezzlement scandal[edit]In 1981, it was discovered that a Wells Fargo assistant operations officer, Lloyd Benjamin "Ben" Lewis, had perpetrated one of the largest embezzlements in history, through its Beverly Drive branch. During 1978 - 1981, Lewis had successfully written phony debit and credit receipts to benefit boxing promoters Harold J. Smith (né Ross Eugene Fields) and Sam "Sammie" Marshall, chairman and president, respectively, of Muhammed Ali Professional Sports, Inc. (MAPS), of which Lewis was also listed as a director; Marshall, too, was a former employee of the same Wells Fargo branch as Lewis. In excess of US$300,000 was paid to Lewis, who pled guilty to embezzlement andconspiracy charges in 1981, and testified against his co-conspirators for a reduced five-year sentence.[78](Boxer Muhammed Ali had received a fee for the use of his name, and had no other involvement with the organization.[79])Higher costs charged to African-American and Hispanic borrowers[edit]Illinois Attorney General Lisa Madigan filed suit against Wells Fargo on July 31, 2009, alleging that the bank steers African Americans and Hispanics into high-cost subprime loans. A Wells Fargo spokesman responded that "The policies, systems, and controls we have in place – including in Illinois – ensure race is not a factor..."[80]An affidavit filed in the case stated that loan officers had referred to black mortgage-seekers as "mud people," and the subprime loans as "ghetto loans."[81]According to Beth Jacobson, a loan officer at Wells Fargo interviewed for a report in The New York Times, "We just went right after them. Wells Fargo mortgage had an emerging-markets unit that specifically targeted black churches, because it figured church leaders had a lot of influence and could convince congregants to take out subprime loans." The report goes on to present data from the city of Baltimore, where "more than half the properties subject to foreclosure on a Wells Fargo loan from 2005 to 2008 now stand vacant. And 71 percent of those are in predominantly black neighborhoods."[82]Wells Fargo agreed to pay US$125 million to subprime borrowers and US$50 million in direct down payment assistance in certain areas, for a total of US$175 million.[83][84]Failure to monitor suspected money laundering[edit]In a March 2010 agreement with US federal prosecutors, Wells Fargo acknowledged that between 2004 and 2007 Wachoviahad failed to monitor and report suspected money laundering by narcotics traffickers, including the cash used to buy four planes that shipped a total of 22 tons of cocaine into Mexico.[85]Overdraft fees[edit]In August 2010, Wells Fargo was fined by US District Court judge William Alsup for overdraft practices designed to "gouge" consumers and "profiteer" at their expense, and for misleading consumers about how the bank processed transactions and assessed overdraft fees.[86][87][88]Settlement and fines regarding mortgage servicing practices[edit]On February 9, 2012, it was announced that the five largest mortgage servicers (Ally Financial, Bank of America, Citi,JPMorgan Chase, and Wells Fargo) agreed to a settlement with the US Federal Government and 49 states.[89]The settlement, known as the National Mortgage Settlement (NMS), required the servicers to provide about US$26 billion in relief to distressed homeowners and in direct payments to the federal and state governments. This settlement amount makes the NMS the second largest civil settlement in US history, only trailing the Tobacco Master Settlement Agreement.[90]The five banks were also required to comply with 305 new mortgage servicing standards. Oklahoma held out and agreed to settle with the banks separately.On April 5, 2012, a federal judge ordered Wells Fargo to pay US$3.1 million in punitive damages over a single loan, one of the largest fines for a bank ever for mortgaging service misconduct.[91]Elizabeth Magner, a federal bankruptcy judge in the Eastern District of Louisiana, cited the bank's behavior as "highly reprehensible",[92]stating that Wells Fargo has taken advantage of borrowers who rely on the bank's accurate calculations. She went on to add, "perhaps more disturbing is Wells Fargo's refusal to voluntarily correct its errors. It prefers to rely on the ignorance of borrowers or their inability to fund a challenge to its demands, rather than voluntarily relinquish gains obtained through improper accounting methods."[93]SEC fine due to inadequate risk disclosures[edit]On August 14, 2012, Wells Fargo agreed to pay around US$6.5 million to settle US Securities and Exchange Commission(SEC) charges that in 2007 it sold risky mortgage-backed securities without fully realizing their dangers.[94][95]Lawsuit by FHA over loan underwriting[edit]On October 9, 2012, the US Federal Government sued the bank under the False Claims Act at the federal court inManhattan, New York. The suit alleges that Wells Fargo defrauded the US Federal Housing Administration (FHA) over the past ten years, underwriting over 100,000 FHA backed loans when over half did not qualify for the program. This suit is the third allegation levied against Wells Fargo in 2012.[96]In October 2012, Wells Fargo was sued by United States Attorney Preet Bharara over questionable mortgage deals.[97]Lawsuit due to premium inflation on forced place insurance[edit]In April 2013, Wells Fargo settled a suit with 24,000 Florida homeowners alongside insurer QBE, in which Wells Fargo was accused of inflating premiums on forced-place insurance.[98]Lawsuit regarding excessive overdraft fees[edit]In May 2013, Wells Fargo paid US$203 million to settle class-action litigation accusing the bank of imposing excessiveoverdraft fees on checking-account customers. Also in May, the New York attorney-general, Eric Schneiderman, announced a lawsuit against Wells Fargo over alleged violations of the national mortgage settlement, a US$25 billion deal struck between 49 state attorneys and the five-largest mortgage servicers in the US. Schneidermann claimed Wells Fargo had violated rules over giving fair and timely serving.[64]2015 Violation of New York credit card laws[edit]In February 2015, Wells Fargo agreed to pay US$4 million for violations where an affiliate took interest in the homes of borrowers in exchange for opening credit card accounts for the homeowners. This is illegal according to New York credit card laws. There was a US$2 million penalty with the other US$2 million going towards restitution to customers.[99]Executive compensation[edit]With CEO John Stumpf being paid 473 times more than the median employee, Wells Fargo ranks number 33 among the S&P 500 companies for CEO—employee pay inequality. In October 2014, a Wells Fargo employee earning US$15 per hour emailed the CEO—copying 200,000 other employees—asking that all employees be given a US$10,000 per year raise taken from a portion of annual corporate profits to address wage stagnation and income inequality. After being contacted by the media, Wells Fargo responded that all employees receive "market competitive" pay and benefits significantly above US federal minimums.[100][101]Tax avoidance and lobbying[edit]In December 2011, the non-partisan organization Public Campaign criticized Wells Fargo for spending US$11 million onlobbying and not paying any taxes during 2008–2010, instead getting US$681 million in tax rebates, despite making a profit of US$49 billion, laying off 6,385 workers since 2008, and increasing executive pay by 180% to US$49.8 million in 2010 for its top five executives.[102]As of 2014 however, at an effective tax rate of 31.2% of its income, Wells Fargo is the fourth-largest payer of corporation tax in the US.[103]Prison industry investment[edit]Main article: Prison–industrial complexThe GEO Group, Inc., a multi-national provider of for-profit private prisons, received investments made by Wells Fargo mutual funds on behalf of clients, not investments made by Wells Fargo and Company, according to company statements.[104]By March 2012, its stake had grown to more than 4.4 million shares worth US$86.7 million.[105]As of November, 2012, the latest SEC filings reveal that Wells Fargo has divested 33% of its dispositive holdings of GEO's stock, which reduces Wells Fargo's holdings to 4.98% of Geo Group's common stock. By reducing its holdings to less than 5%, Wells Fargo will no longer be required to disclose some financial dealings with GEO.[106]While a coalition of organizations, National People's Action Campaign, have seen some success in pressuring Wells Fargo to divest from private prison companies like GEO Group, the company continues to make such investments.[107]SEC settlement for insider trading case[edit]In 2015, an analyst at Wells Fargo settled an insider trading case with the US Securities and Exchange Commission (SEC). The former employee was charged with insider trading alongside an ex-Wells Fargo trader.[108]Sadis & Goldberg obtained a settlement that permitted the client to continue in securities industry, while neither admitting nor denying one charge of negligence-based § 17(a)(3) claim, and paying a US$75,000 civil penalty[109]Wells Fargo account fraud scandal[edit]Main article: Wells Fargo account fraud scandalIn September 2016, Wells Fargo was issued a combined total of US$185 million in fines for creating over 1.5 million checking and savings accounts and 500,000 credit cards that its customers never authorized. The US Consumer Financial Protection Bureau issued US$100 million in fines, the largest in the agency's five-year history, along with US$50 million in fines from the City and County of Los Angeles, and US$35 million in fines from the Office of Comptroller of the Currency.[110]The scandal was caused by an incentive-compensation program for employees to create new accounts. It led to the firing of nearly 5,300 employees and US$5 million being set aside for customer refunds on fees for accounts the customers never wanted.[111]Carrie Tolstedt, who headed the department, retired in July 2016 and received US$124.6 million in stock, options, and restricted Wells Fargo shares as a retirement package.[112][113]On October 12, 2016, John Stumpf, the then Chairman and CEO, announced that he would be retiring amidst the controversies involving his company. It was announced by Wells Fargo that President and Chief Operating Officer Timothy J. Sloan would succeed, effective immediately. Following the scandal, applications for credit cards and checking accounts at the bank plummeted.[114]In response to the event, the Better Business Bureau dropped accreditation of the bank,[115]S&P Global Ratings lowered its outlook for Wells Fargo from stable to negative,[116]and several states and cities across the US ended business relations with the company.[117]An investigation by the Wells Fargo board of directors, the report of which was released in April 2017, primarily blamed Stumpf, whom it said had not responded to evidence of wrongdoing in the consumer services division, and Tolstedt, who was said to have knowingly set impossible sales goals and refused to respond when subordinates disagreed with them.[118]The board chose to use a clawback clause in the retirement contracts of Stumpf and Tolstedt to recover US$75 million worth of cash and stock from the former executives.[118]Racketeering lawsuit for mortgage appraisal overcharges[edit]In November 2016, Wells Fargo agreed to pay US$50 million to settle a racketeering lawsuit in which the bank was accused of overcharging hundreds of thousands of homeowners for appraisals ordered after they defaulted on their mortgage loans. While banks are allowed to charge homeowners for such appraisals, Wells Fargo frequently charged homeowners US$95 to US$125 on appraisals for which the bank had been charged US$50 or less. The plaintiffs had sought triple damages under the U S Racketeer Influenced and Corrupt Organizations Act on grounds that sending invoices and statements with fraudulently concealed fees constituted mail and wire fraud sufficient to allege racketeering.[119]Dakota Access Pipeline investment[edit]Wells Fargo is a lender on the Dakota Access Pipeline, a 1,172-mile-long (1,886 km) underground oil pipeline transportsystem in North Dakota. The pipeline has been controversial regarding its potential impact on the environment.[120]In February 2017, Seattle, Washington's city council unanimously voted to not renew its contract with Wells Fargo "in a move that cites the bank's role as a lender to the Dakota Access Pipeline project as well as its "creation of millions of bogus accounts." and saying the bidding process for its next banking partner will involve "social responsibility." The City Council ofDavis, California, took a similar action voting unanimously to find a new bank to handle its accounts by the end of 2017.[121]Failure to comply with document security requirements[edit]In December 2016, the Financial Industry Regulatory Authority fined Wells Fargo US$5.5 million for failing to store electronic documents in a "write once, read many" format, which makes it impossible to alter or destroy records after they are written.[122]Connections to the gun industry and NRA[edit]Wells Fargo is the top banker for US gun makers and the National Rifle Association (NRA). From December 2012 through February 2018 it reportedly helped two of the biggest firearms and ammunition companies obtain US$431.1 million in loans and bonds. It also created a US$28-million line of credit for the NRA and operates the organization's primary accounts.[123]In a March 2018 statement Wells Fargo said, "Any solutions on how to address this epidemic will be complicated. This is why our company believes the best way to make progress on these issues is through the political and legislative process. ... We plan to engage our customers that legally manufacture firearms and other stakeholders on what we can do together to promote better gun safety for our communities."[123]Wells Fargo's CEO subsequently said that the bank would provide its gun clients with feedback from employees and investors.[124]Discrimination against female workers[edit]Further information: Glass ceilingIn June 2018, about a dozen female Wells Fargo executives from the wealth management division met in Scottsdale, Arizona to discuss the minimal presence of women occupying senior roles within the company. The meeting, dubbed "the meeting of 12", represented the majority of the regional managing directors, of which 12 out of 45 are women.[125]Wells Fargo had previously been investigating reports of gender bias in the division in the months leading up to the meeting.[126]The women reported that they had been turned down for top jobs despite their qualifications, and instead the roles were occupied by men.[126]There were also complaints against company president Jay Welker, who is also the head of the Wells Fargo wealth management division, due to his sexist statements regarding female employees. The female workers claimed that he called them "girls" and said that they "should be at home taking care of their children."[126]Auto insurance[edit]On June 10, 2019, Wells Fargo settled a lawsuit for $ 385 million that was filed in 2017 concerning their customers andNational General Insurance.[127]CEO-to-worker pay ratio[edit]Pursuant to Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, publicly traded companies are required to disclose (1) the median total annual compensation of all employees other than the CEO and (2) the ratio of the CEO’s annual total compensation to that of the median employee.[128]Total 2018 compensation for Timothy J. Sloan, CEO, was $18,426,734, and total compensation for the median employee was estimated to be $65,191. The resulting pay ratio was determined to be 283:1.[129]See also[edit]San Francisco Bay Area portalCompanies portalBanks portalList of Wells Fargo directorsList of Wells Fargo presidentsWells Fargo ArenaWells Fargo Center

I will show you the REASONS TO ENGAGE INTERNATIONAL BUSINESS.1.REASONS TO ENGAGED INTERNATIONALBUSINESSAll organizations, irrespective of their size, are keen toenter in to international business. Established companies are expanding theirbusiness. Many countries encourage trade, and removal of strangulating tradebarriers. It motivates companies to aggressively multiply their targets. Thegovernments of various countries are also determined to make their economy growthrough international business that has therefore become a inevitable part oftheir economic policy. The objective behind international business can belooked at:From an individual company’s angle.From the government angle.From an individual company’s angleManaging the product life cycle:All companies haveproducts, which pass through different stages of their life cycles. After theproduct reaches the last stage of the life cycle called the declining stage inone country, it is important for the company to identify other countries wherethe whole cycle process could be encashed. For example, Enfield India reachedmaturity and declining stage in India for the 350 cc motorcycle. The companyentered Kenya, West Indies, Mauritius and other destinations where the heavyengine two-wheeler became popular. The Suzuki 800 cc vehicle reached the laststage of its life cycle in Japan and entered India in the early 1980’s, whereit is still doing good business today. HP laptops are moving all the developingcountries the moment they reached maturity in the U.S. market.Geographic expansion as a growth strategy:Even if companiesexpand their business at home, they may still look overseas for new markets andbetter prospects. For example, Arvind mills expanded their business by eithersetting up units or opening warehouses abroad. Ranbaxy’s growth is mainly attributedto geographic expansion every year to new territories. Arobindo Pharma, Ciplaand Dr. Reddys follow the same.The adventurous spirit of the younger generationTheyounger generation of business families has considerable Internationalexposure. They are willing to take risks and challenges And also createopportunities for their business. Laxmi Mittal has Emerged as the steel king ofthe world and Vijay Mallya of the UB Group took a major risk in setting upoperations in South Africa. Kumar Birla expands to Australia and Europe throughacquisitions.Corporate ambition:Every corporate inthe country has strategic plans to multiply its sales turnover. In case some ofthe ventures fail, others will offset the losses because of multi-location operations.For example, Coco Cola is still to day not earning any profit in a number ofcountries. But this will not affect the company because more than a hundredcountries are contributing to offset losses. Kellogge cannot think of profitsin India for further five years. They are ambitious to be visible and thenrevenue.Technology advantage:Some companieshave outstanding technology through which they enjoy core competency. There isa need for such technology in all countries. Biocon, Infosys, Gharda chemicalsare known for their core competency in biotechnology, IT and pesticidesrespectively and a huge demand exists throughout the world for theirtechnology. Thermax, Ion Exchange, Bharat Heavy Electricals and Larsen &Toubro have marched ahead in International business.Building a corporate imagePrior to profitsand revenue generation, many companies first build their corporate imageabroad. Once the image is built, generating revenues is a comparatively easytask. Samsung and LG built their image in India for the first three years andgeneration of revenue and profits has been considerable, as they have expandedto semi-urban and rural India as well. Today their market share and penetrationlevels have gone far ahead of other players in India.Incentives and business impactCompanies, which are involved in international business, enjoyfiscal, physical and infrastructural incentives while they setup business inthe host country. The Aditya Birla Group enjoyed such incentives in Thailandand Indonesia. All such incentives contribute to the company to enjoy multipleadvantages like economies of scale, access to import inputs, competitivepricing and aggressive promotion.Lobour advantageMany companieshave a highly productive lobour force. Their unique skills may not be availablethroughout the world. Manufacturing units in India have consistently performedwell, whether in a diamond industry, handicraft, woodwork or leather. Companiesnurture the skills of the artisans and win world markets. Knitwear, handlooms,embroidery, metal ware, carpet weaving, cashew processing and seafood call forcost-effective lobour force. India is endowed with such skills.New business opportunitiesMany companieshave entered in to business abroad, seeing unlimited opportunities. Nationalforeign trade policy emphasizes focus markets. Enormous amount of growthpotential is untapped in Latin America, Sub-Saharan Africa, CIS countries andChina.Emergence of SEZ’S, EOU’S, AEZCurrent approvals of Special economic zones, Agrizones andTechnology parks by Ministry of Commerce & Industry give new dimensions tointernational business. The companies setting up units in SEZ’s enjoyinnumerable benefits and competitiveness.From a Government AngleEarning valuable foreign exchangeForeign exchangeearning is necessary to balance the payments for imports. India imports crudeoil, defense equipments, essential raw materials and medical equipments forwhich the payments have to be made in foreign exchange. If the exports are highand imports are low it indicates a surplus balance of payment. On the otherhand if imports are high and exports are low it indicates an adverse balance ofpayment, which all economies would want to avoid. A vast majority of thenations in the world are facing adverse balance of payment.Interdependency of nationsFrom timeimmemorial, nations have depended on each other. Even during the era of Indusvalley civilization, Egypt and the Indus Valley depended on each other forvarious items. Today, India depends on the Gulf regions for crude oil and inturn the Gulf region depends on India for tea, rice etc. Developed countriesdepend on developing countries for primary goods, whereas developing countriesdepend on developed countries for value added finished products. No singlecountry is endowed with all the resources to survive on her own.Trade theories and their impactThe theories ofabsolute advantage, comparative advantage and competitive advantage, which havebeen propounded by classical economists, indicate that a few nations havecertain advantages of resources. The resources may be in the form of labour orinfrastructure or technology or even a proactive policy of the government. Suchtheories are remaining foundations till today, for international businesspractices with few changes and trends.Diplomatic relationsDiplomacy andtrade always go hand in hand. Many sovereign nations send their diplomaticrepresentatives to other countries with a motive of promoting trade besidesmaintaining cordial relations. Indian diplomats in Latin America have done aremarkable job of promoting India’s business in the 1990’s. Indian embassiesand high commissions in all the countries around the world play a catalyticrole of promoting trade and investment.Core competency of nationsMany countries areendowed with resources, which are produced at an optimum level. Such countriescan compete well anywhere in the world. Rubber products from Malaysia, knitwearfrom India, rice from Thailand and wool from Australia are a few illustrations.Competing with a focused competency in any major resource or technology givescore competency status. India’s core competency in IT is known throughout theworld.Investment for infrastructureOver the years allcountries have invested huge amounts of money on infrastructure by buildingairports, seaports, economic zones and inland container terminals. If the tradeactivities do not increase, the country cannot recover the amounts invested.Hence, the government fixes targets for every infrastructure unit and timeframe to achieve it. Economies like Mauritius, Hong Kong, Singapore, Malta andCyprus invest in trade related infrastructure in order to elevate themselves tobe foreign trade oriented economies. Infrastructure and international businessare the two eyes of a growing economy.National imageA new era hasemerged from conquering countries by sword to winning it by trade. Abusinessman gives priority to the image of the country he belongs to. We comeacross products with labels such as “made in China” and “Japan” & “made inIndia”. Businessmen from India, China and Japan bring credentials to theircountry. When L.N.Mittal operates in Indonesia or Kazakhstan or Trinidad he isperceived by the people as Indian. The stigma cannot be detached.Foreign trade policy and targetsAll developingcountries announce their trade policies. A clear road map is drafted and givento promotional bodies so that timely implementation is possible. Every tradepolicy in India, in the past had its agenda and action plans right from importcontrol order in 1947. All the trade policies had three fold objectives intheir agenda- production promotion and competitiveness.National targetsBy the year 2010,India aims to have a 2% share of the global market from the current level of1.5 %. By the year 2009-10, our trade status was expected to cross $ 500billion. The global melt down and its impact on low consumption around theworld has limited the target unachievable for India.10. WTO and international agenciesTheapex body of world trade, the WTO, a free, transparent and regulatory bodyupholds provisions related to the elimination of tariffs and non-tariffbarriers. The International Bank for Reconstruction and Development (IBRD),popularly called the World Bank extends financial assistance on a soft loanbasis in order to assist developing countries in their infrastructure andindustrial development. The International Monetary Fund (IMF) maintainscurrency stability in various countries through regulatory mechanisms. Manymore organizations like International Maritime Organization, InternationalStandard Organization, International Telecommunication Union, InternationalCivil Aviation Organization are major catalysts to promote trade betweennations. Over the past few years their role in promotion of trade, especiallyamongst developing economies is unprecedented.2.TheBusiness ModelTo extract value from aninnovation, a start-up (or any firm for that matter) needs an appropriate businessmodel. Business models convert new technology to economic value.For some start-ups, familiarbusiness models cannot be applied, so a new model must be devised. Not only isthe business model important, in some cases the innovation rests not in theproduct or service but in the business model itself.In their paper, The Role ofthe Business Model in Capturing Value from Innovation, Henry Chesbrough andRichard S. Rosenbloom present a basic framework describing the elements of abusiness model.Given the complexities ofproducts, markets, and the environment in which the firm operates, very fewindividuals, if any, fully understand the organization's tasks in theirentirety. The technical experts know their domain and the business experts knowtheirs.Role of the Business ModelA business model draws on amultitude of business subjects, including economics, entrepreneurship, finance,marketing, operations, and strategy. The business model itself is an importantdeterminant of the profits to be made from an innovation. A mediocre innovationwith a great business model may be more profitable than a great innovation witha mediocre business model.In their research, Chesbroughand Rosenbloom searched literature from both the academic and the businesspress and identified some common themes. They list the following six componentsof the business model:1.Value proposition - a description the customerproblem, the product that addresses the problem, and the value of the productfrom the customer's perspective.2.Market segment - the group of customers totarget, recognizing that different market segments have different needs.Sometimes the potential of an innovation is unlocked only when a differentmarket segment is targeted.3.Value chain structure - the firm's position andactivities in the valuechain and how the firm will capture part of the value that it creates inthe chain.4.Revenue generation and margins - how revenue isgenerated (sales, leasing, subscription, support, etc.), the cost structure,and target profit margins.5.Position in value network - identification ofcompetitors, complementors, and any network effects that can be utilized todeliver more value to the customer.6.Competitive strategy - how the company willattempt to develop a sustainable competitiveadvantage, for example, by means of a cost, differentiation, or nichestrategy.BusinessModel vs. StrategyChesbrough and Rosenbloomcontrast the concept of the business model to that of strategy, identifying thefollowing three differences:1.Creating value vs. capturing value - thebusiness model focus is on value creation. While the business model alsoaddresses how that value will be captured by the firm, strategy goes further byfocusing on building a sustainable competitive advantage.2.Business value vs. shareholder value - thebusiness model is an architecture for converting innovation to economic valuefor the business. However, the business model does not focus on delivering thatbusiness value to the shareholder. For example, financing methods are notconsidered by the business model but nonetheless impact shareholder value.3.Assumed knowledge levels - the business modelassumes a limited environmental knowledge, whereas strategy depends on a morecomplex analysis that requires more certainty in the knowledge of theenvironment.BusinessModel for the Xerox CopierChesbrough and Rosenbloomillustrate the importance of the business model with a case study of XeroxCorporation's early days in the copy machine business with its Xerox Model 914copier. (Before changing its name to Xerox Corporation, the company was knownas the Haloid Company and then Haloid Xerox Inc.)The Model 914 used therelatively new electrophotography process, which is a dry process that avoidsthe use of wet chemicals. In seeking potential marketing partners, Haloidrepeatedly was turned down by the likes of Kodak, GE, and IBM, who had concludedthat there was no future in the technology as seen through the lens of thethen-prevalent business model. While the technology was superior to earliercopy methods, the cost of the machine was six to seven times more expensivethan alternative technologies. The model of selling the equipment below costand making up the difference by large margins in the sale of supplies was notviable because the cost of the supplies was about the same as that of thealternatives, so there was little room to maneuver.Xerox then decided to market thenew product itself and developed a new business model to do so. The new modelleased the equipment to the customer at a relatively low cost and then chargeda per copy fee for copies in excess of 2000 copies per month. At that time, theaverage business copier produced an average of only 15-20 copies per day. Forthis model to be profitable to Xerox, the use of copies would have to increasesubstantially.Fortunately for Xerox, thequality and convenience of the new copy technology proved itself and companiesbegan to make thousands of copies per day. As a result, Xerox sustained acompound annual growth rate of 41% over a 12 year period. Without this businessmodel, Xerox might not have been successful in commercializing the innovation.The Entrepreneurial AdvantageChesbrough and Rosenbloomobserve that a successful business model such as that of Xerox tends to buildmomentum and the company becomes confined to its successful model. However, newtechnologies often require new business models.Because start-up companies arefree to choose or develop a new business model, in this regard start-ups havean advantage over more established firms. In addition to the risk incurred inthe technological and the economic domains, an unproven business model addsadditional risk, and entrepreneurial ventures usually are more prepared toaccept this risk than would be a large, well-entrenched firm.In fact, many venturecapitalists see themselves as investing in a business model. Consequently, itoften is the VC that pushes for a change in the business model when it becomesapparent that the original model is not working.3.Factors led o expansion of International Businessinthe last 20 yearsThemajor factors influencing the direction of international business;ECONOMIC ENVIRONMENT:Theeconomic environment can be classified into three categories:Economy in the home countryEconomy in the host countryEconomy at a global level.SOCIAL ENVIRONMENTThe social environmentencompassing religious aspects, language, customs, traditions and beliefs,influences buying consumption habits. Many companies face failure in foreigncountries, due to their inability to understand the socio cultural environment.POLITICAL ENVIRONMENT.Thepolitical environment in international business operates in differentdimensions:The home country political environment;The host country political environment, andThe global political environment.CULTURAL ENVIRONMENTThe cultural environment forinternational business refers to the set of factors which shape the materialand psychological development of a nation and represents the primary influenceon individual lifestyle, attitude, pre-deposition and behavior as consumers inthe market.5. TECHNOLOGY ENVIRONMENTTechnologyand its applications are key factors in determining the internationalcompetitiveness of a firm in conducting international business.LEGAL ENVIRONMENT :Thisrelates to the laws and regulations governing the conduct of businessactivities in the country. Before entering any country, firms avail of theservices of local legal firms to understand business interpretations pertainingto labor legislations, taxes, environment, pollution, investment, distribution,contracts, logistics etc.COMPETITIVE ENVIRONMENT:Competitionis a threat imposed by an environment, which may effect or hamper or challengethe operation of an international business firm. Competition either could befrom the firm’s home country or host country or third country. Some timesproduct related competition may crop up through substitutes or low costproduction process or technology or cost reduction through economies ofscale.4.10major international companies doing business in India.List of foreign companies:Aegis BPO: Aegis BPO is an Essar group company and has Headquartered in Irving, Texas, it employs over 9000 people (between India & USA) and has over 24 delivery centers. The company provides services across verticals like Retail, Energy, Education, Telecom and Financial Services.WNS Global Services: Starting as a call center for British Airways in 1996 in Mumbai,Bayer: The Bayer Group was set up as“Farbenfabriken Bayer and Co. Ltd.” in Mumbai in 1896 and was the first wholly-owned subsidiary in Asia.The Bosch: The Bosch Group is a leading global manufacturer of automotive and industrial technology, consumer goods and building technology in india.Pfizer: Pfizer in India has three business divisions:*PharmaceuticalDivision: This division markets both prescription and OTC products. *AnimalHealth Division: This division caters to animal pharmaceuticals and is amongstthe top four players in the Indian market with revenues of US$ 12million.Research and *Development Division: This division includes Pfizer’sclinical research operations as well as the biometrics division.6) PizzaHut: Pizza Hut entered India in 1996, and opened its first restaurant inBangalore. Since then it has captured a dominant and significant share of thepizza market and has maintained an impressive growth rate of over 40 per centper annum7.FederalExpress: Federal Express startedoperations in India in 1997, and currently operates ten flights a week fromMumbai to Europe and Asia.Franklin Templeton : Franklin Templeton set up office in India in 1996 and has been one of the fastest-growing companies in the country ever since.McDonald’s: McDonald’s Corporation, established in 1955,and McDonald’s entered India in 1996 through joint ventures with two Indian entities, Hardcastle Restaurants Pvt. Ltd. and Connaught Plaza Restaurants Pvt. Ltd. Hardcastle Restaurants Pvt. Ltd. owns and operates McDonald’s restaurants in western India through a 50-50 joint venture with the parent company.Microsoft: Microsoft Corporation India Private Limited is a subsidiary of Microsoft Corporation USA, and has had a presence in India since 1990. Microsoft India has two major channels of distribution: channels and original equipment manufacturers (OEMs).REASONSFOR GOING INTERNATIONALBy OluwaseunP. AdeolaAs the businessenvironment became more turbulent, sophisticated and competition grew stiffer,businesses needed to be more proactive, creative and more open to the realitiesof the global trend of occurrences. The motive behind every success mindedcompany is to cut cost as low as possible and maximize profit in all of ittransactions and operations. Therefore, to achieve business objectives,maintain cardinal values of the company and equally deliver values forcustomers’ money, it then behooves on the company to plan strategically how itwould cope with the many business challenges in ensuring that it wins asignificant share of the target market. Going international is an effective wayof staying afloat of the ‘business waters’.International businesshas been defined in various ways and by different authors. The online businessdictionary defined it as ´The economic system of exchanging goods and services,conducted between individuals and businesses in multiple countries. Doole&Lowe (2001, 31) also defined it as ´the performance of business activitiesthat direct flow of a company´s goods and services to consumers and users inmore than one nation for a profit’. Going by the definitions of internationalmarketing, this simply means the process of taking goods and services to peopleoutside the location of the company that produced it. One can however concludethat for the purpose of achieving business goals in the implementation ofmarketing mix, two levels are involved. At its simplest level, internationalmarketing involves the firm in making one or more marketing mix decisionsacross national boundaries. At its most complex level, it involves the firm inestablishing manufacturing facilities overseas and coordinating marketingstrategies across the globe.Prof. Duncan, a USAbased lecturer in his lecture delivered to the students of Internationalbusiness student at the Savonia University of Applied Sciences Kuopio, Finland(Feb.2009) stated clearly some of the important factors that are responsiblefor companies and businesses going international. The factors are as follows:1.To build brand image2.Sales growth3.Access to scarce resources4.Leverage core competences5.Respond to competition6.Too small home market7.External initiatives to spread the product8.To diversify sources of sales and supplyFurthermore, the Indianastate University, USA (online source.15.03.09) grouped the reasons forcompanies embarking on international trade into two broad categories; Proactiveand reactive reasons.PROACTIVE REASONS:·Economics of scales·International markets·Resources access and cost savings.REACTIVE REASONS·International competition·Regulations and restrictions·Customer demandsPonsse oyj, (Finnishcompany) the market leader in the forest machine industry could not haveachieved such a great success by limiting its dealings within the shore ofFinland. The ponsse company did well by acting proactively to extend thecompany’s marketing strategy to concern the target markets and this theyachieved by going international.Collected