Western Union

western sandwich matrimony was founded in 1851 and started its history as a telegraph and wire serve hales company. In 2006, horse opera marriage ceremony dis sojournd its telegraph service and cerebrateed exclusively on coin transfers (Pearce & Robinson, 2011). Jorge Ochoa, Vice President of Finance and Raul Duany, Director of bodied Communication coupled The western coalescency Company (WU) in November 2008. The radical customers for specie transfers were immigrants that were seek catch opportunities in richer countries away from their folk.When immigrants digress their home countries, they often leave behind family members who depend on them for pecuniary support. This is most true in the case of poorer countries. Government regulators scrutinized the operations and fee-charging practices of bills transfer concernes. westbound wedding is a leader in worldwide bullion transfer, providing people with fast, authorized and convenient ways to commove money aro und the solid ground. The western sandwich jointure brand is orbicularly acknowledge.Their run argon available by dint of a network of over 375,000 agent locations in more than 200 countries and territories (Western, 2009). Their consumer-to-consumer money transfer service enables people to send money around the world in minutes. Their consumer-to- descent service provides consumers with flexible and convenient options for making one-time or go on bill payments. Western fraternity believes that the brand strength, size, and reach of their global network, on with the convenience and reliability to their consumers require been essential in the increment of the agate business organization.As they come to to meet the needs of their consumers for fast, reliable, and convenient money transfer services, they be besides working to enhance their services and provide their consumers with access to an expanding portfolio of payment and other fiscal services. The federal law kn own as the Community Reinvestment funds trans performance (CRA) obligates federally insured banks and depository institutions to help meet the needs of communities in which they operate (Pearce, & Robinson, 2011). In March 2007, Federal Reserve chairman Ben Bernanke stated, the CRA reaffirmed the long-standing formula that financial institutions must serve the convenience and needs of the communities in which they be charted (Pearce & Robinson, 2011). Western mating serves many of the financial needs of immigrant states, as a bank might, with a major presence in poor and racially various neighborhoods. Western Federal is now being held up to the a analogous standards as banks beca lend oneself they be both financial institutions. Western Unions customers be mostly urban and poor.The typical user of its remittance service is a low-wage immigrant worker who lives in Urban America, bugger offs $15,600 annually and sends home $293 a month, almost 30% of his or her net monthly income (Pearce & Robinson, 2011). Heavy charges in the money transfer industry places economic burden on low-income immigrant families in the United States and in their communities of origin while creating and increased reputation encounter for Western Union (Pearce & Robinson, 2011). Western Union has been facing numerous lawsuits, chiefly because of their lack of social responsibility.This has affected the companys image and could potentially increase the risk that Western Union faces in the competitive food market. Corporate Social Responsibility Corporate social responsibility is generally perceived as a overconfident business ideology in the twenty-first century, despite some challenges. A significant expansion of basic business ethics, CSR establishes guidelines for ethical and socially obligated behavior. It addresses how companies that want to satisfy government and societal requirements should treat key stakeholder groups, including customers, suppliers, employees and the community (Mal Warwick Associates, 2008).Pros ane of the elements of CSR is that it causes companies such as Western Union to reason beyond basic ethics to contemplate the benefits of spry involvement in communities. In the article The 7 Principles of Business rightfulness, business strategist Robert Moment argues that 21st-century companies must prove themselves to customers to build long-term relationships (Moment, 2004). Western Union involves itself in the community by giving back. Insinuates Western Union to the local markets in which they operate.Cons The main reason any company would intent to participating in CSR is the associated costs. With CSR, companies set about to pay for environmental programs, more employee fostering and efficient waste management programs. Proponents of CSR agree that any expenses to businesses are finally covered by stronger relationships with key customers. However, David Vogel indicates in his Forbes article CSR Doesnt Pay that inves tment in CSR programs may not necessary result in mensural financial results (Vogel, 2008).* Corporate Citizenship. Western Unions global incorporated citizenship is their commitment to enrich the lives of global citizens by expanding economic opportunity. Through initiatives like the Western Union Our World, Our Family program, they are able to put their values into action (Western Union, 2011). Western Union corporate citizenship efforts tenseness on three primary areas 1. Supporting Cultural Inclusion Western Union recognizes the importance of component part individuals and families build strong communities, in which all members can contribute their characteristic talents and feel at home. . Creating Pathways to Opportunity Western Union help diverse individuals and communities around the world realize their tremendous potential with scholarships supporting financial literacy, entrepreneurship, job training, and other skills necessary on the journey to a better life. 3. Fost ering Hope in the Developing World Western Union support economic development and opportunities with infrastructure development, community centers and access to applied science (Western Union, 2011).Western Unions received Strategy. Currently, Western Union is exploitation the uninvolved specie flow that is generated to repurchase stock and acquire rival money transfer firms in order to expand. Along with the repurchasing of stocks and acquisitions, WU has donated millions of dollars to charitable organizations and other countries. Their online dodging is concentric diversification because they are acquiring firms that are associate to them in terms of products and markets. They accept pursued harvest-time of their brand through inter subject area expansion and the growth in the worldwide immigration population was also driving growth in the money transfer business.Although at that place is a higher risk associated with diversification, according to Pearce & Robinson (201 1), the distinctive competencies of the diversifying firm are likely to facilitate a smooth expansion. Globalization in that respect are about seven factors that make global strategic planning complex. These factors are economic factors, political factors, geographical factors, labor factors, tax factors, capital rootage factors, and business factors (Pearce and Robinson, 2011). When you learn at the economic factors of a country, you need to look at the GNP for the country, and the foreign exchange rate.You also need to consider the size of the market and the markets potential rate of growth. As far as the political factors are concerned, you have to determine whether the country is stable, as well as, the type of political structure in the country. It is also important to project how foreign business is perceived in the country by the government, consumers and competitors. The geographic factors that you should be concerned with is the availability of raw materials, utilities , and the proximity to export markets.Other globalisation challenges you need to be aware of are the labor factors whether you allow for have the necessary skills available in the people in the country, tax factors whether thither are any tax breaks for foreign investors or if there is a huge tax rate for the country, capital source factors banking systems available in the country, and business factors current industry information for competitors and competitive situation. Diversification There are also challenges inherent to diversification.Companies often decide to diversify so that they can acquire a new company that will potentially balance the strengths and weaknesses of the two businesses (Pearce and Robinson, 2011). Companies use diversification as a honey oil strategy in order to increase stock value, increase growth rate, better use of investment funds, improve stability of the company, acquire call for resources quickly, and tax savings, and increase efficiency and profitability.Trends in the Financial Services Industry. Current trends in the financial services industry is the use of a tenseness strategy. Focus strategy, involves concentrating on a particular customer, product line, geographical area, channel of distribution, stage in the production process, or market niche. The underlying exposit of the focalize strategy is that the firm is better able to serve its extra segment than competitors serving a broader range of customers. Firms using a focus strategy simply apply a cost-leader or preeminence strategy to a segment of the larger market.Firms may be able to strike off themselves based on meeting customer needs through differentiation or through low costs and competitive pricing for effectiveness goods. This strategy is often appropriate for small, aggressive businesses that do not have the ability or resources to engage in a nation-wide marketing effort. much(prenominal) a strategy may also be appropriate if the bum market is too small to support a large-scale operation. umteen firms start small and expand into a national organization. The trend in the financial services industry is that consumers are working outside of their home countries.Many of these consumers have families back in their home country that they periodically send money to in order to help them pay their bills. Western Union has a niche with this trend because they provide a means of slow getting the money to their family without having to have a checking account or if they have credit problems and owes the money elsewhere. Western Union guarantees that the money will be secure and delivered to the correct person. Internal Environment Financial Information In 2008, Western Unions market share grew and delivered record levels of tax revenue and cash flow.Revenue was $5. 3 billion $1. 25 billion was generated in cash flow from operations and WU handled $67 billion in cross-border consumer-to-consumer remittances. They also delivere d an direct income margin of 26% for the year. Western Union and its consumers are feeling the bear on of the global economic recession. They have confidence in their strategy. Their plan is to focus on what they can control and influence. They have a brand that is recognized around the world. Their business generates significant cash flow.They have created a business model that consistently delivers strong margins. They have built a distribution channel that is second to none and their global team is focused on a short list of priorities to drive growth. They provide vital services to consumers in more than 200 countries and territories. These services not only make a tremendous difference in the individual lives of their customers, but the record of remittances sent through Western Union helps drive many national economies, paving the way for long-term growth.They also have the advantage of a globally recognized brand and unmatched worldwide distribution. Western Union plans to continue investing in their brand even in these lout times. Their brand represents speed, trust and reliability to their consumers worldwide. WU has launched a comprehensive new global brand initiative that embodies an ambitious and forward-looking mint for the company. Their vision is of optimism for their customers, company, agents and, employees. This vision shows their commitment to help people who are on the move, pursuing their dreams.At a time when there is so much pessimism in the world, it is believed that this Western Union message will serve as a source of positive energy in the marketplace, which should ultimately translate into mind share and market share for the company. They will increase their technology spend to further develop tools that allow them to perform deeper analysis on their customers. Western Union is sharpening their focus and directing investments to meet market share opportunities. They have demonstrated that their global team working together has h elped them gain market share in 2008.These employees were using Western Unions four key strategiesstrategies that will continue to drive their business forward * Accelerate profitable growth in the global cash money transfer business * fly off the handle and globalize the consumer-to-business payments business * Innovate new products and services for target customers * mitigate profitability by leveraging scale, reducing costs and effectively using capital During 2009, Western Union will increase investment in technology and systems.They want to update their systems in order to move handed-down and new services from virtually anywhere in the world, with exceptional speed. Western Union has a proven business model with significant financial strength. Alternatives and Recommendations Strategic Alternatives In order to publicize their commitments to social responsibility, Western Union should consistently re-evaluate their operations and look for areas of improvement. They can also look at what other companies in the industry are doing to be socially responsible and implement such procedures to their company.Because of the challenges inherent in globalization and diversification, it is important for Western Union to perform due diligence when entering foreign markets. One of the challenges when globalizing may be the exchange rate in different countries. Western Union may have to charge different fees depending on where they are and who their competition is. Recommended Strategy We believe that the company should stick with what they know and continue to repurchase shares and acquisitions. Repurchasing shares can generate a higher EPS and help use up excess cash.It can also increase the ROE and pass on demand for the stock on the open market. Their current strategy seems to be working for them and as long as they continue to re-evaluate their operations and persevere socially responsible, their strategy will be a success. The bottom line is that Western Unio n wants to pursue mergers in order to make money for the company and for shareholders.ReferencePearce, J. A, & Robinson, B. R. (2011). Strategic Management- Formulation, Implementation, and Control. (12ed) New York, NY McGraw-Hill/Irwin. Mal Warwick Associates, Initials. (2008). The Five Dimensions of CSR. Retrieved from http//www. malwarwick. com/ Moment, R. (2004). The 7 Principles of Business Integrity . Retrieved from http//www. webpronews. com/the-principles-of-business-integrity-2004-07 Vogel, D. (2008). CSR Doesnt Pay. Retrieved from http//www. forbes. com/2008/10/16/csr-doesnt-pay-lead-corprespons08-cx_dv_1016vogel. html Western Union. (2011). Corporate Citizenship. Retrieved from http//corporate. westernunion. com/corporate_responsibility. html