Bank of America Corporation - Research Paper Example

Bank of America Corporation Table of Contents Introduction……………………………………………………………….……………………..3 External analysis …………………………..…………………………………………………….3 Internal Analysis ……………………………………………..………………………………….4 Challenges………………………………………………….…………………………………….5 Literature Review…………………………………………………………….…………………..6 Analysis and evaluation…………………………………………………………………………..7 Conclusions ………………………………………………………………………………………7 Recommendations ………………………………………………………………………………..8 References ………………………………………………………………………………………..9 Appendix ………………………………………………………………………...........................10 Introduction The study aims at analysis of Bank of America Corporation as one of the member corporate companies in the US. It is featuring in the list of top fortune 500. Formed in 1922, the bank mostly operates under the mission and vision of maintaining the employees’ welfare through training and offering the necessary resources to work and give the best of service to the clients. The banking sector has undergone a lot of dynamism in relation to technology and their roles in offering their products without which it is impossible to remain relevant in the market. One of the banking institutions that have made a stride in the global banking sector is the Bank of America Corporation. One reason why it is important to analyze Bank of America Corporation as a profitable banking sector is its large market share and the amazing offers it provides to its customers in all its branches that puts it as the world’s biggest and wealthiest corporate company, as reported by Giannone (2009). If only the bank can reach out to the opportunities that exist by accommodating even the low-income earners, no doubt it can become the largest banking and financial service centre in the word. It has continued to offer banking and financial services to its clientele in US. External Analysis The bank boasts of featuring as 13th largest corporate company, according to the CNN fortune 500 company ranking. It has a primary listing base in the United States. It has its headquarters in Charlotte, North Carolina, and enjoys a large market in the banking industry. This shows that the institution has a potential of expanding beyond measure if it decides to be tactical in its operation. Although it has the ability to compete favorably with other banking and financial institutions, it has to up its game since its rival banking institutions are also offering almost the same products. One thing it should do is to conduct a thorough feasibility study on some of the new range of products not yet tapped by other competitors. By the time competitors become aware of the existence of that particular product, the bank shall have identified another new product all together. This is the actual utilization of the strengths of an organization to outdo other organizations through taking advantage of their weaknesses. According to a recent Annual Report by Moynihan (2011), the bank features as the second largest in the US by assets having its branches in 50 states in the US and about 40 branches in the world. The external analysis purely indicates that the bank operates where there is stiff competition almost in all its branches and therefore any mistake made by the bank results into insurmountable losses. There is also the challenge of government policies and the taxation rates that has been high for most banking institutions all over the world. The trick is to know how to operate in the harsh economic times through proper utilization and management of the existing opportunities. Internal Analysis Operating in the most competitive part of the industry, the Bank of America Corporate is one of the most profitable banking institutions and is termed as one of the largest banking establishment. It has managed to secure strong ground for capturing large and small markets by employing sophisticated business techniques and measures necessary to see any business thrive. It has also done SWOT analysis to ensure that its services are among the best. The strengths of the bank, just like in any other business, simply refer to those factors inside the business that the business has control over. It includes the number of personnel in the business, the bank’s equity, technological input among others. The bank should also utilize the opportunities available for expansion. Such opportunities include making use of the existing resources in order to increase the level of its productivity. It also involves trying to do a market research on those types of products that are likely capable of satisfying clienteles. All these can be used to the advantage of any firm no matter the kind of threats the firm may face. Threats that are likely to interfere with the operations of the bank include the government policies like high taxes, strikes, loss in equity and most probably high inflation rates. The firm therefore should prepare for any eventualities in case of such occurrences. Challenges According to Sylvers (2011), the bank has had to bear with many challenges, among them being the Parmalat controversy. Parmalat is an Italian company, which went through tough economic times rendering it bankrupt. Following that ruling, the diary and food company accused the Bank of America Corporation of its entire financial problem, a penalty that the bank had to pay dearly. The bank has also been widely criticized for its continuous raising of rates for customers without informing them. For instance, in 2009 Ann Minch (one of the customers) accused the bank of raising her interest rate without her knowledge; she went round posting video clips on social media to criticize the bank. The bank had to quench everything by lowering her interest. The bank has also witnessed a recent decline in revenue as business segments have persistently continued to decline, as reported by Rothacker (2013). This has raised a lot of tension with the bank managers trying to solve such problems. Literature Review Decision making methods in any company has a direct result in the output. In the same way, banks have an obligation of coming up with methods necessary for steering its growth through performing a number of tasks like getting direct feedback from clients. That is why every department is assigned duty and they are responsible of ensuring that such duties are performed wholeheartedly since at the end of the day the customer must get fully satisfied. Consequently, if the kind of services offered frustrates customers no doubt this is likely to be reflected in the output. In order for it to survive in the banking arena for decades, the bank has offered unlimited opportunities for consumer-based products. Such services it offers are numerous and include mortgage services to punters who may be in need of securing money to purchase homes. The Bank of America Corporation is one of the banking institutions in America that offers mortgage services to consumers at affordable rates. This has ensured a steady rise in mortgage consumer index which has enhanced a brighter future for the bank should it decide to reach out to the majority of consumers who are desperately yearning to buy new homes. These are just but a few examples of the full range of services offered by the bank. It has now extended its leaf to offering services like overdraft to credible clients in order to sustain them. Other banking services it offers are retail banking and private banking among others. It also offers private banking services to potential individuals with high net worth; hence create trust between the bank and the consumers. Retail banking however forms the strength of the bank since under this type of service, majority of customers are incorporated. Majority of the customers who operate this type of service are largely small business owners and individuals who are high, middle or low-income earners. Analysis and Evaluation Retail banking service is one area where the bank should dwell on in order to increase its shares and the capital base. This is one area where most banking and financial institutions have not fully exploited. The bank can employ various measures in order to increase the customer base. Some of these measures include segmenting their loan services to accommodate their low-income earners. This will attract more loan consumers who will freely choose the amount of loan they are capable of repaying. Another way of ensuring their profitability by market coverage is through minimizing the number of collaterals required to secure a loan. Although this is one way of getting and maintaining high loan portfolio, deterrent measures should be in place in order to secure the loan. Encouraging Agent and M-banking services is also an area which although has been exploited by some banks, still need intensive and extensive market research. This does not only serve to help the bank but is also of benefit to clienteles who may otherwise be having money but cannot easily get access to the bank because either the bank is quite far from where they are, or they simply don’t have time to deposit their money in the bank. Conclusions The increasing demand for saving and acquiring loan services is vital, as it is one way through which banks get their revenue to maintain their operation. There is therefore an increasing demand for banks to create some awareness on services offered and to get direct feedback from the customers who have benefitted from their products or those that would otherwise wish to make some enquiries about services available. Banking institutions should use the increasing social media marketing to target various categories of consumers. This will help in gauging their level of satisfaction and put the bank on checkpoint. The bank’s ability to expand its branches abroad is an indication of its focus towards growth and imparting positively on low income earners; through changing and sustaining their lives. Its role in changing the economic capacity of customers in the global market cannot be underestimated. Recommendations In marketing, it is important that the feelings of customers are equally not hurt but taken seriously. That is why increasing and effective use of customer care services must continue to be encouraged not only by the Bank of America Corporation but also by other banking institutions. This is because marketing performance excellence largely depends on the basic recognition of the needs of customers that may be connected to their emotions. It therefore creates a rapport between the consumer and the bank. In addition, looking into ways of satisfying them through product development strategies and marketing strategies should be put in place with regard to strategies in social media marketing that may target potential consumers and may be successful in achieving sales increment through online platforms. Through use of road shows, flashy and distractive optimized words that lure potential customers into trying out new product offered by the bank to customers, the institution is likely to have a positive response from clients. References Giannone, J. (2009). U.S. pushed Bank of America to complete Merrill buy: Report. Retrieved from http://uk.reuters.com/article/2009/02/05/us-bankamerica-treasury-idUKTRE5140OA20090205 Moynihan, B. (2011). Bank of America: 2010 Annual Report. Retrieved from http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-reportsannual#fbid=OTdTJpuI8JB Rothacker, R. (2013). Analysis: Bank Of America Seeks To Boost Revenue, But Progress Slow. Retrieved from http://www.reuters.com/article/2013/04/18/us-bankofamerica-revenue-idUSBRE93H05720130418 Sylvers, E. (2011). Judge Clears Banks in Parmalat Case. Retrieved from http://dealbook.nytimes.com/2011/04/18/judge-clears-banks-in-parmalat-case/ Appendix Strengths Large share capital Highly trained personnel Weaknesses Poor management by top managers Difficulty in penetrating through the market Opportunities Technological advancement Wide market coverage Threats Competition Government policy Read More