Example Of Case Study On Senior Project- Case Study: Bank Of America
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Mission and vision evaluation 3
Vision statement 4
Strategic analysis 4
External assessment of Bank of America 5
External factor Evaluation 8
Internal assessment of bank of America 13
Swot analysis of bank of America 14
In the business world, whether service oriented or product oriented, strategic management is pivotal to sustaining a competitive edge. Accordingly, businesses succeed through a clear and profound look into the three core aspects of strategic management is significant. Continuously, the three core aspects of strategic management are strategic analysis, strategy formulation and strategy implementation. Thus, as a business of focus in my strategic management paper, bank of America has maintained a strong footing in both the local and global banking sector.
Mission and vision evaluation
Business operations require the inculcation of proper vision and mission statement for the employees to operate within the operational statements. Thus, from analysis of bank of America, a clear vision and mission evaluation is as follows:
The organizational mission is: “to offer lending and investment packages that serve both low and moderate income individuals and families. Additionally, to ensure and improve the underserved low and moderate income communities coupled with creating a sustainable practices for the long haul (Ackoff 2009). As such, through the focus on the clients, the organization aims towards:
Generating tailor integrated financial solutions that focus on meeting the unique needs of the clients and ensure unmatched service delivery within the industry
Investing in the resources, tools and training that are necessary for successful outcomes for both the associates and the customers
Maximisation of shareholder value through making sound decision making.
The vision at bank of America is to ensure that it is a one team organization that is committed to the generation of success for the clients within a mutually beneficial mandate.
Milestones denote the diverse operational steps or achievements that have been made. Thus, from the examination of bank of America, the diverse milestones that have been made include:
The company maintains a 5th position in fortune 500 as per 2010
Bank of amerce has a heightened reach within US. Through investment into a formidable infrastructure and locations, the bank has managed to ensure accessibility to their services for 80% of individuals within US.
The organisation has been investing into proper diversification of their service packages. The investment into research and development has enabled the organisation to generate distinctive packages thus the evident over 50% clientele as per 2010.
As at 2009, the organisation had $419.6 billion in customer deposits and over 20 million online subscribers to their services. The internet banking approach has enabled the organisation to capture an extensive market niche within the sector.
Strategic analysis as per Barney (2009), is a term used to denote the clear research into the external and internal environment in which the business stakes its operational base. Through understanding of the environment of business operations, formulation of strategy ensues.as such, for the success venture in any business, the use of strategic analysis tools is of importance in order for the clear comprehension of the internal and external environment. In reference to Johnson & Scholes (2011), the environment of any organization can be seen as a series of layers. Moreover, the general layer is referred to as Macro environment. Macro-environment is consistent of the broader environmental factors that hugely impact the organization. Within the broad general environment is the next dimension or layer which is industry or sector. Accordingly, it consists of the organizations which produce similar products and services. Intertwined to the industry is the different organizations that produce competing products and services using different marketing and branding strategies. Hence, a view of the environment at Bank of America through the inculcation of the diverse tools is as follows:
External assessment of Bank of America
The external assessment of the business environment is dependent on the evident situational analysis tools. Thus, from the above evaluation of strategic analysis, the inculcation of a PESTLE, effective external factors and Porter five forces analysis is imperative towards comprehension of the organizational external environment. PESTLE analysis is a prudent tool that can be used when scanning the external environment in which the business operates. Moreover, PESTLE is an acronym that denotes the following factors, Political, Economic, Social and technological. The aforesaid factors play an immeasurable role in the creation of opportunities of the company strategy. Nevertheless, the factors are usually outside the regulation of the company and need to be considered as either threats or opportunities to the company. As a business that operates in the cutthroat banking sector, the diverse environmental aspects that impact on the operational mandate of Bank of America include:
The banking industry is bombarded with various laws and regulations that govern their operations. The laws stem from the industry specific laws that cover the banking products and services delivered and the general competition. Inculcation of transparency in financial reporting through annual publication of financial statements are some of the regulations that have been focused on ensuring that effective operations among the stakeholders within the banking sector prevail. Additionally, consumer protection laws and anti-trust laws, that focuses on ensuring that monopolistic practices do not proceed within the US banking sector. Correspondingly, the regulation is focused on the improvement of the functioning in a sole market and the guarantee of user interests. On the basis of consumer protection, the US, through the SEC has taken a more in-depth role towards ensuring that consumers are protected against malpractices among the banking sector practitioners (Ackoff 2009). Taking heed of interest rates meted onto the customers is a plausible initiative that has been focused on ensuring proper operations within the banking sector. Additionally, the political stability of the areas in operation is of huge influence to the productivity of Bank of America and other companies.
For any banking company, knowledge pertaining to the GDP, inflation rates, and economic stability and tax rates imposed form a bed rock to the economic factors. As such, GDP analysis is a common yet crucial tool in analyzing the economic activity of the proposed area of operation. GDP indicates the production degree of the resident producers which is calculated through summing up the gross value added from the overall activities/ the industries in the economy. Hence, through comprehension of the GDP, a business is able to project the economic stability of the nation of operation. Thus, from the analysis of US, majority of the financial institutions are still grappling with the effects of the 2008 recession. A huge emphasis on the evaluation of the GDP of US has become an imperative aspect. Despite the gradual growth in GDP in US, bank of America acknowledges that plausible outcomes in the operational mandate are bound to prevail.
Across the world, nations are grappling with the unprecedented changes in demography. Accordingly, the changes in demography have a huge impact on the various aspects of the society. Social systems, consumption behaviors, education and the job markets, are some of the aspects that are of concern to the various businesses. As such, through understanding of the demographic issues, Bank of America and other businesses are able to comprehend the age factors and other issues that greatly impact the banking industry. Within US, there has been an evident increase in the population especially from immigrants. A 10% increase in population has become a plausible aspect within the social mandate. The increase in population within the domestic market is bound to catapult the evident profitability within the organization. On the other hand, the concept of money laundering has become an aspect of concern in the banking sector. Admittedly, individuals laundering their money into other countries have become an aspect of concern that the government has been investing into diverse approaches towards mitigating the evident vice.
Bank of America and other players in the banking industry need require constant research and development to sustain their footing. As a factor, R&D results into innovation, economic growth and launching of new services that increase quality in terms of service delivery (Johnson & Scholes 2011). Across the world, investment into R&D has been on the upward trend. Most specifically, in the US, 3% of the GDP comprised of R&D. thus, as a factor of analysis, R&D is shaping various industries and requires utmost investment to ensure sustainability and innovation.
Additionally, the concept of low carbon technology has been taking hold within the US market. Accordingly, the notion of investment into low carbon infrastructure has become the most plausible approach towards sustenance of effective and sustainable operations. The inculcation of plausible infrastructure is bound to catapult the sustainability approach.
Increase in governmental regulation in US has become highly evident. The government has been making significant changes within the financial environment through requirement of higher capital requirements. An inculcation of anti-money laundering regulations has led to Bank of America dealing with the legal compliance that is highly costly and time consuming.
Bank of America acknowledges the ever changing dynamics in regards to climate change. The government has been calling for organization to make an extensive reduction in the carbon foot print. Inculcation of the carbon tax and so forth has become an aspect of concern that has led to banks within US to incorporate the sustainability report.
External factor Evaluation
Through the above in-depth analysis of the PESTLE environment of the banking industry, the inculcation of the external factor evaluation enables companies to inculcate strategies towards evaluation of the political, economic, social, technological, legal and environmental factors. Thus, a clear analysis of the industry through the inculcation of the EFE matrix is as follows:
Thus, from the evaluation of the above total of 1.68, it is evident that the diverse organizations within the sector have incorporated the right approaches towards mitigating the evident threats. Furthermore, the organizations have incorporated the right approaches towards sustenance of effective performance and mitigation of the threats evident within the external environment.
Porter five forces analysis of the banking industry
The external environment requires an in-depth analysis to ensure proper strategy formulation and development. The Porter Five Forces analysis is integral in the evaluation of various aspects of the banking business environment. The various environmental aspects are analyzed as follows:
The evident competition among organizations within the financial industry is high. Most specifically, within the banking sector, there prevails extensive competition. As such, the various rivals within the sector have slight disparity in regards to their financial products and compete within a mass market niche that caters to numerous consumer segments. As such, all the companies that operate within the bank sector have to highly distinguish their products and spot the novel trends first to ensure relevancy. Thus, among the key competitors include JP Morgan, Wells Fargo and HSBC that exude similarity in the financial packages As such, maintenance of an effective market share is highly daunting for any organization. The most plausible approach towards ensuring operational effectiveness within the sector is high investment into branding (Bradley 2011). The evident banking institutions within the industry have been constantly investing into branding. Banding is incredibly significant within the industry due to the evident consumer preference to the brands that they are aware and make repeated purchase. Hence, within the extensively competitive sector, it is imperative that bank of America continues investing into branding for sustenance of rivalry.
Threat of new entrants- low
The financial industry is highly competitive as aforementioned. Most fundamentally, in the banking sector that bank of America operates, branding and effective financial product and service development is highly imperative for any new entrant. Establishing of a brand is one of the most fundamental hindrances for any new entrant. As a new bank within the market, there are numerous start-up costs (Bradley 2011). As such, financial investment into start-up capital, research, product development, branding, extensive marketing are some of the surmount start-up costs that a new entrant has to grapple with. Additionally, majority of the industry leaders operate within the international framework. As a clear example, bank of America has branches within the international market with a controlling market share in US. The organization thus enjoys large economies of scale which pose a daunting environment for new entrants that would like to compete against the organization in the banking sector.
Threat of substitutes- high
Most imperative, the product specialization of the organization exudes a high threat of substitutes. The consumer base has a wide variety of choices among the diverse banking institutions and so forth. Most fundamentally, a more intense customization has been on the rise within the industry. Consumers can approach an individual bank with specialized financial packages that are within their preference. The concept of customization of financial products poses the evident notion of high threat of substitutes.
Bargaining power of buyers- medium
Buyers within the sector have the capability to switch between the diverse brands evident due to the minimal switching costs among the sector players. Admittedly, bank of America and other banks cater to the mass market in which the interest rates are laid forth by the federal government. The inculcation of the bank in its influence on the interest rates lays forth a daunting environment in regards to customers exuding an extensive bargaining power. The interest rate, through the influence of the government denotes that the buyers or consumers cannot make an extensive influence on the prices of the diverse financial packages.
Bargaining power of suppliers-low
Suppliers within the banking industry mainly include the organizations that provide the business with papers and other documents to cater for the paper banking within the industry. Hence, from the analysis of the banking industry, the suppliers exude minimal bargaining power in regards to the products and services that they provide to the companies. The switching costs to other suppliers is extensive and within an easier mandate.
Internal assessment of bank of America
An internal assessment of the bank of America denotes the inculcation of the internal factor evaluation. The use of the internal factor evaluation denotes an analysis of the strengths and weaknesses of bank of America within a numerical mandate and evaluating the outcomes and what they denote. Thus, a clear analysis of the internal environment is as follows:
The above weighted average denotes that the organization has been on a slack in regards towards incorporation of proper approaches in mitigating the evident challenges within their operational mandate. Hence, towards sustenance of effective performance, it is imperative that the organization invests into proper approaches in order to ensure proper mitigation of the operational challenges.
Swot analysis of bank of America
Bank of America denotes one of the world’s largest financial institution that has been serving consumers within the diverse economic levels of income. Thus as the largest bank holding company in USA, its operational mandate has been impacted by diverse factors that impede on their operational mandate. The organization serves clients in over 150 countries and being ranked highly in the fortune 500 companies. Hence, the inculcation of the SWOT analysis is a plausible approach towards comprehending the organizational operational environment. The SWOT analysis denotes the evaluation of the organizational strengths, weaknesses, opportunities and threats. Thus, a SWOT evaluation is as follows:
Bank of America exudes one of the most formidable brand image and value. The organisational formidable brand has been as a result of its plausible service and increased customer satisfaction. Investment into plausible service delivery has been imperative towards its brand image growth.
Bank of America has a strong internet presence: the organisational operational mandate denotes a heightened investment into diversification of its products and services. The diversification denotes encompassing the internet within their operational mandate.
Bank of America exudes a large global presence: accordingly, the organisation has been investing into acquisition mergers and joint ventures that have catapulted the organisation to greater levels of global presence. As such, the strong position within the local and global market has been critical towards sustenance of profitability and operational excellence
Concentration of sales in US: despite the extensive market presence in over 150 countries, it is imperative to acknowledge that the country generates 90% of its sales from the domestic market. The international environment only generates a meagre 10%.
Mismanagement of federal bailout: the company has been grappling with cases of mismanagement of its bailout money. Furthermore, the evident laying off of its directors has become an aspect of concern for evaluation within the company.
Emergent markets: bank of America has a novel avenue to increase its market share and expand its operations to countries such as china and Brazil. Through investing into an expansionary approach, the company is bound to necessitate effective performance due to its numerous products and services.
Internet banking is a novel avenue for investment: the increasing internet use across the globe necessitates an effective and plausible environment in which bank of America can capitalise on. The organisation already has the internet infrastructure in place as evident in the USA market.
Competitive rivalry: there is extensive competitive rivalry within the banking sector. As such, the banking sector exudes formidable competition from organisations such as JP Morgan, Citigroup and Wells Fargo.
Slowed economic growth: the economic environment, despite the revival of the diverse regions has been on the slow mandate. The gradual growth especially within the banking sector has been as a result of high regulations that impede on the operations of the organisation.
Strategic management plays an imperative role to the various businesses across the globe. Through strategic management, the aspects of strategic analysis, formulation and implementation arise which directly affect the path of a business. Hence, understanding of the relationship between the various aspects of strategic management ensures that the business makes viable structural decisions. Accordingly, from the focus on Bank of America, it is a company that is colossal both in stature and dominance. Thus, the clear analysis of its opportunities, threats, strategies in formulation and implementation ensures that it retains its throne as a leader in emergent and mature markets.
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