2.      Identification of Key Strategic Issues and Problems

The Bank of America needs to understand: (Milner et al., 2013)

• Where is the bank heading;
• How to avoid/prevent future exposure during economic crisis;
• Understand what the financial landscape will look like when the economy recovers;
• Where will the bank’s opportunity lie; and
• How will the bank position its self strategically to complete successfully and grow?

Political: Bank of America faces pressure of paying back the Federal Reserve TARP funds following a bail out during the financial crisis (Dhulekar, Hensaw and Levy, 2013, p.14)

Economic: Unemployment in the USA is constant at around 8%-10%. The high unemployment rate will result in high savings, low spending, and low borrowings (Neeraj Dhulekar,Chris Hensaw,Ethan Levy, 2013, p.15)

Is My Privacy Protected?

100%! We encrypt everything—your details stay secret. Papers are custom, original, and yours alone, so no one will ever know you used us.

Technological: Bank of America has the best technological advances in the industry, e.g advanced bill-payment options for customers, apps for smartphones, advanced ATM technology allowing customers to deposit without envelopes (Dhulekar, Hensaw and Levy, 2013, p.15)

Legal: Bank of America faced investigations from the Securities and Exchange Commission (SEC) of the large bonus paid at Merrill Lynch, which upset their shareholders. A law suit settlement was reached to shareholders in the amount of $150 million (Dhulekar, Hensaw and Levy, 2013, p. 15)

Its main stakeholders are investors, shareholders and its customer base (depositors). However, its biggest financial revenue and profit takings come from mortgage loans to investors making it the largest mortgage provider in the USA following the acquisition of Countrywide Financial in 2007. A wrong direction in management could potentially increase in debt and have a ripple effect on the USA economy.

Management needs to fully recover their financial position as of before the recession occurred in order to compete against the major competitors who have already financed and paid off their TARP. Management also need to understand the effectiveness to continue merging or acquiring other banks including expanding into other locations given that their financial recovery is slow.

Is AI Involved in Writing?

Nope—all human, all the time. Our writers are pros with real degrees, crafting unique papers with expertise AI can’t replicate, checked for originality.

Lessons learned must be a key focus for management and understand where they went wrong in the past, namely:

• Do not overestimate the value of assets;
• Do not loan to households that cannot afford to repay;
• Implement systems to track loans to understand if customers are paying back and do they qualify for loans;
• Build trust with shareholders;
• Understand risk and different country legal systems will be a major factor for success;
• Understand political processes;

3.      Diagnosis: Analysis and Evaluation

“Bank of America is the world’s largest bank based in Delaware and operating under

USA. federal law with its headquarters based in Charlotte, North Carolina. It serves individual customers, small and middle enterprises, and large corporations in 175 countries. Bank of America business lines includes banking, investing, asset management, and risk management products and services. In United States alone, BOA had 59 million customers served through 6000 retail banking offices, 18000 ATMs, and online banking. As of June 30, 2008 it had total consolidated assets of $ 1.7 trillion, deposits of $ 785 million, and stockholders’ equity of $ 163 billion)” (Yulianto and Adrian, 2017, p.2)

Why Are You the Best for Research?

Our writers are degree-holding pros who tackle any topic with skill. We ensure quality with top tools and offer revisions—perfect papers, even under pressure.

Its product lines consist of:

Fig. 1. Bank of America  Corporation Product Lines. (Kilpatrick, 2015)

“Bank of America’s strategy over the past 5 -10 years has been based on expanding its product line by merging and acquiring Countrywide to expand its mortgage portfolio and Merrill Lynch to expand its investment banking customer base and product line. Their strategy has been based on personalisng its products across customer segments as a key driver for positioning. However the financial crisis had impacted and its strategy and put the bank into a complex and costly mess” (Dhulekar,  Hensaw, amd Levy, 2013,p. 37)

a)     Internal Analysis

I.            Business Definition and Mission

“The Bank of America is a multinational institution which provides it’s customers services in investment and wealth banking. It has a net asset base of $2.2B and ranked the fourth (4) largest bank in the USA with a total capitalization value of over $2B”. (Dhulekar, Hensaw and Levy, 2013, p.9)

Figure 2: Financial market share (Kilpatrick, 2015)

“It main purpose is to make opportunity possible for all customers and client and every stage of their life. Its objectives are to services it three customer group, offer all of its capabilities in the US and investment capabilities world wide” (Kilpatrick, 2015)

II.            Bank of America VIRO Analysis

“Bank of America competitive advantage lies in its effective strategic planning process, huge asset base with regards to infrastructure, technology and talent, sophisticated financial technology and IT and its ability to leverage the government relationship for favorable macro- economic conditions”(Kilpatrick, 2015).

Figure 3. Bank of America VIRO Analysis (Kilpatrick, 2015)

III.            Bank of America Value Chain

(See   Exhibit 1)

IV.            Strengths and Weakness from Internal Analysis

The key strengths are:

         Significant presence throughout the world

         Asset rich and extensive underwriting portfolio

         Known brand

The key weaknesses are:

         Years of scandals have damaged the reputation and brand

         Lost money over the years

         Customers were not in-favor of the Countrywide acquisition

V.            Recent Merger/Acquisition/Divestment Activity

Over the last ten (10) years the Bank of America has adopted a strategy based

on acquisition and merges. In July 2008 the Bank of America acquired

Countrywide in order to gain entry and expand its mortgage product line and on 1

January 2009 acquired Merrill Lynch to gain entry and expand the investment

product line (Dhulekar, Hensaw and Levy, 2013,p. 37)

The strategic merges where seen as an important strategic move by the Bank of

America. Its customers were losing faith with the bank given the low uncertainties

of the economy and market (Dyer H., 2005).

By acquiring Merrill Lynch, the bank was able to expand its investment portfolio

and increase its global presence. However some may argue that the United

States Government forced the Bank of America to acquire Merrill Lynch to avoid

the same outcome and faith that occurred to the Lehman Brothers.

The key initiatives from the acquisition meant that the Bank of America could

offer its customer base a greater investment product which prior to the acquisition

was week. In addition Merrill Lynch brought its large resource and extensive

technology and infrastructure capabilities.

The acquisition of Countrywide provided the Bank of America with an entry into

the mortgage service markets and expanded its capabilities in that a market.

b)     External Analysis

I.            Five Force Analysis

Based on the Bank of America’s mortgage business as being the case for its financial problems at the time of the analysis, the analysis only takes into consideration the mortgage segment evaluate its attractiveness to formulate recommendations for moving forward.

Who Writes My Assignments?

Experts with degrees—many rocking Master’s or higher—who’ve crushed our rigorous tests in their fields and academic writing. They’re student-savvy pros, ready to nail your essay with precision, blending teamwork with you to match your vision perfectly. Whether it’s a tricky topic or a tight deadline, they’ve got the skills to make it shine.

Figure 3: Porter’s Five Forces Diagram (Kilpatrick, 2015)

Threat of Rivalry: “Threat of rivalry is high with low diversity among competitors. High barriers to entry and low demand in current economic situation which forces incumbents to compete and cut costs”(Dhulekar, Hensaw, Levy, 2013p. 12 & 13).

Barriers to Entry. “ Barriers to entry are moderate-high. There are increasing government regulations and demands for low cost operations make the industry less attractive” ”(Dhulekar, Hensaw, Levy, 2013p. 12 & 13).

Will My Paper Be Unique?

Guaranteed—100%! We write every piece from scratch—no AI, no copying—just fresh, well-researched work with proper citations, crafted by real experts. You can grab a plagiarism report to see it’s 95%+ original, giving you total peace of mind it’s one-of-a-kind and ready to impress.

Supplier Power: “ Cost savings are important and drivers the importance of having good technology and innovation place “”(Dhulekar, Hensaw, Levy, 2013p. 12 & 13).

Buyer Power:  “Given that switching costs are highly competitive, this allows buyers to shop around ”(Dhulekar, Hensaw, Levy, 2013p. 12 & 13).

.

Threat of Substitute: “This is low because small banks cannot not complete for loan serving with larger banks”(Dhulekar, Hensaw, Levy, 2013p. 12 & 13).

Can You Use Any Citation Format?

Yep—APA, Chicago, Harvard, MLA, Turabian, you name it! Our writers customize every detail to fit your assignment’s needs, ensuring it meets academic standards down to the last footnote or bibliography entry. They’re pros at making your paper look sharp and compliant, no matter the style guide.

2. PESTLE Analysis

Following on from the 2008 financial crisis, the markets experienced a global downturn which resulted in the collapse of the USA housing market. A number of major banks went into bankruptcy, stocks were greatly devalued and the government had to step in to stabilise collapse through bank obligation assurance ( Dhulekar, Hensaw, Levy, 2013, p. 19)