Swot_Analysis

Bank of America SWOT Analysis Reginald Ezeh. University of Phoenix MGT/521 – Management GA11MBA06 Maria Keller, EMBA December 20, 2011 SWOT Analysis for Bank of America. I have the role of a mutual fund manager who will be deciding to invest or not to invest in Bank of America. The framework I will be looking at for this paper will be doing a scan of the company to review their internal and external departments. The areas I will look at will be their strengths, weaknesses, opportunities, and threats, and all of these will lead me to develop or see the Bank of America SWOT matrix. This matrix will lead me to the conclusion either to invest or not to invest in this bank. SWOT stands for strengths, weaknesses, opportunities, and threats. The strength and weakness are the internal components, whereas the opportunities and threats make up the external components. Strengths This is the time to look at what will make Bank of America have superior advantage over its competition. I found many things about the Bank of America and I will list a few here: * Bank of America has many products and services for their diversified customers, these couples with all their services can be accessed on the Internet with certain restrictions to protect the bank and public. * A member of the Dow Jones and the S and P 500 index. * Bank of America is the second biggest company in the United States that do not deal in crude oil. * Its customer satisfaction is high as well as great customer service; these culminate into a very good brand name. * Global consumer and small business loan is the banks biggest section that generates the most profit. * Bank of America has favorable access to distribution networks to get information and services to its numerous customers worldwide. * Bank of America has a worldwide presence; as a result its numerous acquisitions, joint ventures, and acquisitions have built a strong reputation and presence locally. * Bank of America is been ranked by Forbes as the third largest corporation in 2010. * They have been also ranked fifth largest company because of total revenue and can boast of 12.2% of all the countries deposits. * By market capitalization, Bank of America is rated second and the largest bank holding company in the country. Weakness This is also known as any limitations that the company has. It may be the opposite of any of the strengths. With Bank of America, I found the following as their weaknesses: * They generate 10% of international sales and 90% locally in the United States, while they have clients in more than 150 countries worldwide. * When Bank of America raised rates as well as interest rates their customers complained and some went in protest to this action closed out their accounts. * Bank of America was criticized for its senior management mishandling of the federal bailout money, this led to the resignation of six of its directors, and also led to the formation of a regulatory office to prevent such events from happening again. * Bank of America is not as small any more, and finds it difficult to compete with small local operators. Opportunities This area is also called one of the external factors that will lead the bank to increase its profit growth, in the following areas with Bank of America as I saw it is as follows: * Bank of America used the arrival of new technologies to its advantage for example, using the Internet by lunching online banking, bill pay, account monitoring, and printing of statements on demand in all the international countries that they do business in. * They diversified their banking to suit different cultures they operate in. The best example in their Micro Banking for small sole business owners in Mexico as well as the free wire transfers of funds from the United States to Mexico. This is an unfulfilled customer needs. * They do offer very innovative products and services to their clients. * Bank of America has have almost doubled its client globally through mergers, acquisitions, and joint ventures. The Merrill Lynch acquisition. * Bank of America has penetrated markets domestically by acquisition like when they acquired Commonwealth Mortgage after the housing meltdown. * Bank of America can also increase market- share by product development as in increasing customer’s wealth and trend through investment after any financial crisis like the housing collapse. Threats These changes that are externally harmful to the bank in the form of new regulations, many trade barriers, shift in consumer taste and loyalties, implementation of new products. I found these threats with my analysis research to be the following: * The new regulations of the government to avoid another housing collapse will make the banks have losses and bad profits, due to hard regulations. * The Bank of American is facing great competition from other banks or financial houses like Chase, Citigroup, and Wells Fargo. * Bank of America globally is facing serious threats due to Political instability, and tariff regulations in the numerous countries that they do business in. * Their board always pushing for profits will always push the directors for good governance and improvement of oversight. * The bank is always facing stern competition in an effort to maintain its market share while protecting its clients, policies from new regulations and policies. * Bank of America has faced numerous bad publicity events as well as its integration of Merrill Lynch. As they have seen that this SWOT analysis can be used by the shareholders and stakeholders to decide what they want as it will be of benefits for the Banks. The shareholders will guide the bank into profitability, and for the stakeholders in very many ways that as, customers, or investors. The SWOT Analysis could be used as a good planning for numerous activities but not limited to the following: * Selection of the Bank of America to select their objectives to put in writing what the goals and objectives of the bank by the directors/shareholders. * The bank of America will do an assessment of the present situation of the bank with it product/service analysis and their life cycle. * Next the bank will define the strategic issues that define the development of a corporate plan. * Establish the criteria success factor, which simply means the achievement of objectives. This is the measuring grid for the whole banking operation. * The plan preparations styles are addressed here, and plans are developed. * Finally the monitoring of results plans are put into place, also the plans for correcting plans that are not up to par, and this may lead to amending the banks objectives, and strategies. The bank of America can do SWOT analysis on its competitors for marketing purposes to discover their strengths and weaknesses. The banks marketing managers will use this tool to examine their Competitor’s cost structure, profit sources, competitive positions, and any other tools that they find necessary to give them a complete market analysis. These managers use a variety of tools to do this but not limited to these ones, focus groups, statistical surveys, test markets, on-site observation, and environmental scanning to help identify trends. Bank of America is meeting all their goals their board set out for the company. They have reached their benchmarks like * Bank of America the world’s largest banking house. * Have as clients’ individuals, small, middle-market companies and very large corporations. * Bank of America is the 2nd largest bank by market, and largest bank in the country by assets. * Has relationship with 99% of the Fortune 500 companies. Based on all the information I have read on this SWOT analysis, the part of this SWOT analysis that made me decide to invest in the Bank of America mutual fund is the strengths, and the opportunities of this bank. The bank is top two in all categories I reviewed. It has a bright future, and their profit in the last three quarter of this year has been phenomenal. This is a good place to invest as it is very profitable with the bad worldwide economy. I have full confidence in my decision to invest in this bank, and that we will as investors become profitable with this decision. References America's Money Crisis. (2008). Retrieved from http://money.cnn.com/2008/11/10/news/companies/dhl/index.htm Lynch, D.J. (2008). Thousands of layoffs by DHL, ABX Air hit Wilmington, Ohio. Retrieved from http://www.usatoday.com/money/economy/2008-12-15-wilmington-dhl-abx-air-layoffs_N.htm Nickels, W. G., McHugh, J. M., & McHugh, S. M. (2010). . New York, NY: McGraw-Hill/Irwin. University of Phoenix. (n.d.). Quality Textiles International. Retrieved from University of Phoenix, MGT/451 supplemental course material. Yuki, G. (2010). Leadership in Organizations (7th Ed.). : Pearson Education, Inc.