SWOT ANALYSIS MATRIX
What the SWOT Matrix represent for the organization.
They are factors that the organization have direct control and can influence. The bank of America diversified operations, which ensure its profit realization. In the year 2012, it derived 34.5%, 20.4% and 16% from CCB segment, global banking and global operations respectively (Marketline. 2012). It has a large scale of operation as it deals with investment banking, assets and wealth management, retail financial services, commercial banking, card and security services and global markets. Its capital liquidity position makes it immune from possible collapse during economic crisis. Its huge resources facilitate research and developments, which enhances innovativeness such as in mobile banking which adds to its competitive advantage.
These characteristics hinder a firm’s competitive capability. However, the firm can influence or has direct control on these characteristics. The bank of America has a weakening management that has contributed to the rise of its operation costs. These are particularly non-interest costs that the firm incurs through payment of wages, investments on new technology, equipment, professional and advocacy services (Marketline, 2012). Subprime mortgage crisis is the major cause of the company’s poor performances; this is due to the reduced credit availability, interests on credit and consumer borrowing.
The bank of America has many global channels than most of its competitors, these gives the bank marketing, distribution and market penetration advantages. The company by 2012 had over 50 operations in US and more than 40 elsewhere (Marketline. 2012). Its variety of services adds up to it total revenue which yield high returns, in the year 2012, it obtained 34.5% from CMB, 20.4% from global banking, 19.6% from wealth management and 16% from global market. The expansion of the banking sector has benefited the company. It has a large customer base of excess than 53 million in its 5500 banking and 16300 ATMS (Sadler, 2003).
The introduction of financial reform act in 2010 had a direct effect on the firm’s revenue. The global economic crisis also reduced its operations, the poor economic growth and unemployment had a negative impact on the firm too (Marketline. 2012). Competition and its poor performances in the recent past reduced it income by 11%, which is an equivalent of 83, 335 million US dollars.
The purpose of developing the SWOT matrix is to develop an upcoming plan that takes into concern various internal and external factors while looking for other alternatives that the bank can use to minimize the effects of the external factors while maximizing the internal opportunities and strengths.
SO (strength and opportunities) are factors that the bank can use to enhance its performance. WO (weaknesses and opportunities) are the factors that the bank can use to minimize its weaknesses and better its performance. ST (strengths and threats) are factors or the strengths that the bank can use to cushion the threats presented by the external environment. WT (weaknesses and threats) is a defensive strategy to defend the bank against any adversity that might be brought by the external factors (Sadler, 2003).
The above alternatives address the most critical challenges facing the bank. If applied, the above alternatives can potentially transform the bank to one of the best banks that have ever existed.
Marketline. (2012). Bank of America Corporation. New York: Marketline
Sadler, P. (2003). Strategic management. Sterling, VA: Kogan Page.