Assignment 1: Strategic Management and Strategic Competitiveness
Bank of America is regarded as an American multinational banking and a financial services company, situated in Charlotte, North Carolina. The company is considered as the second largest bank holding corporation in the whole U.S in terms of assets (Grant et al, 2010). The Bank of America is ranked as the twenty-first largest company as of 2013 in the United States by total revenue. Furthermore, Forbes ranked Bank of America as the third biggest company universally in 2010. The company was founded in October 17, 1904 by the name of Bank of Italy. The company deals in variety of product segments such as consumer banking, corporate banking, private banking, wealth management etc. As of 2014, the company has a total of 223,000 number of employees globally.
Globalization and technology influence every segment of the Bank of America as the company has a viewpoint that globalization and technology are two foremost factors and these factors have played a vital role for company’s enormous success. These two factors have affected every company and market sector in the world. It is essential for any corporation to perceive these two elements as highly critical and seek the methods to achieve most of the benefits out of them. The company believes that in this age of globalization, the primary key to success and survival for several financial institutions is the way to cultivate partnerships that are strategically developed that will ultimately enable them to be more competitive as well allow the opportunity to provide diverse services to customers (Henry, 2013). The Bank of America handled immense competition to retain and attract consumers in the most efficient manner due to globalization and this led the company to derive to change its business strategies. Furthermore, it was globalization that helped and provided the opportunity to Bank of America for expanding its presence in other dominating markets. The technological changes such as advent of e-commerce, internet tools and other online selling tools have changed the business model and provided enormous opportunities to Bank of America (Grant et al, 2010). For instance, new immersing technologies allowed credit cards to be linked directly to individual bank accounts and thus streamlining the banking process. Another example is the introduction of Smart Card technology that also revolutionized the way people use banking services and it has also affected the Bank of America’ corporate affairs quite significantly.
Industrial Model and Resource-based Model
If Bank of America makes use of the resource-based and industrial based organization model, then there is high chances that the company could observe an increase in its revenues. The resource-based model provides a collection of unique capabilities and resources that deliver the basis for each business strategy. In this manner, Bank of America will be in a position to identify its strength and weakness, while examining the core competencies. This piece of knowledge will ease the Bank of America to devise such a kind of strategy that will support its strengths and as well as to limit the weaknesses (Henry, 2013). In addition, this particular manner of strategy formulation will also provide an efficient way to assess the competitive advantage that could aid in receiving above-average returns.
Moreover, the research-based model will also describe a method through which Bank of America could manage capabilities and resources dynamically and make above-average revenues within banking industry. While on the other hand, the industrial organizational model provides a five step plan which comprises of: the external environment, strategy formulation, an attractive industry, strategy implementation, assets and skills and superior return to help companies attain their maximum goals. While utilizing industrial organizational model, Bank of America will enhance the awareness about substitute products, new entrants, bargaining power of suppliers and buyers as well as the rivalry level (Grant et al, 2010). Furthermore, the company will also do a competitor analysis in which it will assess the strategies, objectives, capabilities and assumptions of its main competitors.
Vision and Mission Statement
Environmental scanning delivers such valuable information that is important to form mission and vision for an organization. The mission statement of Bank of America is stated as “Our mission is to offer lending and investment products that serve low-and moderate-income individuals and families, improve underserved low- and moderate-income communities and create sustainable practices for the long haul.” While the vision statement of Bank of America is stated as “We will be One Team committed to creating success for our clients & for one another.”
Mission and vision statement of Bank of America delivers direction that is required for developing selection of relevant strategy (Henry, 2013). The Bank of America maintains a culture in which continuous improvement is fosters in order to become the best in the banking industry. Furthermore, it assists the company to develop competent and diverse workforce in the world. The competent workforce capital of Bank of America provides this corporation a way to provide new and unique experience to the consumers that helps to develop presence in the international markets as well as to increase the overall sales margin. While the vision statement of Bank of America also contributes to sustain the utmost core values that aid in developing global leaders in the company and to increase the level of responsibility within the workplace environment. The company’s mission and vision statement also motivate the employees to focus on the level of quality and to minimize the cost of services and products which it provides to various world markets (Grant et al, 2010). In addition, the mission and vision statement of Bank of America is focused around the principles of trust, teamwork, passion, valuing shareholders and associates that have played a vital role in the company’ success.
Category of Stakeholders
Over the past few years, the company has deepened the relationships with each of its categories of stakeholders, from customers and employees to community leaders and regulators for the purpose to better understand the concerns and needs of its stakeholders. The company’s put their stakeholders at the centre of every business process (Grant et al, 2010). The company believes that the stakeholders should be satisfied at all times because they are the ultimate reason for company’s growth. The company seriously takes the feedback from all its stakeholders and act on it accordingly. Furthermore, Bank of America continues to work with their clients in the fossil fuel value chain in order to enhance the CSR activities as well as to engage with their critics and stakeholders on the CSR issues (Henry, 2013). The company’s code of conduct translate these core and broad values into the guidance of company’s employees for the purpose to remain competitive in the marketplace and engage with every type of stakeholders globally.
Grant, K., Hackney, R. & Edgar, D. (2010). Strategic Information Systems Management. UK: Cengage Learning. Retrieved from: https://books.google.com./books?hl=en&lr=&id=bTnJAwAAQBAJ&oi=fnd&pg=PP1&dq=Strategic+Information+Systems+Management&ots=AtpEYC6iB1&sig=924aslrVwqED9feU0vp5yVMttBM
Henry, J. (2013). Bank of America Center. Retrieved from: https://uta-ir.tdl.org/uta-ir/handle/10106/20024