- The Case study is related to Bank of America. The real challenge or business problem pertaining to Bank of America is related to the external pressure they had. In the year 2008, the bank had collapsed in complying with their insurance amount. The bank had reached on the verge of the bankruptcy. However, the addition of $ 20 Billion Funds helped them to rescue their operations once again. This was the chaotic external problem which has been highlighted in the context of Bank of America. Apart from the same, there is an internal issue as well that pushed Bank of America more towards the jeopardy. The company had lower than necessary level of communication and interaction with their employees as well as the shareholders due to which the problems have increased for them by brining lots of issues and problems for them. Though, the financial crisis was a national issue for the entire United States that engulfed almost every financial institution of the country, but still the lacking was under the policy making of the bank itself.
- Strategies are located at the heart of an organization. The organizations which are efficient in terms of managing their strategies are the one that can sustain their operations in the market with proper effectiveness and zeal. There are two different types of strategies that can be used by the companies such as Red Ocean Strategy and Blue Ocean Strategy. Based on the current economic times of the United States, and the situation of Bank of America, it is recommended to the company to use Red Ocean Strategy. This particular strategy will allow the company to bring something new within their services and connection to compete easily and perfectly with their competitors. Some of the major competitors of bank of America are JP Morgan, Goldman Sachs and Wells Fargo. It is also recommended to the company to strengthen their position by remaining in a specific boundary to have a greater market share in the Banking Industry of the United States.
- There are numerous articles which have been highlighted in the connection of the Global Financial Crisis (GFC). Most of the articles have highlighted the reflection of the financial crunch and problems over the financial institutions. The article of Peters et al. (2012) also suggested red ocean strategy to the banks which have been affected heavily from the recent economic downturn. They highlighted the factor of re-checking the strategies and policies for the banks through which they can overcome on the problems, along with decreasing the cost of their operations. One of the articles which have been discussed by Reinhart and Rogoff(2008) revealed that the combination of blue and red ocean strategies are essential, as blue ocean strategy enable the companies to increase the factor of differentiation, long with decreasing their service pricing to compete with their peers with ease and sheer efficacy.
- Balance Scorecard is an important element and tool that uses by the organizations to maximize the potential of the companies and strengthen their position with perfection. There are certain factors needed by Bank of America to ensure an effective implementation and monitoring of the strategies. It is becoming more and more important for the banking sector to have sheer leniency towards their customer orientation, as it is most important element in increasing the financial potential of the companies, and strengthen their position in the market. Apart from this implications, it is also important for the companies to increase the factor of proper monitoring and surveillance. It is recommended to the banks to strengthen their internal audit factor through which they can actually maximize their core potential in the market. The efficient and higher the internal audit factor, the higher will be the probability from which one can maintain their attentiveness in the market.
- The VRIO Analysis of the Bank of America is showing that the bank is highly efficient and valuable as far as managing their well-being in the market. They are not rare, as the company has been working in the Banking industry from numerous years, and has been generating values for their shareholders and customers. They are highly intimate and organized in terms of their operational purpose. It is supposed that the company will grow substantially in the long run. According to the Porter’s Five Forces analysis, it is found that the rivalry among the competition is high. In this connection the bargaining power of the consumers and threats of new entrants is high that may endanger the position of the company. However, the bargaining power related to suppliers would be located on a lower level, which is an efficient sign for the company, especially in the long run.
Peters, G.P., Marland, G., Le Quéré, C., Boden, T., Canadell, J.G. and Raupach, M.R., 2012. Rapid growth in CO2 emissions after the 2008-2009 global financial crisis. Nature Climate Change, 2(1), pp.2-4.
Reinhart, C.M. and Rogoff, K.S., 2008. Is the 2007 US sub-prime financial crisis so different? An international historical comparison (No. w13761). National Bureau of Economic Research.