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Bank Of America's Strategic Initiatives: The Traditional Essay

Bank of America's Strategic Initiatives: The traditional ways in which banks operate have been broken down by the recent political, socio-economic and technological changes that have occurred around the world. The recent changes have also influenced the economic trends, which have had a significant impact on the banking industry. Banks have largely been involved in product and geographical expansion in foreign and emerging markets because of globalization and deregulation. Notably, this process of expansion in the banking industry has been accelerated by the implementation of new technologies.

However, recent economic trends have also resulted in an essential change in the distribution and cost structure of financial services. This is because more non-banking institutions and online sources are offering banking business products because of the occurrence of disintermediation. Consequently, banks have been forced to alter their operations and change their ways of conducting business because of the resultant increased pressure on the whole industry.

Impact of Recent Economic Trends on BOA:

As a major player in the United States banking industry, Bank of America has been largely influenced by the recent economic trends that have impacted its operations. These has resulted in the bank's troubling trends with analysts predicting that it will have a difficult time to grow its business in the future (LaCapra, 2010). In the second quarter of 2010 fiscal year, Bank of America earned less money and generated less revenue than the first quarter because of the changing economic trends. Moreover, the corporation experienced a profits decline in four of its six business lines during the same period. This was also coupled by an ongoing loss of money in Bank of America's home loans division.

Regulatory reforms in banking industry because of the changing economic trends have a major impact on the company's revenue growth. For example, the Durbin interchange amendment is expected to lessen Bank of America's annual profit by approximately $5 billion because of restricting banking charge fees to merchants. Because of the impact of the recent economic trends, the corporation's management has commented on the changes in the banking business and the difficulty in the existing operating environment.
Bank of America's Strategies:

In order to adapt to changing markets and achieve its strategic goals, Bank of America has taken various strategic initiatives and tactics including:

Deepening Relationships:

For Bank of America to achieve its goals and increase its annual profits and revenues, the company has adopted a tactic of intensifying relations between its various business units (O'Daniel, 2010). This tactic involves improved measures to cross-sell bank accounts to investment clients, provide account holders with an investment account and offer products and services to clients that don't have broad relations with the corporation. Consequently, the corporation will not be involved in big acquisitions or mergers but rather improve its operations while shedding unwanted assets.

Customer-focused Strategy:

Bank of America is committed to attract, maintain and deepen a customer relationship from every customer relationship in order to achieve its goals ("Bank of America," n.d.). To achieve this, the corporation offers products and services that promote…

Sources used in this document:
References:

"Bank of America." (n.d.). Bank of America: Investor Relations. Retrieved July 27, 2011,

from http://phx.corporate-ir.net/phoenix.zhtml?c=71595&p=irol-newsArticle&ID=407277&highlight=

"Bank of America Small Business Banking." (n.d.). Economy Watch. Retrieved July 27, 2011,

from http://www.economywatch.com/banking/small-business/bank-of-america.html
from http://www.thestreet.com/story/10808834/1/bank-of-americas-troubling-trends.html
O'Daniel, A. (2010, September 14). Bank of America's New Strategy: Hard Work and Execution. Retrieved July 27, 2011, from http://www.bizjournals.com/charlotte/blog/bank_notes/2010/09/bank_of_americas_new_strategy_hard_work_and_execution.html?page=all
27, 2011, from http://www.managementparadise.com/forums/human-resources-management-h-r/213917-human-resource-management-bank-america.html
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