Verified Document

Bank Of America Strategy Bank Of America's Essay

Bank of America Strategy Bank of America's Strategic Initiatives Against Competitive Forces in the Global Economy

Bank of America is one of the largest financial institutions in the U.S. As with many other financial institutions, such as Chase, Citigroup and credit unions, Bank of America faces many dynamic forces in the economy, both domestically and globally and Bank of America must engage in several strategic initiatives in order to retain its core competencies, competitive advantage, and operations that continue to drive Bank of America's business toward success.

To do so, Bank of America must continue to be aware of the recent trends such as sovereign debt, housing, unemployment, durable goods, and energy / commodity prices affecting the global marketplace, ensure the strategies they develop are quick to adapt to these changing conditions, and hedge against the risk that economic forces bring.

Bank of America's Strategic Initiatives Against Competitive Forces in the Global Economy

Bank of America provides financial services to customers across the globe in over 40 countries (Bank of America, Annual Report, 2011, pg. 2). By providing financial services to their clients and customers, Bank of America has positioned itself to develop several strategies to weather the economic downturn.

Recent Trends Upsets the Global Economy

Bank of America has faced a number of disturbing trends in the marketplace and there has been no shortage of bad news. Since the Great Recession started, the news has ranged from dismal to "dreary" (Bank of America, U.S. Economic Weekly, 2011, pg. 2). Even as the economy has shown signs of stabilization and growth, a number of recent trends continues to provide caution to Bank of America's operations -- sovereign debt issues, unemployment, housing, durable goods, and energy / commodity prices.

Sovereign Debt Issues.

Globally and domestically, debt is a big issue and a threat to the recovery (Bank of America, Annual Report, 2011). In Europe, several countries are still at risk of default and even though Greece has been bailed out, they are still on the brink of default (The Economist, 2011). This has created significant...

4).
The U.S. is also mired in debt and has become a topic of political debate with the risk of a possible default by August (G.I., 2011). In their report, U.S. Economic Weekly by Bank of America (2011), should the nation default, the repercussions will be wide spread in which there will be another recession. So far, the issue that has Bank of America worried is the political fighting surrounding the debt ceiling (Bank of America, U.S. Economic Weekly, 2011, pg. 3).

Unemployment.

Since the Great Recession started, unemployment skyrocketed to 9% has remained at that rate. Some economists consider 9% the new norm because the base unemployment rate has shifted (Weidner & Williams, 2011). With high unemployment, consumers will not spend, lack confidence in the economy, and generally ineligible for loans and credit. With a lack of confidence in the economy and the high unemployment rate, many goods and products offered by companies will have to be offered at lowered prices and some goods and services will suffer (Bank of America, U.S. Economic Weekly, 2011).

Despite the high unemployment, Bank of America has become somewhat optimistic that hiring and growth will continue into 2011 and 2012 (Bank of America, CFO Outlook, 2011).

Housing.

Bank of America's confidence in a housing recovery is fading according to their latest U.S. Economic Weekly report. Bank of America estimates that it will take 17 months for the current housing market to unwind itself, assuming 1) that foreclosures will slow and 2) that delinquencies in mortgages will be resolved without foreclosure process (Bank of America, U.S. Economic Weekly, 2011). Both of these scenarios are unlikely and Bank of America continues to predict this trend in the coming years (Bank of America, U.S. Economic Weekly, 2011).

Durable Goods.

Because of high gasoline prices and other inflationary energy prices, durable goods such as cars (and the loans to get them) remain out of the reach of consumers and affects consumption. Many consumers, already reeling from…

Sources used in this document:
References

Author Unknown (2011, May 26). World's Worst Menu: Greece Has No Good Options Left. The Economist. Retrieved May 31, 2011, from http://www.economist.com/node/18744305

Bank of America (2011, May 27). Bouncing Like a Slinky. U.S. Economic Weekly. Retrieved May 31, 2011, from http://corp.bankofamerica.com/publicpdf/products/abf/economic_weekly.pdf

Bank of America (2011). Bank of America 2010 Annual Report. Retrieved May 31, 2011, from http://media.corporate-ir.net/media_files/irol/71/71595/reports/2010_AR.pdf

Bank of America (2011). CFO Outlook 2011. Retrieved May 31, 2011, from http://corp.bankofamerica.com/publicpdf/products/abf/Final_PDF.pdf
Dealbook (2010, September 14). Moynihan Outlines Bank of America Strategy. Retrieved May 31, 2011, from http://dealbook.nytimes.com/2010/09/14/moynihan-outlines-bank-of-america-strategy/
G.I. (2011, January 13). The Debt Ceiling and Default. Retrieved May 31, 2011, from http://www.economist.com/blogs/freeexchange/2011/01/americas_debt
International Money Fund (2010, January). Global Financial Stability Report. Retrieved May 31, 2011, from http://www.imf.org/external/pubs/ft/fmu/eng/2010/01/pdf/0110.pdf
Weidner, J. & Williams, J.C. (2011, February 14). What is the New Normal Unemployment Rate? FRBSF Economic Letter. Retrived May 31, 2011, from http://www.frbsf.org/publications/economics/letter/2011/el2011-05.html
Cite this Document:
Copy Bibliography Citation

Related Documents

Bank of America Leadership Overview of Corporation
Words: 1867 Length: 5 Document Type: Case Study

Bank of America Leadership Overview of Corporation Bank of America Corporation, a multinational banking and financial services organization that is the second largest holding company in the entire United States by assets, and the fourth largest bank by capitalization. Headquartered in Charlotte, North Carolina, the banks serves clients in more than 150 countries and has a business relationship with over 99% of U.S. Fortune 500 companies and 83% of the Fortune Global

Bank Manager a Business Report on the
Words: 1714 Length: 6 Document Type: Essay

Bank Manager A business report on the forecasted analysis of EcoGenics, Inc. Company with two products EcoGenics, Inc. Authored by: A business report on the forecasted analysis of EcoGenics, Inc. Company with two products Company overview Product cost estimate Variable costs Fixed Costs Selling Price estimate Cost plus price Market Price Break even analysis per product Company Break-even five year financial projection operational budgets five year income statements investment appraisal net present value environmental impact reflective About Our Company EcoGenics is a United States of America-based company that specializes in the manufacture and

Bank of America Is a
Words: 2991 Length: 10 Document Type: Research Paper

S. The bank expanded into the Chicago market. Bank of America, with a strong California base, was already the largest bank in the U.S. By deposits at that time. The company completed the largest bank merger in U.S. history with the acquisition of NationsBank. The next major step was the 2004 acquisition of FleetBoston, followed by MBNA, a major credit card company. The bank began to expand outside of the U.S.

Bank of America's Strategic Initiatives: The Traditional
Words: 1046 Length: 3 Document Type: 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

Bank of America Is One of the
Words: 2406 Length: 7 Document Type: Essay

Bank of America is one of the largest financial services company in the U.S. It is the largest bank by assets, largest commercial bank by deposits and is the second largest by market capitalization in the United States. In the Porter's Five Forces Model, Bank of America's main competitors include JPMorgan Chase, and Wells Fargo. Bank of America does have a lot of key factors working in its favor. The

Bank of America SWOT Analysis: Bank of
Words: 950 Length: 3 Document Type: SWOT

Bank of America SWOT Analysis: Bank of America is one of the principal financial institutions across the globe with a broad range of customers that include individuals, small businesses, middle-market businesses and large corporations. The company also has a diverse range of products and services including asset management, banking, investing and other financial products. Currently, Bank of America is regarded as America's largest bank holding company in assets and the second

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now