After the organization had merged, Giannini made the decision to expand the title to include the letters NT&SA. While most incorporated banks carried letters NA, which stood for national Association, Giannini utilized the NT&SA as a means to demonstrate all of the different services that were provided by the organization. NT&SA stands for National Trust and Savings Association. In the years that followed the merger, Giannini used the significant capital of the Bank of America to expand its operations throughout the United States.

Under the holding company of Transamerica, Bank of America also entered the insurance agency. However, these organizations were forced to separate in 1956 with the passage of the Bank Holding Company Act, which prevented bank owners from holding interests in non-banking subsidiaries. The Bank Holding Company Act also prohibited the practice of interstate banking which forced Bank of America to liquidate the period banks that it owed outside of California. It was not until a change in the federal legislation in the 1980s that the Bank of America was able to again develop its activities outside of the State of California (Bank of America, 2006).

During World War II era, Bank of America became one of the largest banks in California due to the fact that many soldiers had their paychecks deposited directly into banks owned by the company. The traffic undertaken by the banks was so significant that the organization chose to develop a myriad of different technological innovations to improve processing in the organization. The changes that occurred at the Bank of America during this time served as a basis to revolutionize the banking industry.

The Bank of America is noted for its contributions to the development of: original centralized bank operations; automatic check processing; account numbers; and Magnetic Ink Character Recognition (MICR). Because of this technology BankAmerica was able to successfully develop the first credit card BankAmericard which subsequently became known as Visa. In order to compete, other banks in the California station developed their own a credit card which subsequently became known as MasterCard (Bank of America, 2006).

Although Bank of America was forced to relinquish all of its holdings outside of the state of California after the passage of the Bank Holding Company Act of 1956, in 1967, changes were made to the law enabling Bank of America to own subsidiaries outside of California. In response Bank of America developed a holding company known as BankAmerica, which began purchasing other large banks all across the United States. Although these takeovers were primarily successful, a host of poor loans made by Bank America to the third World in the late 1980s left the bank in a precarious spot. In 1986 First Interstate Bancorp of Los Angeles made a bid to overtake Bank of America. In an grief to avoid takeover by the organization, Bank of America chose to sell most of its interests to Chrysler and Charles Schwab Co. By the time the 1987 stock market crash occurred Bank of America stock was trading for less than eight dollars a share (Bank of America, 2006).

Despite a rocky decade, by the 1990s stock in Bank of America had rebounded and Bank of America was again regaining ground. In 1992, Bank of America acquired its most significant competitor Security Pacific Corp. Throughout the course of the 1990s, Bank of America continued to expand, acquiring banks all over the United States. Due to all of its acquisitions, Bank of America is currently the largest bank in terms of deposit share. However, there are other banks that rival the organization in terms of assets, profits, and market capitalization. At the present time, Bank of America is currently working on the construction of a new headquarters in Novel York City. In addition, in 2005 Bank of America purchased the credit card company MBNA for $35 million in cash and stock (Bank of America, 2006).

Strategic Evolution

Critically reviewing the overall history of the Bank of America, it becomes evident that the organization accomplished in strategic evolution through intended expansion. When Amadeo Giannini began merger operations in the unhurried 1920s his intent was clearly to expand the organization. Unfortunately, the Bank Holding Company Act of 1956 put an end to many of the developments that have taken place with respect to the Bank of America. After the legislation was passed Giannini was forced to relinquish both his insurance companies and as interstate banking operations. Once changes were made to the legislation in 1976, the Bank of America continued upon its path of expansion choosing to catch some of the largest banks in the United States. What this effectively suggests is that the strategic evolution of the Bank of America was predicated upon the intended acquisition of other bank operations, with the purpose of increasing the organization’s size of wealth.

In addition to the intentional nature of the acquisitions carried out by the Bank of America, the organization has also demonstrated its intentional strategic evolution through its consistent development of new banking services and technology for the banking industry. Throughout the course of the mid-twentieth century, Bank of America found new and innovative ways to expand the products and services that it offered to customers. Because of these initiatives, many of the current banking techniques that are currently utilized in the industry began with the Bank of America. Credit cards, mortgages, and commercial loans are all representative of the efforts of the Bank of America to provide service to the general public. Given the history of the organization, it seems reasonable to argue that after the passage of the Bank Holding Company Act of 1956 the Bank of America had to gain new methods to attract customers. This is ultimately what promulgated the development of the organization, making it a leader in the banking industry.

Mission/Major Goals of the Bank

Although the Bank of America is currently one of the largest banks in the United States, the organization does not have a unified mission for its overall development. Rather, when addressing the insist of mission it is evident that the organization has broad areas in which it provides its vision for the development of the organization. For instance, with respect to the development of local communities, Bank of America notes that the mission is to “help neighborhoods grow and prosper—to be a catalyst for positive change in communities” (Frequently…, 2006). In addition, the organization offers targeted missions based on the various projects with which it is involved. Specifically, Bank of America notes that, “We provide the financial resources and expertise to help communities achieve their full potential as desirable places for people to live, work and raise families” (Community impact).

What place of this perspective, it becomes evident that even though Bank of America does not have a centralized mission for the development of the entire organization, Bank of America has been able to focus on community development and the principal means for establishing its organization. Overall, Bank of America believes that the development of neighborhoods and communities is essential for the sustainability of the organization over the long-term. To this end, the organization undertakes a wide range of projects, which involve everything from environmental conservation to providing monies for the development of infrastructure into communities in which it operates. Thus, Bank of America has attempted, in recent years, to remain focused on the issue of community development as a means to grow its business.

SWOT Analysis

Strengths

Due to the large number of acquisitions that of taken place in recent years, Bank of America is one of the largest banks in the United States (Datamonitor, 2005).

The community partnerships that the organization has developed have given Bank of America a solid reputation (Datamonitor, 2005).

Because of the organization’s size it has been able to effect coast-to-coast banking centers and a nationwide ATM network (Datamonitor, 2005).

The organization continues to have strong financial performance in the new millennium (Datamonitor, 2005).

Bank of America was voted one of the best organizations who went to work for in 2004. In addition, two top female executives of the organization were named among the “top 50 most powerful women in business” (Bank of America, 2006).

Weaknesses

At the prove time, filling equity markets are making it difficult for the Bank of America to retain its competitive advantage.

The organization is currently experiencing some structural problems as the size and geographical scope of the organization continues to grow (Datamonitor, 2005).

Recent scandals involving the bank—i.e. Enron and the Social Security raiding case—have tarnished the organization’s reputation (Bank of America, 2006).

Bank of America has been cited in class-action lawsuits for imposing excessive overdraft fees on its customers (Bank of America, 2006).

Modern security breaches as a result of a phishing schemes have compromised the organization’s integrity (Bank of America, 2006).

Opportunities

The organization is currently undergoing restructuring which will allow it to incorporate unique businesses (Datamonitor, 2005).

Bank of America is well poised to acquire advantage of growth opportunities in the expansion in the consumer market (Datamonitor, 2005).

The organization is currently expanding its commercial banking and business credit services (Datamonitor, 2005).

Several recent acquisitions have boosted the overall development of the organization—i.e. MBNA and FleetBoston (Datamonitor, 2005).

Bank of America has recently acquired a number of new sponsorships for promoting the organization (Bank of America, 2006).

Threats

Bank of America faces increased competition as other organizations in the banking industry attempt to create nationwide networks (Datamonitor, 2005).

Bank of America faces considerable competition from unregulated finance organizations offering a wider range of products and services (Datamonitor, 2005).

Foreign-exchange fluctuations are also a worthy worry. Because of the extent of the operations undertaken by Bank of America the organization is subject to significant turbulence as a result of foreign-exchange fluctuations (Datamonitor, 2005).

Merger risks are also a considerable threat to the organization. For instance, if BankAmerica and FleetBoston are not able to successfully merge, they may eventually lose customers and suffer from high attrition rates (Datamonitor, 2005).

Bank of America continues to face security issues with respect to its web site. This may eventually have a negative impact on customer service (Bank of America, 2006).

CEO Capability Analysis

The current CEO of BankAmerica is Kenneth D. Lewis. Since Lewis took over in 2001, Bank of America has made important gains in overall revenues. Despite the overwhelming success of Lewis, the CEO has garnered his fair share of negative criticism for his actions of the organization. Talcott (2004) reports that in 2003 Lewis was granted as generous salary of more than $20 million. Critics contend that this amount seems to be fairly excessive given the number of employees of the organization downsized in 2003. A spokesman for the organization argued that Lewis’ salary was based on the overall financial performance of the organization in 2003; remedies for Bank of America grew 17 percent during this time. Further, a spokesman for Bank of America also distinguished that while Lewis’ salary may seem extraordinarily high it is in line with what other top CEOs are making.

Despite the overwhelming criticism that Lewis has received from outsiders, Talcott reports that those working with Lewis in the organization have argued that he has had a certain impact on the development of the company. “I’d say he’s had a very clear impact on the operational and financial performance of the company” (Bank of…). In addition, Lewis has been able to exceed stockholder expectations since 2002. Clearly, what the spot effectively suggests is that Lewis is a competent CEO that has been able to significantly grow the organization in unique years. Although growth has ultimately come at a cost of restructuring the organization, end result appears to be clear for the overall development ofthe organization.

The Industry Environment

Porter’s Five Forces

Competition

Competition in the banking industry will remain a indispensable issue in both the short and long-term. And such competition is rated high today and in the next 5 to 10 years. Competition remains a pervasive issue because of number of mergers that continue to recall place in the industry. Further, recent fluctuations in interest rates have made it were difficult for banking organizations to relate excellent. As such, that he banking institutions have exhibited notable vulnerabilities making them susceptible for takeover.

Substitutes

Substitutes of the banking industry will remain a powerful issue for organizational development entity or future. Under Porter’s analysis, the variable of substitutes would be rated as high. As the number of financial institutions entering the banking industry increases, it will be more difficult for Bank of America to offer products that are both cost-efficient and necessary for expansion of the organization’s customer base.

Barriers to Entry

At the present time, the overall size and scope of the Bank of America and other leading financial institutions in the United States will make it virtually impossible for current companies to enter the market. As such, this variable is rated as low both at the present time and for the next five to 10 years.

Suppliers/Customers

Suppliers and customers for the Bank of America can be grouped together because they comprise the same population. In short, the customers supply the bank with the distinguished revenues that it needs to remain profitable. As such, it is difficult to separate these two entities. With this in mind, it seems feasible to argue that supplier/customers will remain at issue of medium concern both in the short and long-term. Clearly, Bank of America will have to work in order to ensure that it retains its customer base. However, the organization has been sensitive to the needs of consumers and has reacted appropriately with problems have occurred. This coupled with the overall size of the organization will acquire it possible for Bank of America to retain a significant customer base regardless of the changes that take place in the banking industry.

Macroenvironmental Analysis

Competition

The most notable competition in that Bank of America will experience in coming years will be from Internet banking. Through this process, new financial services organizations will be able to offer products similar to those provided by Bank of America. The most notable difference will be that new Internet banks will be able to offer the same products at a worthy lower cost (Dolbeck, 2005)

Substitutes

Considerable competition among well-established competitors in the banking/financial services industry will Force Bank of America to significantly tighten its operations and reduce fixed costs. As such, if Bank of America is to remain competitive with respect to substitutes it will need to consider internal mechanisms of cost control (Dolbeck, 2005).

Barriers to Entry

Here again, the most well-known issue that may impact the development of a Bank of America is the proliferation of online banking. Although the organization currently offers online banking services, new bank/financial services companies operating solely to the Internet will be able to drastically cleave costs making it more difficult for Bank of America to remain competitive (Dolbeck, 2005).

Suppliers/Customers

As interest rates rise in coming years, the overall profitability of large banks such as Bank of America will grow smaller. For this reason, the organization will have to take significant steps to retain its customers and to acquire a new customer base. This will be necessary for the organization to ensure consistent suppliers of revenue (Dolbeck, 2005).

Identification of Strategic Groups

Considering the very strategic groups that exist with the same market occupied by Bank of America, it becomes evident that there are a wide range of strategic groups that are part of this industry. With this in mind, it is helpful to contemplate how various financial service organizations differentiate themselves from one another. Refuting the various operations that retract space in the context of organizations operating in this industry the following strategic groups have been identified:

Banking Services – Some banking services organizations have focused primarily on the development of nationwide banking networks for consumers. Banking services are the indispensable function of Bank of America and Wachovia.

Investment Banking Services – Some banking services organizations have focused primarily on the development of investment banking at retail corporate and financial services. These organizations include Citigroup and J.P. Morgan Chase.

Mortgage Services – Some banking services organizations have focused specifically on the development of mortgage services for customers. Wells Fargo is one of these organizations.

Industry Structure for Bank of America

Critically reviewing what has been written about the industry structure for Bank of America, it becomes evident that there are a number of features that comprise the overall structure for the Bank of America. In particular, researchers have made the observation that the Bank of America is dispersed across 190 different countries. As such the organization is able to operate on a number of different levels, offer a wide range of products and services for customers in a large consumer base. In addition to having a dispersed structure, researchers have also noted that the Bank of America is unique in that it represents a change in the banking industry from a vertical to a horizontal category. “Gradually, as competition between banks has increased, the banking industry has become more horizontal, especially with overseas investment. As a result, there is a greater need for a strong organizational structure” (Industry structure, 2005). What is effectively suggests is that the structure of the banking industry has become a significantly more complex over the course of time. As such, organizations such as the Bank of America cannot be viewed in one variable that effectively explicates all of the changes that occurred in this industry.

Industry Dynamism

Overall, the banking industry is incredibly dynamic because it reflects the continual evolution of the economy. As distinguished by Irons (2005)

The banking industry is the economic center of any community in the United States, whether it is a runt town, major city, space, region or the U.S. as a whole. This stems from the fact that the financial resources of a given area typically flow through the banking industry. The banking industry literally mirrors the economic activity of a given area. It may influence the economics of its station, but it is not likely to get out in front of the commercial and industrial activity of its market space (p. 48).

As a whisper result of this process, banks must continually evolve to improve their overall financial performance. If banks and other organizations in the financial services industry do not effectively change to meet the needs of consumers in the developing economy, these organizations will be unable to hold their financial success over the long term.

While the very context of change is inherent to the development of the banking/financial services industry, Irons goes on to tag that in an effort to improve services offered in this industry, organizations have undertaken a number of new initiatives that have spurred significant growth and change in the banking/financial service industry in the past two decades. According to Irons, the banking/financial services industry has not undergone such extensive changes since the Great Depression. In particular, Irons notes the consolidation of banks all across the United States as a result of the mergers being undertaken by large financial institutions. “By the slay of 1982, when the Depositary Institutions Deregulation and Monetary Control Act went into execute, there were 14,500 commercial banks in the United States. By the end of 2002, twenty years later, the number of banks had decreased to 9,364″ (p. 49). This consolidation of banks has also been consolidation of financial assets for financial institutions. “With 5,136 fewer banks, the assets of the industry hadincreased by more than 300 percent from $2 trillion to $8.4 trillion during the twenty-year period ending 2002″ (p. 49)

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Life Cycle Evaluation

Considering the current location of Bank of America with respect to life cycle evaluation, it seems feasible to argue that even though the organization can trace its roots benefit to eighteenth century America, the organization is still in a period of maturity. This is a witnessed by the fact that the organization continues to grow and evolve even in spite of significant changes in the development of the banking/financial services industry. At the present time, Bank of America continues to acquire regional banks, further extending its reach across the United States. In addition to the fact that Bank of America continues to grow its banking services, the organization has placed considerable effort into developing various other aspects of its business. The recent merger of the organization with the credit card company MBNA is clearly reflective of Bank of America’s desire to continue to grow and strengthen all the financial services that the organization offers. This continual growth and expansion clearly suggest that the organization is still functioning as a mature competitor.

Important Events

The most notable certain events that have taken place in the recent history of Bank of America include: the recent merger of the organization with FleetBoston; the implementation of Six Sigma as a means to restructure the organization; and the modern acquisition of credit card company MBNA (Datamonitor, 2005). While most of the changes that have occurred at Bank of America have been positive overall, there have been some negative events that have taken place in the organization. These include: disclosure of ties to the Enron Corporation and its recent scandal; raiding Social Security benefits of millions of customers to pay fees despite laws protecting consumers from these actions; and significant problems with the organizations online banking services (Bank of America, 2006).

Competitive Position of Bank of America

Competitive Advantages

Researchers examining the competitive advantages of Bank of America has been quick to note that the sheer size of the organization makes it difficult for many regional competitors to acquire a significant market share. With more than 5000 branches stretching across the entire United States, the sheer size of the organization makes it difficult for other banks to offer competitive programs for asset development. As such, Bank of America remains one of the largest competitors in the banking/financial services industry (BofA ad…, 1999).

Although the sheer size of the Bank of America organization makes it strategically viable, researchers have noted that there are other issues that have impacted the overall success of this organization. In particular, the organization has been able to effectively identify its weaknesses and make structural changes that have significantly increased the overall productivity of the organization. The adoption of Six Sigma has enabled the organization to look at its operations in terms of the entire organization rather than honest a group of geographically dispersed branches. “Six Sigma provides its associates much tools to analyze business processes, identify problems, increase efficiency and slit error rates. A significant additional attend is the company’s ability to constantly reinvest cost savings into revenue growth opportunities” (Datamonitor, 2005, p. 7).

Distinctive Competencies

Mogel (2002) in his analysis of bank of America notes that the organization has seven specific areas in which it operates. These include:

Consumer Products – Bank of America has 4,500 banking centers, 13,000 ATMs, 3 million online customers, and holds more than 400,000 mortgages.

Asset Management – The bank has almost $300 billion of assets under management and runs mutual funds with more than $100 billion in assets.

Card and Payment Services – The bank is a major player in the credit and debit card business. Much of this activity has migrated from paper to electronic channels.

Serving Small Businesses – The bank does business with 2 million of the 25 million small businesses in America and more than 30,000 middle market companies.

Internet and E-Commerce – The many customers who use the bank’s electronic billing and payment service can virtually eliminate checks by going online.

Investment Banking – The bank holds more than $27 billion in prime brokerage custodial assets for 700 clients. Bank of America was ranked 10th among mergers and acquisition (M&A) advisors in 2000.

Serving Enormous Corporations and the Institutional Market – The bank’s role in this high-profile arena is in integrating equity securities. It combines mergers and acquisitions with its debt capital-raising activities (p. 50).

While each of these services are clearly integral to the overall success of the organization, it seems reasonable to argue that there are specific areas of the organization that are much more viable than others.

To illustrate this point, one only needs to consider the specific issue of consumer products. Since organization began its operations, the focus has been on the relationship between the organization and its customers. What this effectively suggests is that Bank of America has a long history of dealing directly with customers. This coupled with the fact that the organization has evolved with respect to the needs of its customers clearly suggests that Bank of America has developed the principal tools and resources to be effective in the area of providing consumer products. In this same vein it could also be argued that because consumer products have been the focus of the organization, the overall customer service provided by the organization could also be considered a key core competency.

In addition to the fact that Bank of America has developed a clear ability to develop customer products, it also seems reasonable to argue that Bank of America demonstrates essential competence in the area of credit card services. As the originator of VISA—the largest credit card company in the world—Bank of America also has a long history in the development of credit card services. In addition to the fact that the organization has considerable experience in the credit card services industry, its consistent efforts to expand this segment of this business indicates that the organization is both comfortable and competent in this particular area of the banking/financial services industry.

Value Creating Activities

Based on information from both the banking/financial services industry and Bank of America, it seems feasible to argue that there are a number of value creating activities that could be further developed by the organization. Specifically, given the significant permeation of the organization into the operation of branch banks, Bank of America should be able to significantly increase and improve the overall level of customer service that is provided by many banks. Overall, this issue could be a significant competitive advantage for the organization to improve over its competition. At the present time, the banking/financial services industry is moving away from personal customer service in an effort to increase efficiency and reduce costs. Although this move has enabled organizations to cut costs, the end result has been powerful customer dissatisfaction with the overall level of service being provided (Khirallah, 2002).

While the Bank of America is in a current plot to improve the overall level of customer service that occurs in this industry, there are other areas in which the organization could see notable improvements. Specifically, online banking has become a considerable vow for organizational development in the banking/financial services industry. At the present time, Bank of America does offer online banking services, however these services are often not competitive with what other companies in the same field are offering (Kandra, 2006). This coupled with recent security problems that have occurred with respect to breaches in a customer account information from Bank of America, makes the online banking niche and area in which the organization could significantly improve its overall performance. The popularity of online banking would enable the organization to reap the benefits of this market for years to advance. Bank of America dates to consider the specific strategies that he could exercise to improve the efficiency of online banking services.

Lawsuits Faced by the Organization

Examining the current litigation that is facing the organization, researchers have celebrated that Bank of America as well as a several of its competitors are currently facing a class action lawsuit based on violations of antitrust laws. Overall, the suit argues that financial institutions have engaged in “collusive practices of their setting, by horizontal agreement, credit card interchange fees at super competitive levels” (Taking it…, 2005, p. 8). Although the financial institutions continue to dismiss the allegations, arguing that their practices following antitrust laws established by the federal government, researchers examining this issue have noted that even a settlement in this case could cost banks more than $100 billion. Thus, it is possible that Bank of America could suffer critical financial losses if the outcome of this lawsuit favors consumers.

Other litigation faced by Bank of America includes a case brought against the organization by Miami businessman Joe Lopez. According to Lopez $90,000 was illegally wired from his Bank of America account to an offshore account in Latvia. Bank of America argues that it is not responsible for this fraudulent transaction because the company’s security system was not breached. Rather, Lopez had acquired a virus which tracked keystroke logging on his computer. This enabled hackers to acquire Lopez’s account information to complete the erroneous wired transfer. Although experts examining the case have argued that Bank of America has a certain good ground for dismissing the charges, there is some concern that the unwillingness of the organization to address this issue will ultimately have a negative impact on the organization. Specifically, experts argue that they are concerned with how the outcome of this case will affect the reputation of the organization in the context of increased competition about online financial services organizations (Sraeel, 2005).

Marketing Program Analysis

Efficiency-Enhancing Practices

Bills (2004) and his overall assessment of the efficiency enhancing practices that have been adopted by Bank of America argues that the implementation of Six Sigma will have the most significant impact on the overall development of this organization. Through the application of Six Sigma Bank of America has been able to offer customers a later posting time for deposits. In most cases, banks must receive a deposit before 2 p.m. on the date of business in order for it to post to the customer’s story on the same day. However, thanks to the application of Six Sigma techniques, Bank of America has been able to afford customers the opportunity to post deposits to their account later in the day, in some cases as late as 5 p.m.

Quality-Enhancing Practices

Considering the specific practices that have been utilized by the Bank of America to increase the overall quality of the products and services provided by the organization, Garritano (2006) notes that Bank of America has begun offering incentives for employees of the organization to deliver quality loan packages to customers. Given the increase in the number of high risk loans being offered in the wake of low interest rates, the Bank of America felt that it had an obligation to provide quality loans for a customers. As such, employees in the organization are now being encouraged to lisp quality gross packages for all customers. The organization believes that this measure will enhance overall customer satisfaction and improve the reputation of the organization.

Innovation Enhancing Practices

Bank of America has a long and rich history of innovation in the banking/financial services industry. Researchers examining the innovation of the organization note that this history continues as the industry continues to evolve. Thomke (2003) notes that, “As the twenty-first century dawned, Bank of America…faced a fresh challenge: With the opportunities for further acquisitions narrowing, it would need to find ways to grow organically, to expand its existing business by attracting more customers and fulfilling a greater share of their banking needs” (p. 70). In order to meet these needs, Bank of America has spent the last three decades it evolved into service development program modeled after the traditional product development programs utilized in manufacturing organizations. A goal of this program has been to develop a definitive pathway for the expansion of products and services that can be offered to customers. Although the organization is still working to perfect this process, the information that has been garnered through research and development has enabled the organization to significantly expand its customer base.

Customer Responsiveness-Enhancing Practices

Among the most notable steps that Bank of America has taken in recent years to increase customer responsiveness has been the development of online banking services. In addition to offering customers the ability to manage their accounts online, Bank of America also offers a wide range of services that enable the customer to meet all of their financial needs with the click of a button. Customers can access information about investing, loans and commercial banking services in the comfort of their own home (Trombly,2000). As the growth of Internet banking increases, it is reasonable to assume that Bank of America will begin to operate even more of its services online. Bank of America has been conscientious about its efforts to improve online banking services and security for all of its customers. Given that stiff competition in this area is a critical issue for the overall success of Bank of America customer access to online information will only increase.

Marketing Program

As noted above (see page 15 and 16) Bank of America offers a wide range of products for consumers. These include: consumer products, asset management, card and payment services, small-business services, Internet and e-commerce services, investment banking, and commercial banking services. By diversifying the products and services offered, Bank of America has been able to attract and retain a larger customer base and that many of its competitors. Thus, it is not surprising to win that Bank of America continues to research and do new products and services for its clients.

Unfortunately, it is difficult to assess the specific context of prices that Bank of America charges for its services. This is due to the fact that the costs charged to by most banks are different in each state and each region. This has to do with differences in employment and taxes that are inherent to the individual environments in which bank branches operate. However, there is one specific factor that can be utilized as a means to compare the specific products and services offered by this organization: prime rate. Although prime rate is heavily influenced by the federal government’s actions with respect to increasing or decreasing the Federal Fund’s rate, banks are able to set their prime rate at a level that enables them to remain both competitive and profitable. According to the organization’s website, the current prime rate offered by Bank of America is 7.50 percent (Prime rate, 2006). When compared to other organizations in this financial services industry, it is evident that this prime rate is competitive overall. Although some organizations, such as Wells Fargo are offering private interest rates which are approximately 0.25 percent below Bank of America, many organizations are offering prime rates that are significantly above this level. Thus, Bank of America appears to be utilizing a low-cost pricing strategy that will enable the organization to remain competitive.

Promotions of the Organization

In 2004, Bank of America launched a “Go for the Green” promotion to increase brand awareness of the organization using a golf related theme. Researchers note that this promotion had three specific goals: proactively retain selected Bank of American credit card customers by thanking them for their business; generate excitement by using the golf sweeps theme; and solicit feedback by using a customer ogle on the sweeps entry form and online” (Idea bank, 2004, p. 6). Although the research demonstrates that Bank of America had considerable success with its online survey, the overall cost of mailing out to the three-dimensional golf all boxes that included the promotional information was quite expensive overall.

At the present time, Bank of America is engaged in a sweepstakes promotion with Alaska Airlines. Every time an individual makes a remove with his or her Alaska Airlines Visa card, he or she is entered into the “Win Big” sweepstakes. The big prize is a fortnight luxury vacation at the Wynn Las Vegas Hotel (Alaska Airlines…, 2006). A sweepstakes runs from now until the first of April. This promotion appears to be aimed at raising brand awareness for Bank of America as the principal issuer of Visa cards. Thus the organization has been able to effectively capitalize on its history at reputation.

Places and Paths

Overall, the places and perhaps utilized by Bank of America appear to follow a distinct pathway that enables the organization to effectively exercise brand image as a well-known means for product development and market permeation. Given that the geographical position of the Bank of America continues to decrease—as the company acquires new banks in various parts of the country—the organization has had little option when it comes to the specific methods that it will employ for the development of the organization. Visa is among the most widely recognized names in the financial services industry. By linking its products and promotions to Visa, Bank of America may be able to attract customers based on strong brand recognition.

Marketing Strategies and Their Advantages

Foust (2003) in his assessment of the marketing strategies utilized by Bank of America notes that the organization places a considerable amount of it market efforts into providing existing customers with new products and services. In particular, this author notes that, “A decade of cost-cutting and the introduction of electronic banking lowered the cost of servicing retail customers. And BofA now sees far more potential to sell those customers loans, credit cards, and a host of other financial services, including investment products” (p. 41). What this effectively suggests is that Bank of America had developed its marketing strategies based on selling new products and services to its existing customers. Clearly, this method of marketing has its benefits as it provides the organization with a focused customer base for its marketing efforts. Further, using data mined from the organization, Bank of America will be able to segment its customer spoiled and provide targeted offers to its customers.

In addition, Hibbard (2004) notes that when Bank of America gets inquiries from new customers, it not only offers them the services for which they are looking; the organization also puts together a complete package of financial services for the customer. This process, which is known as cross-selling has been one of the most reliable strategies for banks to permeate the new customer market. Companies such as Bank of America that offer cross-selling products are looking to acquire customer loyalty. By placing most of the customer’s financial resources in the hands of the bank, the organization will be able to ensure that when future financial needs arise, the customer will have an established relationship with the organization, making it the first choice for unique business.

Technology Based Strategies

Industry Dominant Product Technology

As noted earlier Bank of America is well known as one of the leaders in developing new technology for this industry. Many of the technologies developed by the bank in the 1940s are still in use today—i.e. modern centralized bank operations, automatic check processing, account numbers, and Magnetic Ink Character Recognition (MICR). Further the application of Six Sigma to the organization has made it possible for Bank of America to increase the overall efficiency of its technology such that customers can now deposit checks later in the day and still have access to the funds on the same day. This improvement will push other financial institutions to move in the same direction.

Importance of Technical Standards

Examining the overall importance of technical standards in the banking/financial services industry, it seems reasonable to argue that technical standards are a necessity for organizational development. Attacks on banking institutions represent some of the oldest and notable crimes. From branch holdups to the fresh computer technology that is being utilized to breach online banking transactions, security in the banking industry remains a pervasive and prominent concern. Therefore, it only stands to reason that organizations that chose not to address these issues will be unable to effectively compete in this industry. Further, the current implementation of Six Sigma at Bank of America demonstrates that technological innovation can also be utilized to increase the overall profitability and efficiency of the organization. These issues are also critical for the overall success of the banking/financial services institution. Reduction of internal costs and increasing the efficiency of the organization will become even more important as competition in this industry intensifies.

Customer Technology Adoption Profile

Considering the specific technological implements that Bank of America has adopted in an misfortune to improve customer relations in the organization, researchers impress that CRM or customer relations management systems have been instituted in the organization. Songini (2001) reports that while most banks have chosen to implement CRM systems, Bank of America was among the first to realize the inherent problems of system implementation. “For a very large organization to raze up with one single solution that solves everybody’s problems and challenges is difficult to impossible to find” (p. 12). In response to this command, Bank of America has selected to effect a multidimensional CRM system that integrates a number of smaller software packages into a larger CRM system. The goal is to ensure that Bank of America is effectively utilizing customer data so that it can promote and market its products in an efficient manner. Thus, the CRM system will not only allow the organization to provide better customer service, it will also provide the organization with the information that it needs to acquire products and promotions that are fascinating to customers.

Dominant Technologies

Arguably, there are a number of necessary technologies that are utilized in the banking/financial services industry. Overall, information-technology systems appear to be the most critical for the effective development of the organization. Information-technology systems affect every level of the organization of the customer up to the executives. Information-technology systems enable the organization to effectively carry out online banking and real-time processing operations. With respect to Bank of America it seems reasonable to argue that the organization is currently at the top of the S-curve. Information technology and innovation have been a consistent part of the culture in the organization. As such, Bank of America will continue to develop and utilize the best and most effective information technologies.

Intellectual Property

Given the extent of technological innovation that has taken place at Bank of America, it is not surprising to find that the organization has had problems protecting intellectual property rights. One author notes that in 2002, Bank of America initiated suit against 54 were employees that left the organization for UBS Warburg. According to the suit filed by the organization the individuals that left took with them intellectual property and proprietary business strategies that are now being employed at UBS Warburg. Researchers note that as the banking/financial services industry becomes more competitive suits such as these are becoming more common (New way…, 2002).

E-Commerce Activities

Bank of America, like many other financial institutions has taken an aggressive approach to the development of e-commerce. In addition to offering a wide range of online bank services, the organization is now offering to create online storefronts for organizations wishing to conduct business over the Internet. The purpose of this new program is to offer small and midsize businesses the opportunity to take advantage of Internet commerce. Specifically, Bank of America will offer e-commerce organizations a wide range of products and services such as merchant services, which are essential for business development (Collett, 1999).

GE McKinsey Matrix and Analysis of Strategic Business Units

Industry attractiveness issues that can be rated in the GE/McKinsey Matrix include: industry profitability, industry rivalry, and segmentation. Business unit strength factors include: strengths assets and competencies, customer loyalty and a represent of technological innovation. Based on the information that would be placed in the GE McKinsey matrix, it is evident that Bank of America is a strong company in a strong industry. For this reason, a recommendation to grow the organization could be made in this case.

BCG Matrix and Analysis

Utilizing the BCG matrix as a means to examine the overall operations of Bank of America, the following designations can be made:

Cash Cow – Cash cows refer to specific areas of the market that have been well developed. In the case of Bank of America, the Cash Cow appears to be the consumer products division.

Star – Star refers to emerging business changes that generate cash, but still require investment. The online banking and ecommerce services offered by Bank of America clearly fall into this category.

Question Mark or Problem Child – Question marks refer to those aspects of business that are growing, but are questionable. Consumer investments could be included in this category as many financial organizations have found that while more individual customers are investing, it is difficult to remove this business.

Dog – The dog refers to an industry that has small market allotment in a mature industry. For the Bank of America Small Business operations appear to fall in this category. The organization does not carry a significant market share in this industry.

Global Strategy

Global Value Creation

Research on the global value creation that has been developed by Bank of America by the organization clearly suggests that Bank of America has made a firm commitment to the development of communities in the global cities in which it operates. In particular, the company has developed into four global market segments. These include:

Global Consumer and Tiny Business Banking – This segment “segment provides a diversified range of products and services to individuals and small businesses through multiple delivery channels. It offers deposit products, including savings accounts, money market savings accounts, certificate of deposits and IRAs, regular and interest checking accounts, and various business checking options” (Company snapshot, 2006).

Global Business and Financial Services – This segment, “primarily provides treasury services, middle market banking, commercial real estate banking, leasing, business capital, and dealer financial services to middle-market companies” (Company snapshot, 2006).

Global Capital Markets and Investment Banking – This segment “provides capital-raising solutions, advisory services, derivatives capabilities, equity and debt sales, and trading for the company’s clients, as well as traditional bank deposit and loan products, treasury management, and payment services to large corporations and institutional clients” (Bank of America, 2006).

Global Wealth and Investment Management – This segment “offers investment, fiduciary, and banking and credit solutions; asset management services to institutional clients, high-net-worth individuals, and retail customers; investment securities and financial planning services to affluent and high-net-worth individuals; and retail clearing services for broker/dealers” (Company snapshot, 2006).

All of these services have been developed as a means to enable the organization to provide services in the global community. By entering through these specific channels, Bank of America is seeking to build not only the financial strength of the organization but also the foundations of the communities in which the organization operates.

Global Strategies

Considering the global strategies that Bank of America has musty in its global development, researchers have famed that Bank of America has undertaken a number of strategies to improve its global presence. In particular, Barovick (2005) observes that the organization has adopted two specific strategies: “One is its leading role in export working capital lending, the other its Web-based assist for the global supply chain” (p. 53). In an worry to grow its small business segment and global market, Bank of America has “combined its focus on export-import services with its large nationwide small business-lending network” (p. 53). Through this process, the organization has been able to link more organizations to the global economy. As the leading financier for these operations, Bank of America is able to garner entrance into foreign countries when its little business partners achieve this same goal.

In addition to the export programs offered by the organization, Bank of America has also worked to establish Web-based assist for its global supply chain. Specifically, “The system integrates customers’ initial procurement operations with the reconciliation of financial and transport documents, and then completes the payment or collection procedure” (p. 53). Customers wishing to use the system must be granted approval from Bank of America. However, this universal access to information will enable organizations in the supply chain to better manage their overall operations.

Major Foreign Markets and Entry Modes

In unusual months, Bank of America has taken the steps necessary for the organization to enter the Chinese banking industry. China, which is home to the fastest banking market is a viable choice for Bank America’s global expansion. In order to establish its position in China, Bank of America has taken a strategic place in China Construction Bank (CCB), one of the four largest banks in the country. CCB is the first Chinese bank to garner foreign investment. Experts note that while many US companies are interested in investment, the volatility of the banking sector in China made this move tenuous. Market entry through investment will be a definite means for Bank of America to acquire a larger stake in the global banking industry (Foreign fillip, 2005).

Governance Mechanisms to Align Shareholders

Information from the Bank of America website seems to suggest that the specific methods being employed by the organization to ensure compliance in global governance are focused on the development of the free economy as a means to create sustainable development in the international community. As notorious by the company’s CEO, Ken Lewis (2005) “The lesson of the last century was that free markets generate economic growth. The lesson of this century will have more to do with the integration of free markets, which is creating new economic opportunities in developing nations around the world, and driving the growth of the global economy from which we all benefit” (Remarks to…). By keeping the organization at its operations focused on the development of the free market, Lewis provides a salient point upon which to orient operations and shareholders.

Ethical Implications of Recent Major Strategic Decision

In an effort to improve problems with its reputation—i.e. in light of the Enron and Social Security scandals—Bank of America has recently developed a company-wide ethics policy that will provide employees in the organization with the resources that they need to blow the whistle in case of breaches in ethical conduct. Boraks (2004) notes that this recommitment to ethics by the organization has already reduced improper mutual fund trading by providing stronger protections for employees that want to report wrongdoing.

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The History Of Bank Of America Photo

The History Of Bank Of America Photo

The History Of Bank Of America Picture

The History Of Bank Of America Photo

The History Of Bank Of America Picture

The History Of Bank Of America Photo