November 7, 2012
Bank of America Business Analysis Part III
The purpose of this paper is to finalize my examination of Bank of America’s position within a marketplace in which is should dominate and come to a consensus of whether investing in this company will provide reasonable returns and be an asset to my investment portfolio. I’ve conducted two previous analyses that included a SWOT analysis to examine how Bank of America is positioned externally and what are its internal advantages and opportunities. I then conducted a financial analysis to determine its financial health by looking at ratios, rates of returns, balance sheet, income statement and cash flow. Amongst this, it was also critical that I focus on the recent legal proceedings and outcomes as it has a direct impact and correlation to the value of the stock and the confidence consumers have in its image and products. The overall aim of this analysis is to ultimately determine if Bank of America is a sound investment and to be able to present to my clients the reason for my decision. It is important to maintain a sense of transparency to promote a sense of ethics and sound reasoning. This sort of ethical decision making will allow for further confidence and financial security of my firm and its employees. In order to make a final determination, there are a set of organizational characteristics that I will examine. Initially, I am going to look at how Bank of America has taken on strategic initiatives to adapt to the new market in which it exists. I will also research how recent economic trends are influencing Bank of America, the strategies the company is using for adapting to the changing market, tactics Bank of America plans to implement to achieve its strategic goals and the role that Human Resource Management plays in helping Bank of America achieve its strategic goals. All of this information will formulate a sound basis for making an important investment decision.
Bank of America’s Strategic Initiatives According to the Bank of America (2012) website, the company has undertaken a four tier approach to changing the way it does business in this new market. I will outline the four initiatives and examine how each of these subjects will ultimately lead to the company positioning itself in a better way given the last 4 years of turmoil that the company has faced.
Bank of America has had a variety of lending issues that include the subprime mortgage debacle that left many with foreclosed homes during times of high unemployment. According to the Bank of America (2012) site “Bank of America believes on of the strongest ways we can help address climate change is through our lending practices and Commercial Real Estate Banking services. Applying these resources as part of our business strategy can help stimulate environmentally sound, profitable innovation leading to economic growth, new job creation and new markets.” This is a great corporate statement put forth by the Public Relations department but doesn’t necessarily woo me as an investor. In nature, the statement is very vague and could even be misleading.
According to Bank of America (2012) website it states “We possess the resources, experience and capabilities to match our investments to the unique needs of each of our clients. Our focus includes strategic investments in businesses and technologies that address climate change, such as developing low-carbon technologies and alternative energy companies. We’ve invested, for example, in companies that can foster energy from the sun or from the rise and fall of ocean waves and convert that energy into electric power. We’re also creatively using investments to help preserve forest, which are central to the fight again global climate change.” As an investor and mutual fund manager, this is an inspiring vision of how Bank of America is invested in the future of global