Essay on Bank of America Five Force Analysis

Words: 885
Pages: 4

Bank of America

Five Forces Analysis
Threat of new entrance
The sector offers a considerable barrier to new entrants due to the high capital required to establish a new bank. As banking is professional services type required high creditability, strong brand presence is the key obstacle for newcomers.
However, in line of Global consumer & small business banking especially payment service the entrepreneur or new company could compete in this segments e.g. internet bill payment. Additionally, the trend of other company offers other financial services like insurance company starts offering mortgage and loan services, etc. Importantly, most of these financial and payment services is good source of fee-based revenue.
Power of
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Economic (E)
Economic condition affect how easy or difficult it is to be successful and profitable at any time because it is directly related to capital availability, cost and demand.
Additionally, economics factors effects the purchasing power of potential individual customers and corporate clients in terms of the firm’s cost of capital. Moreover, the level of government spending can increase or decrease money supply and stability of capital market.
Socio-cultural (S)
The social culture environment encapsulate demand and tastes, which vary with fashion and disposable income, and general changes, can again provide both opportunities and threats for particular bank. Especially, income distribution in different countries effect strategic direction and implementation issues.
Technological (T)
Technology has played an important role currently. Transactional websites or online banking-internet is both major opportunity and challenge to the banking industry. Also, time to market is the key in the world of financial markets or money matters in every single minutes, this will be a definitely competitive advantage.
Environmental (E)
There is a growing trend of environmental friendly and global warming issues. Bank of America maintains environmental policies and commitments. We could clearly see in retail business, BoA offer customers a variety of environmentally beneficial products and services such as