September 15, 2011
Dr. Annette Williams
Developmental Analysis The choice to invest in a company can only be determined through research and analysis. The company of interest may be an asset for certain areas, but become a major drawback for the business in general. My job as a mutual fund manager is to insure that both of these tasks are completed and summarized, so that the best decision for an investment can be made. After reviewing each company listed, the decision has been made and seemingly; the best possible choice would have to be the Bank of America. This company not only posses the economic structure needed to secure an investment for a smaller business, but the economic gain a company needs to maintain. Given below are the major analysis taken and research acquired in formatting this decision. After reading the information, the choice should be as equally apparent. Bank of America is one of the largest leading companies in the world. This Fortune 500 Company is the largest and most dually noted bank-holding company in the United States; it also has a very high percentage with the Fortune Global 500. This company was the obvious choice for so many reasons, one of them being the corporation’s impeccable global history. The Bank of America was founded by an Italian immigrant named, Amadeo Giannini, who originally named company: the Bank of Italy. In the early 1900’s through a slew of great investing merges done by the founder insured the bank’s unprecedented beginnings and the current developments more than far exceeds the name. Since the renaming of the bank in 1929, the number of U.S as well as global ventures has been innumerable to say the least. The company had its first major expansion in 1953 and has continued to grow since then. Bank of America holds the largest market share in the U.S. and has an extensively large customer base. The beginning of the research towards this decision was contrasted through a SWOT analysis.
SWOT Analysis The SWOT analysis started with the company’s strengths. Large market share is one of the greatest strengths the company possesses. With all of the foreign global success in America,
BAC is the largest U.S.-based, financial- holding company. BAC also contains a high U.S. presence, strong customer base, and large deposit holdings. (Lalani) BAC has also made strategic marketing to progress in the overall “clean-up” of the company. BAC has agreed to sell half of its China construction bank stake to raise capital. (Lalani) BAC is also taking the high road and cutting over 3,500 jobs to help cut down the company’s cost in the current quarter. Thousands of more positions could be lost due to this reconstruction move. However; legal expenses greatly affect the BAC’s net cost. This particular weakness in the company’s profit is brought on by a number of different litigation problems; which pushes the company’s expenses to a highly dangerous percent. For this same reason the company’s earnings could be drained for the next several years, causing the large corporation to lose a very vital amount of funding. Moreover; because of BAC’s large U.S. and global market share and incredibly strong customer base, it is. the cushion that will keep this company afloat. When the economy rises it is predicted that BAC will far exceed its peers. This is an opportunity for investors to reach a capital gain for their individual companies. With large mortgage and insurance companies setting to file several different suits on the company, BAC faces threats of mortgage put-back costs and regulatory costs. The over-all SWOT disclosure, still proved this