Strategic Management and the effects of Globalization

Globalization has led to the creation of a balanced strategic approach in serving the biggest institutional investors across the world who manage investments and savings through retirement and pension funds. Factually, the financial crisis made the bank to slim down its global workings to focus on customers who want to raise funds and investors who are want best investment opportunities. This strategic approach focuses at decreasing the market volatility and producing income from a large range of investment portfolios according to Bank of America. Technological changes have led the bank to focus on agile and adaptive organic growth strategies. The strategy includes the Global Transaction Services that ensures seamless and virtual transactions and movement of money across the world. The partnership with Cisco, Yoobi, and WeWork reduces earnings volatility by enabling effective management of risks relating to multiple currency transactions (Bank of America Corporation, 2016).

Application Industrial Organization and Resource-Based Model

The modified industrial organization model is applied to show how a firm can obtain higher returns based on five industrial or market forces. Such forces include new entrants, powerful suppliers, substitutes, powerful buyers, and rivals (Barney, 2011). Threats of new entrants in the USA banking sector is low due to strict regulations and established economies of scale of larger players like Bank of America. There exists a number of large banks in the USA banking sector which offer substitute financial services. This makes the sector to be characterized by intense competition and high rivalry among banks. Customers have high purchasing power due to a significant number of substitute banking institutions. Therefore, to obtain high returns in the industry, Bank of America needs to focus on its unique resources, capabilities, and substantial economies of scale. In this case, the bank emphasizes on its workforce through offering training and career development opportunities and promoting inclusiveness, and diversity management (Bank of America, 2013).

According to the resource-based model, an organization has specific unique capabilities and resources that make it competitive and successful in the market. Bank of America has an effective Global Research Team whose capabilities drives the entire firm, offers valuable insights to all market businesses, wealth managements, and corporate banking (Bank of America Corporation, 2016).The rent-generating capacity of these capabilities and resources gives the bank the ability to develop a sustainable and profitable position in the market (Theriou, Aggelidis, & Theriou, 2009).

Influence of Mission and Vision on Overall Success of the Bank

The mission and vision of Bank of America offer a roadmap for achieving the strategic objectives. The mission is divided into three parts. First, the banks aim at serving ‘low and moderate income customers and families. Second, it aims at improving the underserved low and moderate individuals. Lastly, the bank aims at creating sustainable practices for long-term success (Bank of America, 2017). The vision of the Bank is described in its core values and principles of delivering improved value to customers, clients, and shareholders. The operating principles of the bank focus on the customer-driven business model which enables the company to serve the needs of customers in an efficient and seamless way (Bank of America, 2017).This mission, core values, and principles enables the success of Bank of America through simplifying and making the purpose of the enterprise to be clear and simple. They form the basis of designing strategies aimed at connecting employees, customers, and communities to achieve improved value to all stakeholders. They have also made the bank to focus on what matters like customer focus and creating a conducive working environment for employees. Besides, the mission and vision foster corporate social responsibility of the bank through observing common values aimed at addressing challenges facing the society. These include job training, education, hunger relief, and environment sustainability (Bank of America, 2013).

Impact of Stakeholders on Success of the Bank

The Board of Directors oversees the bank’s growth strategy which aims at delivering long-term value to shareholders. In addition, the board designs and implements the bank’s philanthropic investments to the community. In general, the board oversees the governance, risk management, and coordinates various management strategies designed to achieve long-term value for the firm (Bank of America, 2013). The bank creates a conducive environment which fosters the motivation of employees towards achieving the sustainable growth strategy. On the other hand, employees work extra hard to achieve their aspirations and goals. Individual achievement contributes greatly to the overall success of the bank. They offer quality banking services to the customers to improve their experience and remain loyalty to the company. The shareholders’ funds are utilized in profitable investments which generate belong term valuable returns to all stakeholders. The managers are concerned with designing responsible growth strategies aimed at growing revenue, managing risks, reducing expenses, and continuous investment in the banks’ capabilities and employees (Bank of America Corporation, 2016). Clients and customers offer satisfaction ranking of various products and services offered by the bank. The information is used to improve the services offered and introduce new ones that satisfy the needs of customers.

References

Bank of America. (2013). Corporate Social Responsibility at Bank of America. Charlotte: Bank of America Corporation.

Bank of America. (2017). Our Values: We deliver for customers, clients, communities and shareholders. Retrieved from http://about.bankofamerica.com: http://about.bankofamerica.com/en-us/our-story/our-values.html#fbid=WVqn9mn4laX

Bank of America Corporation. (2016). 2016 Annual Report. Charlotte: Bank of America Corporation.

Barney, J. (2011). Gaining and sustaining competitive advantage (4th ed.). New Jersey: Pearson.

Theriou, N., Aggelidis, V., & Theriou, G. (2009). A Theoretical Framework Contrasting the Resource-Based Perspective and the Knowledge-Based View. European Research Studies, XII(3), 1-14.