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Bank of America
Wassim Zhani
Dr David Robinson
Bank of America 2
Bank of America
Operating Income -- -- --
Nonoperating Income -- -- --
Bank of America 3
Nonoperating Expenses -- -- --
Discontinued Operations -- -- --
Demographic Forces
Demographics factors are hard to predict. Age is one of the factors that can be predicted
easily. This factor of age affects various aspects at the operation of Bank of America such as
interest rate, economic growth, asset prices, housing, inflation and government spending. The
estimates of age of the population show that the emerging market of the bank would have young
and growing population. Moreover, the aging of the baby boomers would force Bank of America
to reconsider the rate of interest. As they would be aging and would get closer to their retirement
ages they would need more loans so they will be facing more difficulties in paying back the loan.
As well as the emerging market of young population would need loans for house as they move
ahead in their lives to settle down so they have to consider the interest rate for them as well
(James & Bessie, 1954).
Task Environment
The task environment includes distributors, suppliers, competitors, customers etc.
Competitors
The main competitors of the Bank of America are Citigroup, Inc., JPMorgan Chase &
Co. and Wells Fargo & Company.
Cap. Market Cap: 101.33 billion 112.09 billion 158.87 billion 143.76 billion N/A
Employees: 288 000 260 000 242 929 270 200 N/A
Revenue (ttm): 82.68 billion 61.18 billion 89.45 billion 71.35 billion N/A
(ttm):
Operating Margin
15.29% 19.80% 39.01% 33.91% 0.00%
(ttm):
Net Income (ttm): -4.46 Bn 9.30 billion 17.93 billion 12.83 billion N/A
PEG (5 yr
-7.18 0.60 0.93 0.77 N/A
expected)
C = Citigroup, Inc..
Suppliers
There are many product and service suppliers in the banking industry. For instance, there
are a number of capital suppliers and these suppliers do not possess a strong bargaining power. It
is important to note that in the banking industry specialized, knowledgeable and talented staff is
required. Bank of America possesses the strength of competent employees. For Bank of America
the main supplier is Federal Reserve.
With the latest and further advancements in the features of mobile phones Bank of America
should keep update their features and services otherwise their competitors would take advantage
of this technology.
As far as political impacts are concerned the current position of economic downfalls and
government interventions are not showing positive signs. The interventions of the government
aided in easing the matters but still the mistrust that is going on among various financial
institutions is present to a greater extent. On the basis of these conditions it can be said that it
would take almost two to three quarters to get the things back to the normality. So, CDO and the
exposure to sub-prime factors are very challenging for the Bank of America when it comes to
asset write offs and charges.
Bank of America 6
References