Bank of America Case Study Patricia DeFosse Nick Imprescia Felix Siloniz

Industry:  NAICS: Commercial Banking.  Engaged in accepting demand and other deposits and making commercial, industrial, and consumer loans.  Products: Depository Services, Real estate loans, Loans to individuals, Commercial loans.  Activities: Receiving deposits from customers and issuing consumer, commercial, and industrial loans.

The Market:  Commercial banks= 80% of industry revenue.  Savings banks= 15%  Credit unions= 5%  $3.75 trillion annually.  Serve individual consumers, small businesses and large corporations.  Ranges from banking, investing, asset management and other financial products and services.  Drives of demand: Business loans.

Industry Growth Rate in U.S

Competitors:  Citigroup Inc.  JPMorgan Chase & Company.  Wells Fargo

Industry Trends:  Experienced several ups and downs up to 2011 but will recover over the next 5 years.  Banks endured massive loan losses as a result of the credit crisis.  Customers’ wealth has been increasing and there has been a trend in the direction of investment.  Increasing trend towards internet banking in this industry.

Company History:  Founded in 1904 by Amadeo Peter Giannini and his son in San Francisco, California.  Originally called “Bank of Italy”  Renamed in 1998 when BankAmerica bought it  Leading commercial bank.  Listed as the third largest corporation in the globe  Bank to almost 59 million people in the United States  19,000 ATMs  6,100 retail banking offices.

Company Overview:

SWOT Analysis:  Strengths:  Leading market position in the US.  Online and mobile banking capabilities.  Serves one in two households in the U.S. and operate in more than 40 countries.  Weaknesses:  Only 10% of sales generated internationally.  Criticized by customers for raising interest rates.  Mismanagement of Federal Bailout and management dilemmas.  Opportunities:  Increase market share through product development  Increase clients base.  Additional consolidation.  Threats:  Growth depends on the economic vitality of communities worldwide.  Competitors in the industry such as JP Morgan Chase, Citigroup, and Wells Fargo.  Regulations and policies.

Key Issue:  Needed new revenue source.  $5 a month for debit card usage.  Customers became unhappy.  “For a lot of consumers, this was the last straw, banks have been making a lot of changes to accounts, adding fees and raising the minimum balance needed, and consumers were clear that they objected to one more fee.” (Jean Ann Fox)  Got rid of the $5 a month charge for debit cards.  Build its relationship back up with its customers.

Bank of America Case Study