Key Strategies of Bank of America

Bank of America

A general approach adopted by Bank of America Corporation (BofA/BoA) calls for the organization to maximize profit margins and revenue growth through business models and intensive growth methods that coordinate with cost savings. The business model of the corporation, which incorporates internet banking as a means of preserving competitiveness through technological advancement, is the foundation for these corporate strategies. The generic strategy must support Bank of America’s objectives for creating and bolstering its competitive advantages, according to Michael E. Porter’s model. Intensive growth strategies, on the other hand, must be in line with the long-term growth and related strategic goals of the financial services industry, taking into account market circumstances involving other companies with strong competitive positions, such as JPMorgan Chase, Citigroup, and Wells Fargo. The organizational framework or design for carrying out business strategies and producing value for Bank of America and its clients is established by the business model. With its strategic position as one of the largest financial services companies, the business and its enterprise architecture serve as an example of successful organizational development for competitive advantage through organizational design that incorporates the proper blend of generic strategy and intensive growth strategies.

Although there are some differences in how these strategies are implemented, Bank of America and its subsidiaries Merrill (formerly Merrill Lynch), BofA Securities (formerly Bank of America Merrill Lynch), and Bank of America Private Bank (formerly U.S. Trust) all use the same general competitive strategy and intensive growth strategies. The corporation places a strong emphasis on maintaining its financial goods and services as some of the market’s most competitive.

Business Model and Design of Bank of America

Commercial banking, investment banking, wealth management, and insurance services are all offered by Bank of America. Given these financial services, the company’s business strategy centers on the delivery of financial system products to a customer that includes both individuals and organizations, like other firms. The following business models are a part of Bank of America’s organizational structure:

• Pipeline business model
• Financial services’ “bricks-and-clicks” (or “click-and-mortar”) business model

Business-pipeline model: As a pipeline company, Bank of America receives inputs, adds value to them, and then gives target customers the finished product. For instance, inputs can be client data as well as financial resources and related services. Through information analysis, knowledgeable judgment, and the provision of supplemental services to target clients, Bank of America adds value to these inputs. The company’s competitive advantages are often used in a succession of operations that generate or produce valuable financial goods as part of the pipeline business model. The general strategy and intensive growth methods employed by Bank of America guarantee operational effectiveness while utilizing competitive advantages to provide target consumers with value. Through this pipeline system, consumers can access financial resources thanks to the company’s plans, which are assured to be efficient and maximize value.

Click-and-Mortar Business Model: The click-and-mortar business model is used by Bank of America in both its online and offline operations. For instance, users can obtain financial services online through the business’ website and mobile banking applications. These models also take into account Bank of America’s general strategy and intense expansion initiatives. The company’s competitive advantages are bolstered by online operations based on these tactics. With the use of online options, this business strategy improves Bank of America’s efficiency while also making consumers’ lives more convenient. By enhancing operating speed and efficiency, the incorporation of cutting-edge information technologies through this business model supports the company’s overarching strategy and raises overall consumer satisfaction with its financial services. In this way, this element of the business plan contributes to Bank of America’s attainment of its corporate purpose and vision statements.

Business models and the operations and strategies of Bank of America

The pipeline and click-and-mortar business models work together to support Bank of America’s value chain and its utilization of the VRIO/VRIN core competencies to deliver beneficial services to target customers. In order to reach every consumer, for instance, the company employs its pipeline framework as a vast network, and to increase the value of this network, it also provides supplementary online banking services. The application of these models for maximizing profits and upholding a dominant market position is defined by Bank of America’s general strategy, intensive growth tactics, and related competitive advantages. Strategic plans for the banking company identify potential growth prospects within the framework of these business models. These business models have an impact on the organization and implementation of Bank of America’s operations management, together with the cost leadership generic strategy and intensive growth strategies. The demands of these models for human resource support for banking services, for instance, serve as the foundation for operations management for human resource development. Furthermore, the pipeline business model and the click-and-mortar business model are both directly reflected in the organizational structure of Bank of America Corporation. In order to make sure that these models produce a competitive advantage and value for both clients and the financial services industry, every position and group in the organizational structure is utilized.

Strategy for competitive advantage

Cost leadership is Bank of America’s primary generic strategy, according to Michael E. Porter’s competitive strategy model. Aiming for low costs when providing financial services is part of cost leadership. Additionally, as a result, the banking organization maximizes its profits. Bank of America can optimize its service prices with the use of this general strategy in order to draw in and keep clients. According to Bank of America’s SWOT analysis, organizational scale, a byproduct of the generic cost leadership strategy, is related to the company’s competitive advantages. The generic strategy’s cost efficiencies strengthen the company’s competitive advantages in commercial banking, investment banking, and wealth management even though it isn’t always the lowest-cost provider. Other generic strategies, including as differentiation and focus strategies, can be seen in some ways in Bank of America’s operations. For instance, Bank of America Private Bank, a subsidiary, stresses superior services as a competitive advantage.

Intensive Growth Strategies of Bank of America

Market penetration is Bank of America’s primary intensive growth strategy, according to the Igor Ansoff Matrix. With this expansion plan, the corporation hopes to expand its current markets’ sales of financial services. Market penetration has played a significant role in Bank of America’s expansion, helping it achieve its current competitive position as one of the biggest banks in the world. However, the firm also employs additional high-impact growth tactics, such as market and product development, to guarantee the financial services sector’s competitive expansion. For instance, product development is used to capitalize on new revenue streams while providing current customers with new financial products. In contrast, diversity is not a particularly important growth strategy for Bank of America. The business depends more on market penetration than it does on expanding outside of the financial services sector. The market penetration expansion plan of Bank of America Corporation is supported by the cost leadership generic strategy. For instance, the generic cost leadership plan guarantees the financial services of the company’s competitive advantage and attractiveness, resulting in the success of the corporation’s primary intensive growth strategies.

Implications of the Business Model and the Generic and Intensive Growth Strategies of Bank of America

The business model and strategy of Bank of America Corporation interact. The intense growth plans and generic strategies that will best maximize the competitive advantages of the banking industry are determined by the business model. The results of these strategies inform judgments about how the business model of Bank of America will change. Additionally, the pipeline business model, the cost leadership generic strategy, and the market penetration-heavy growth strategies must be maintained due to the types and characteristics of the company’s financial services. The organizational culture of Bank of America Corporation is impacted by the selection of intensive strategies and corresponding business plans, which in turn affects the availability of human resources required for the successful implementation of strategies and the success of the company’s business mode.