Bank of America Strategic Management Plan

1、104 April 2011Bank of America Strategic Management PlanApril 17, 2014Shane TheriaultPierre-Oliver LachanceGarik TheriaultSierra Daigle204 April 2011OverviewCompany OverviewCompany HistoryExisting Strategies Existing Mission and VisionProposed Mission and VisionExternal AssessmentIndustry AnalysisOrg

2、anizational ChartDivisional AnalysisOpportunities and Threats EFE MatrixCPM MatrixInternal AssessmentOrganizational StructureStrengths and WeaknessesFinancial Condition IFE Matrix Strategy FormulationSWOT MatrixIE MatrixSpace MatrixGrand Strategy MatrixBCG MatrixMatrix AnalysisQSPM MatrixStrategy Se

3、lectionStrategyEPS/EBITProjected FinancialsForeseeable ProblemsEvaluationBalanced Score CardCompany Update304 April 2011Company History Bank of Italy 1904 Bank of Italy was founded in San Francisco by Amadeo Giannini for immigrants who were denied service at other banks 1906 San Francisco earthquake

4、 1922 Giannini established the Bank of America and Italy by buying Banca dellItalia Meridionale 1927 Giannini consolidated the 101 branches of the Bank of Italy with the 175 branches of the Liberty Bank of America to create the Bank of Italy National Trust & Savings Association 1928 He merged wi

5、th Bank of America, Los Angeles to become the largest banking institution in the US 1930 Bank of Italy was renamed BankAmerica Corp. with Gianni and Orra E. Monnette as co-chairs404 April 2011Company History Cont.BankAmerica Corp. 1953 Clayton Antitrust Act & Bank Holding Company Act forced the

6、separation of BoA and Transamerica Corporation, an insurance subsidiary 1953 Banking regulators also force out of state activities into a new company, First Interstate Bancorp, later acquired by Wells Fargo and Company in 1996. 1958 Creation of BankAmericard (Later to be names Visa) 1983 - Acquisiti

7、on of Seafirst Corporation of Seattle, Washington, and its wholly owned banking subsidiary, Seattle-First National Bank 1992 Acquired Security Pacific Corporation and its subsidiary Security Pacific National Bank in California and other banks in Arizona, Idaho, Oregon, and Washington which was the l

8、argest bank acquisition in history 1992 - BankAmerica expanded into Nevada by acquiring Valley Bank of Nevada 1994 - BankAmerica acquired the Continental Illinois National Bank and Trust Co. 1997 - BankAmerica acquired Robertson Stephens, a San Francisco-based investment bank specializing in high te

9、chnology504 April 2011Company History Cont.Bank of America 1998 - BankAmerica was acquired by NationsBank of Charlotte in what was the largest bank acquisition in history at that time. The merged bank took the better-known name of Bank of America 2004 - Bank of America announced it would purchase Bo

10、ston-based bank FleetBoston Financial 2005 - Bank of America announced it would purchase credit card giant MBNA 2006 - Bank of America and Banco Ita entered into an acquisition agreement through which Ita agreed to acquire BankBostons operations in Brazil 2006 - Bank of America announced the purchas

11、e of The United States Trust Company for $3.3 billion, from the Charles Schwab Corporation 2007 - Bank of America acquires LaSalle Bank Corporation from Netherlandss ABN AMRO Bank N.V. 2008 - Bank of America announced that it would buy Countrywide Financial for $4.1billion 2008 - Bank of America ann

12、ounced its intention to purchase Merrill Lynch & Co., Inc. who was within days of collapse604 April 2011Current Strategies Get Lean Increase Global Excess Liquidity Sources by $442 billion to $378 Reduced risk-weighted assets by $171 billion to $1.28 trillion “A Strong Company Begins with a Stro

13、ng Balance Sheet” “Focus on selling non-core assets, increasing capital ratios, building liquidity and reducing risk” Right the mortgage Crisis Risk “Our goal is to set a tone and create a risk management culture in which every employee is empowered to raise an issue or express a concern.” Become “c

14、ustomer focused” “be responsive to the needs of customers and clients providing the products and services they want, when, how and where they want them”704 April 2011Existing Vision and Mission StatementVision StatementOur vision is for Bank of America to be the Worlds finest financial services comp

15、any. We think that this is an appropriate and achievable goal. Mission statementWe built Bank of America to meet the full range of financial needs for people, businesses, and institutional investors; to attract the best employees to serve our customers and clients; to support the communities where w

16、e do business; and to create long-term value for our shareholders. Todays Bank of America is a financial services leader serving customers and clients worldwide. We help them to see and act on opportunities to achieve their goals by delivering value, convenience, expertise, and innovation.804 April

17、2011Proposed Vision StatementOur vision is for Bank of America to be the Worlds finest financial services company. 904 April 2011Proposed Mission statementWe built Bank of America to meet the full range of financial needs(2) for people, businesses, and institutional investors(1); to attract the best

18、 employees (9)to serve our customers and clients; to support the communities where we do business(8); and to create long-term value for our shareholders(5). Bank of America is a financial services leader serving customers and clients worldwide(3). We help them to see and act on opportunities to achi

19、eve their goals(6) by delivering value, convenience, expertise(7), and innovation(4).1.Customers2.Products or services3.Markets4.Technology5.Concern for survival, growth, and profitability6.Philosophy7.Self-concept8.Concern for public image9.Concern for employees1004 April 2011External Audit1104 Apr

20、il 2011Industry Analysis BankofAmericaCitigroupJPMorganChaseWellsFargo#ofemployees288K260K242K270K%operatingMargin15.2919.839.0133.91$NetIncome1,4469.30B17.93B12.83B$EPS.013.064.52.43#branches57009000#Sharesouts10.5B2.923.975.29B1204 April 2011Opportunities1. Smartphones will reach more than 2.5 bil

21、lion users by 20152. According to industry sources, mobile banking users worldwide will reach 530 million by 2013, up from just over 300 million in 20113. The US banks sector grew by 11.3% in 2010 to reach a value of $11,713.2 billion4. Projected increase of population in the United States of 82% fr

22、om 2005 to 20505. consolidation of the financial services sector provides potential for company acquisitions6. Expansion into the global market7. President Obama unveiled a stimulus plan totaling 447 Billion1304 April 2011Threats Mortgage rates hit record low: 30-year fixed nears 4% Stock price drop

23、ped over 50% since 2008 The number of bank failures increased from 25 in 2008 to 92 in 2011. The cost to businesses worldwide adds up to a staggering $221 billion each year. Consumer defaults on credit cards, mortgages, etc. The possibility of the Federal Reserve increasing interest rates. Dodd-Fran

24、k Act was signed into law on July could have significant impact on the US banking industry Potential for United States economic relapse1404 April 2011EFE MatrixExternal Factor Evaluation Matrix (EFE)OpportunitiesWeight Rating Weighted Score1.Smartphoneswillreachmorethan2.5billionusersby20150.0930.27

25、2.Accordingtoindustrysources,mobilebankingusersworldwidewillreach530millionby2013,upfromjustover300millionin20110.0730.213.TheUSbankssectorgrewby11.3%in2010toreachavalueof$11,713.2billion0.0740.284.ProjectedincreaseofpopulationintheUnitedStatesof82%from2005to20500.0540.205.consolidationofthefinancia

26、lservicessectorprovidespotentialforcompanyacqusitions0.0620.126.Expansionintotheglobalmarket0.0930.277.PresidentObamaunveiledastimulusplantotaling447Billion0.0630.18ThreatsWeight Rating Weighted Score1.Mortgagerateshitrecordlow:30-yearfixednears4%0.0930.272.Stockpricedropedover50%since20080.0720.143

27、.Thenumberofbankfailuresincreasedfrom25in2008to92in2011.0.0630.184.Thecosttobusinessesworldwideaddsuptoastaggering$221billioneachyear.0.0640.245.Consumerdefaultsoncreditcards,mortgages,etc.0.0520.106.ThepossibilityoftheFederalReserveincreasinginterestrates.0.0630.187.Dodd-FrankActwassignedintolawonJ

28、ulycouldhavesignificantimpactontheUSbankingindustry0.0530.158.PotentialforUnitedStateseconomicrelapse0.0720.14TOTALS1.002.931504 April 2011CPM 1604 April 2011Internal Audit1704 April 2011Organizational StructureChairmanCEO, Brian T MoynihanGlobal Technology and Operations Executive, Catherine P. Bes

29、santCo-Chief Operating Officer, David C. DarnellGlobal Strategy and Marketing Officer, Anne M. FinucaneCorporate General Auditor, Christine P. KatziffChief Risk Officer, Terry P. LaughlinGlobal General Counsel, Head of Compliance & Regulatory Relations, Gary G. LynchCo-Chief Operating Officer, T

30、homas K. MontagGlobal Head of Human Resources, Andrea B. SmithLegacy Asset Servicing Executive, Ron D. StrurzenggerChief Financial Officer, Bruce R. Thompson1804 April 2011Divisional Analysis 1904 April 2011Divisional Analysis2004 April 2011Financial Information:Income Statement2104 April 2011Financ

31、ial Information:Balance Sheet2204 April 2011Financial Information:Cash Flow 2304 April 2011Financial Information:Ratio Analysis20102011Liquidity RatiosCurrent Ratio0.660.64Quick Ratio0.660.64Leverage RatiosDebt-to-Total Assets Ratio0.190.18Debt-to-equity Ratio1.91.65Long-term debt-to-equity Ratio0.5

32、60.52Key RatiosReturn on equity-0.0090.006Return on assets-0.00090.0006Loan to deposit ratio0.930.89Total Capital15.7716.75Tier 1 leverage7.217.53Efficiency Ratio 74.6185.012404 April 2011Financial Information:Company WorthBankofAmericaCompany Worth Analysis StockholdersEquity$229,095,000,000NetInco

33、mex5$7,230,000,000(SharePrice/EPS)xNetIncome$803,976,000,000NumberofSharesOutstandingxSharePrice$56,395,080,000Method Average$274,174,020,000 JPMorganChaseCompany Worth Analysis StockholdersEquity$183,573,000,000NetIncomex5$94,880,000,000(SharePrice/EPS)xNetIncome$140,837,500,000NumberofSharesOutsta

34、ndingxSharePrice$125,442,275,000Method Average$136,183,193,750 2504 April 2011Strengths1. Bank of America serves clients in more than 150 countries and has a relationship with 99% of U.S. Fortune 500 companies2. 21 in the Global 500. Bank of America Corp.3. BOA serves approximately 55 million consum

35、ers, clients and small businesses around the world, doing business with one out of every two households in the U.S4. BOA has approximately 5,700 banking centers and approximately 17,750 ATMs5. The companys new Merrill Edge account enables customers to manage their banking and investing activities th

36、rough an integrated platform. 6. BOA lowered their long-term debt by $76 billion in 2011.7. Revenue diversification is helping the company to serve a large customer base, as well as helping it to offset volatility in its revenue streams8. Decreased Non-preforming loans by 5 billion in 20112604 April

37、 2011Weaknesses1. International markets only account for approximately 10% of the banks revenue.2. BOA efficiency ratio has increased over 10% in the last year to 85.59%3. EPS of -0.37 in 2010 and 0.01 in 20114. Net income loss of 2.2 billion in 20105. BoAs revenues have been declining since 2009 at

38、 a compounded annual change rate of 12% to $93,454 million in 20116. The representations and warranties provision in 2011 included $8.6 billion related to the BNY Mellon Settlement and $7.0 billion related to other exposures.7. Bank of America has a ACSI index rating of 682704 April 2011IFE MatrixIn

39、ternal Factor Evaluation Matrix (IFE)StrengthsWeight RatingWeighted Score1.BankofAmericaservesclientsinmorethan150countriesandhasarelationshipwith99%ofU.S.Fortune500companies0.1030.302.21intheGlobal500.BankofAmericaCorp.0.0430.123.BOAservesapproximately55millionconsumers,clientsandsmallbusinessesaro

40、undtheworld,doingbusinesswithoneoutofeverytwohouseholdsintheU.S0.0740.284.BOAhasapproximately5,700bankingcentersandapproximately17,750ATMs0.0940.365.ThecompanysnewMerrillEdgeaccountenablescustomerstomanagetheirbankingandinvestingactivitiesthroughanintegratedplatform.0.0530.156.BOAloweredtheirlong-te

41、rmdebtby$76billionin2011.0.0530.157.Revernuediversificationishelpingthecompanytoservealargecustomerbase,aswellashelpingittooffsetvolatilityinitsrevenuestreams0.0640.248.DecreasedNon-preformingloansby5billionin20110.0540.20WeaknessesWeight RatingWeighted Score1.Internationalmarketsonlyaccountforappro

42、ximately10%ofthebanksrevenue.0.0920.182.BOAefficiencyratiohasincreasedover10%inthelastyearto85.59%0.0620.123.EPSof-0.37in2010and0.01in20110.0620.124.Netincomelossof2.2billionin20100.0720.145.BoAsrevenueshavebeendecliningsince2009atacompoundedannualchangerateof12%to$93,454millionin20110.1010.106.Ther

43、epresentationsandwarrantiesprovisionin2011included$8.6billionrelatedtotheBNYMellonSettlementand$7.0billionrelatedtootherexposures.0.0520.107.BankofAmericahasaACSIindexratingof680.0620.12TOTALS1.002.682804 April 2011Strategy Formulation2904 April 2011SWOT MatrixSO Strategies1 Increase positive presen

44、ce in Social Media (S1 S3, O1, O2, O3, O7)2 Increase marketing by 50% (S1, S2, S3, S4, O1, O2, O3, O4)3 Increase marketing to mobile users (S1, S3, S4, O1, O2, O3, O4)ST Strategies1 Increase number of ATMs (S1, S3, S4, T4)WO Strategies1 Increase customer service training (W2, W7, O1, O2, O4)2 Develo

45、p consumer banking applications (W7 O1, O2, O3, O7)3 Continue expansion into global market (W1, W5, O2, O5)WT Strategies1 Continue to sell non-core assets (W1, W5, T2, T3, T4, T8)3004 April 2011Space Matrix Market developmentMarket penetrationProduct developmentRelated diversification3104 April 2011

46、IE MatrixTheIFETotalWeightedScoresStrongAverageWeak4.03.02.01.03.02.01.0356142NetIncome%Revenue%IFEEFE1Deposits1,1925.68%12,68913.46%3.232.642CardServices5,78827.59%18,14319.25%3.043.263ConsumerRealEstateServices(19,529)-(3,154)-3.35%2.251.874GlobalCommercialBanking4,40220.99%10,55311.20%2.962.455Gl

47、obalBanking&Markets2,96714.15%23,61825.06%2.882.166GlobalWealth&InvestmentManagement1,6357.79%17,37618.44%2.742.517AllOther4,99123.79%15,02115.94%Total1,446100.00%94,246100.00%AdjustedTotal*20,975*DoesnotincludeRealEstateServicesBackward, Forward, horizontal penetrationMarket penetrationMark

48、et developmentProduct development3204 April 2011Grand Strategy Matrix Market developmentMarket penetrationProduct developmentHorizontal integrationDivestitureLiquidation3304 April 2011BCG MatrixNet Income%Revenue%Relative Market ShareGrowthDeposits 1,192 5.68% 12,689 13.46%57%-30%Card Services 5,788

49、 27.59% 18,143 19.25%1-10%Consumer Real Estate Services (19,529)- (3,154)-3.35%63%-20%Global Commercial Banking 4,402 20.99% 10,553 11.20%13%Global Banking & Markets 2,967 14.15% 23,618 25.06%44%-13%Global Wealth & Investment Management 1,635 7.79% 17,376 18.44%52%-14%All Other 4,991 23.79%

50、15,021 15.94%n/an/aTotal 1,446 1 94,246 1Adjusted Total*20975* Does not include Real Estate Services3404 April 2011BCG MatrixRelativeMarketShareHighMediumLowHighIndustrySalesGrowthRateMediumLow234561Product DevelopmentDiversificationDivestitureRetrenchmentDivestitureLiquidationBackward, Forward, hor

51、izontal penetrationMarket penetrationMarket developmentProduct development3504 April 2011Matrix Analysis Alternative StrategiesIESPACEGRANDBCGCOUNTForward IntegrationXx2Backward IntegrationXx2Horizontal IntegrationXXx3Market PenetrationXXXx4Market DevelopmentXXXx4Product DevelopmentXXXX4Related Dive

52、rsificationXX2Unrelated DiversificationX1Retrenchment X1DivestitureXX2LiquidationXX23604 April 2011Possible Strategies Market Penetration SO2 - Increase global marketing by 50% over 3 years SO3 - Increase marketing to mobile users ST1 - Increase number of ATMs Market Development WO3 - Continue expan

53、sion into global market Product Development WO2 - Develop consumer banking applications3704 April 2011QSPM Increase Global Marketing by 50% over 3 yearsDevelop consumer banking applicationsOpportunitiesWeightASTASASTAS1.Smartphoneswillreachmorethan2.5billionusersby20150.0920.1840.362.Accordingtoindu

54、strysources,mobilebankingusersworldwidewillreach530millionby2013,upfromjustover300millionin20110.0730.2140.283.TheUSbankssectorgrewby11.3%in2010toreachavalueof$11,713.2billion0.0710.0720.144.ProjectedincreaseofpopulationintheUnitedStatesof82%from2005to20500.0540.2020.105.consolidationofthefinancials

55、ervicessectorprovidespotentialforcompanyacqusitions0.06-6.Expansionintotheglobalmarket0.0940.3630.277.PresidentObamaunveiledastimulusplantotaling447Billion0.0640.2420.12ThreatsWeightASTASASTAS1.Mortgagerateshitrecordlow:30-yearfixednears4%0.09-2.Stockpricedropedover50%since20080.0720.1430.213.Thenum

56、berofbankfailuresincreasedfrom25in2008to92in2011.0.06-4.Thecosttobusinessesworldwideaddsuptoastaggering$221billioneachyear.0.0620.1240.245.Consumerdefaultsoncreditcards,mortgages,etc.0.0520.1030.156.ThepossibilityoftheFederalReserveincreasinginterestrates.0.06-7.Dodd-FrankActwassignedintolawonJulyco

57、uldhavesignificantimpactontheUSbankingindustry0.0530.1510.058.PotentialforUnitedStateseconomicrelapse0.07-3804 April 2011QSPMIncrease Global Marketing By 50% over 3 yearsDevelop consumer banking applicationsStrengthsWeightASTASASTAS1.BankofAmericaservesclientsinmorethan150countriesandhasarelationshi

58、pwith99%ofU.S.Fortune500companies0.1040.4030.302.21intheGlobal500.BankofAmericaCorp.0.04-3.BOAservesapproximately55millionconsumers,clientsandsmallbusinessesaroundtheworld,doingbusinesswithoneoutofeverytwohouseholdsintheU.S0.0730.2140.284.BOAhasapproximately5,700bankingcentersandapproximately17,750A

59、TMs0.0940.3620.185.ThecompanysnewMerrillEdgeaccountenablescustomerstomanagetheirbankingandinvestingactivitiesthroughanintegratedplatform.0.0520.1040.206.BOAloweredtheirlong-termdebtby$76billionin2011.0.05-7.Revernuediversificationishelpingthecompanytoservealargecustomerbase,aswellashelpingittooffset

60、volatilityinitsrevenuestreams0.0620.1230.188.DecreasedNon-preformingloansby5billionin20110.0500.0000.00WeaknessesWeightASTASASTAS1.Internationalmarketsonlyaccountforapproximately10%ofthebanksrevenue.0.0930.2720.182.BOAeffeciencyratiohasincreasedover10%inthelastyearto85.59%0.0630.1820.123.EPSof-0.37in2010and0.01in20110.06-4.Netincom