On the forces of competition, there are many forces that influence the competition in the Bank of America Corporation. To begin with, there is the force of new bank customer in which the bank identifies that there is change in customer and business profiles over the years of business operations.Demographic, social and technological factors will fragment customer needs, tastes and preferences. With time, banks will not only have to manage the costs of their customers’ needs, but also refine their value propositions and service concepts if they are to compete effectively. As banks look for ways to design specific products and services to address these changes, packaging, labeling and category management will become crucial and, therefore, influence the general operations of the banks(Kearney, 2009).
Secondly, there is the force of supply. This brings about the question of where the money used in operations of the business comes. It also brings about the question of how the economic downturn influence supply in the financial-services industry. The answer to this question depends on the structural changes of the industry and competitive intensity, and on the way the bank brings products and services to market. The main factor here is the optimal size of the company where is evident the size of the company does not determine its success or failure and that even big companies can fail. The deeper issue is whether society is better off with a group of specialists with optimal size reducing risk by containing it in manageable parts. Given the obvious trend toward globalization, certain banking activities will need an international footprint. It should be remembered that when business choices lead to presence in a certain country,cultural and managerial challenges follow (Kearney, 2009).
Banks under new management is another force of competition in the Bank of America Corporation. Here, the bank regulators are rethinking their monitoring practices, and this could lead to new accounting standards, capital adequacy and even the restructuring of the entire financial system. The focus is on several areas which limit market-to-market accounting practices, despite their advantages in times of high liquidity. They also determine capital adequacy of credit and liquidity provisioning; and also allocating capital to different banking areas. If the focus spreads further, regulators could demand online and confidential access to the risk position of every supervised situation (Kearney, 2009).
Technology and Infrastructure is another force of competition.In information technology and infrastructure covering such functions as clearing, settlement and exchanges improvements are yet to be made fully and there are many opportunities forcutting costs and upgrading capabilities in this area. The process of opening accounts is still largely a manual one, and mandate management still involves extensive paperwork. Countries with access to internet greatly depend on online banking services and this brings about competition in terms of customers who receive the banking services (Kearney, 2009).
Lastly, performance of the company is concerned with making profits for the bank. This is the competition force that shapes the banking industry in the future. Questions about the type of profits that can be expected over the next few years and whether profit potential is attractive enough to secure access to capital arise immediately.It also has to be established whether governments should allow special tax breaks for banking.As the economy recovers, additional capital requirements could dampen returns, thereby rendering the sector unattractive for investors. Competitive returns are needed if the industry is to be viable, but until the fog surrounding credit losses lifts, it will be hard to ascertain the extent of those returns (Kearney, 2009).
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