Expanding the Organization Leydis Fuste MGT/576 3/22/2021 AGENDA ✓ Select a country that the Organization could consider expanding its operation ✓ Analyze the market by the 4 aspects of the Diamond national advantage, which include industry rivalry, factor endowments, demand conditions, and related and supporting industries ✓ Analyze forces that will help the Organization in expansion and factors that are barriers to expansion ✓ Evaluate adjustments that need to be made by leaders as they expand internationally, according to (Burkus 2012) ✓ Give Recommendations. SAUDI ARABIA ✓ It's a middle East country and one of the countries with the highest population in the region. ✓ The country's economy is dominated by petroleum and other oil-associated industries (Shaikh, 2018). DIAMOND OF NATIONAL ADVANTAGE Industry Rivalry ✓The industry is highly competitive. ✓The Banking services are already provided by the numerous licensed banks ✓There's a need for effective marketing and advertising to attract customers. DEMAND CONDITIONS ✓The United States is the third most populated country in the world, and thus the demand for financial services by the US population is high ✓There is a need to meet the demand for financial services for the country's population. ✓There is a high demand for banking services in the US RELATED AND SUPPORTING INDUSTRIES ✓Many banking institutions in the United States offer competition to the Bank of America, such as JP Morgan, Wells Fargo, among others. ✓Some many other industries and sectors support the financial institution or the banking sector, such as the services sector, agriculture sector, among others which employ a lot of people who then require financial services (Kharub & Sharma, 2017) FACTOR ENDOWMENTS ✓ The host country herein, which is the US, is endowed with all factors of production. ✓ The country has Skilled labor, which is a specialized factor ✓ Advanced infrastructure and technology, which ensure that the Industry is successful in the global market. FACTORS THAT WILL HELP THE ORGANIZATION SUCCEED ✓High demand for the financial services in KSA ✓Use of new advanced technology which guarantees safety for the customers and their money in Bank (Osmundsen et al., 2018) FACTORS THAT WILL HINDER THE SUCCESS OF THE ORGANIZATION ✓ Stiff competition due to numerous licensed banks providing banking services in the KSA ✓ Strict Rules and Regulation Governing Banks, which involve assessment by various government agencies, also considers numerous criteria before licensing the Bank for operation (Altaf et al., 2019). LEADERSHIP ACTIONS REQUIRED TO MAKE ADJUSTMENTS ✓ Leaders need to make various leadership actions to make the adjustments suggested by Burkus (2012). These actions include; ✓ Being creative and open-minded✓ Listen to others, especially the people who are well conversant with the culture of the new market. ✓ Consult extensively with the local competitors to understand the market. RECOMMENDATION • The recommendation herein for the Bank of America regarding expansion to the Kingdom of Saudi Arabia include; ✓ Expand the operations to the country since there are readily available markets and high demand for financial services. ✓ The Organization should also set aside a good budget for advertisement and marketing as it enters the market to attract customers who are not satisfied with services offered by the banks in operation. CONCLUSION The organization that is the Bank of America (BOC), should expand its operations in the Kingdom of Saudi Arabia (KSA) and provide its services to the KSA residents or citizens. The company utilizes modern technology in the provision of its services and also has well-skilled personnel that will ensure delivery of quality services to the customers, and thus it will attract customers and compete with the other financial institutions. REFERENCES Kharub, M., & Sharma, R. (2017). Comparative analyses of competitive advantage using Porter diamond model (the case of MSMEs in Himachal Pradesh). Competitiveness Review: An International Business Journal. Shaikh, Z. (2018). A comparative study on the Demographic Indicators of the Kingdom of Saudi Arabia, Ministry of Health. RESEARCH REVIEW International Journal Of Multidisciplinary, 3(6), 167-171. Burkus, D. (2012). Essay: Developing Global Leadership: A review of barriers and adjustments for international expansion. International Management Review, 8(2), 83. Osmundsen, K., Iden, J., & Bygstad, B. (2018, September). Digital Transformation: Drivers, Success Factors, and Implications. In MCIS (p. 37). Altaf, M., Hameed, W., Nadeem, S., & Shahzad, A. (2019). Successful entrepreneurial process as contributor towards business performance in banking: moderating role of passion for inventing. South Asian Journal of Management Sciences, 13(1), 13-40. BANK OF AMERICA LEYDIS FUSTE MGT/576 3/8/21 AGENDA • Bank of America is a strong investment bank in the united states. • It is affected by both internal and external environment. • We are going to look at the external environment of this company. • Besides, it is important to evaluate opportunities for Bank of America that add environmental, social and economic value. • Finally, we will recommend a chance that best takes advantage of the organization’s values. DESCRIPTION OF THE ORGANIZATION • The organization being dealt with is that of Bank of America. • It is a multinational investment financial and bank service holding company. • Its’ headquarters is in Charlotte, North Carolina. • It was founded in San Francisco in 1998 (Lynch & Morgan, 2017). • It performs very well by providing financial services to its customers. • Has a strong financial position in the United States. SUMMARY OF STRENGTHS AND WEAKNESSES Strengths ❖ Enormous brand value of its finance and banking services. ❖ Diversified portfolio. ❖ Strong financial position. ❖ Strong stability and status. ❖ Established worldwide footprint, strong customer base and bright image (Bank of America's Strategy of Responsible Growth, n.d.). SUMMARY OF STRENGTHS AND WEAKNESSES Weaknesses ❖ Depend so much on price cuts. ❖ Its reputation is declining as a result of controversies. ❖ Its major income is credited to the home market. ❖ Low revenue earned from outside countries. ASSESSMENT OF THE EXTERNAL ENVIRONMENT • There are great opportunities for the company from the external environment that can improve and boost financial and banking services. • They include: i. Unmet-technological level. ii. Lack of joint ventures and acquisition. iii. Uncovered foreign markets. ASSESSMENT OF THE EXTERNAL ENVIRONMENT Unmet-technological level ❖ The world is evolving and thus the technology level. ❖ By improving and keeping updated with the innovation of technology the organization will be a step ahead of other banking organizations. Lack of joint ventures and acquisition. ❖ Bank of American should merge with the best banking industries from various parts of the world (Bank of America's Strategy of Responsible Growth, n.d.). Uncovered foreign markets. ❖ It should take steps toward globalization of entering new markets OPPORTUNITIES THAT ADD ECONOMIC VALUE • Opportunities that add economic value include the following: i. Taking advantage of digital technologies. ii. Merging, joint ventures and acquisition. iii. Diversification of foreign markets. iv. Venturing into lower-priced markets. ▪ These are the opportunities that Bank of America can venture in and in the end, their economic value will be increased. OPPORTUNITIES THAT ADD SOCIAL VALUE • Opportunities that add social value include the following: i. Diversification of foreign markets- it promotes social contract with clients thus becoming more popular in other countries all over the world (Norrestad, 2020). ii. Merging, joint ventures and acquisition- the company can merger with nongovernmental organizations in helping those individuals that are vulnerable in society. iii. Working with pro-social companies - it will help Bank of American to share ideas with such companies thus increasing its social knowledge and value. OPPORTUNITIES THAT ADD ENVIRONMENTAL VALUE i. Engaging corporate social responsibility- CSR is a business model that supports companies to be accountable to the social environment that they operate in (Bank of America's Strategy of Responsible Growth, n.d.). ❖The banking company can engage in Corporate Social Responsibility (CSR) as it helps the organization integrate environmental and social concerns in their business interactions and operations with the community they are serving and their stakeholders. ❖ The CSR activities that the industry engages in include environmental conservation, volunteerism, labor practices, and diversity. ii. Taking advantage of digital technologies- using solar panels to generate heat reduces the consumption of heat being used thus preserving our environment. A RECOMMENDED OPPORTUNITY TO BE PURSUED FIRST • Diversifying into markets outside the United States should be the first opportunity that the Bank of American should take. • This can take place by identifying areas that need development. • For example, Bank of America depends vastly on the American market, as the company has over-dependence on the American market (Norrestad, 2020). • By focusing on the market size outside the United States, the target revenue at the end of the year will be achieved. • The company will have made huge steps ahead by looking at various sectors of the economy that would allow them to expand and grow. CONCLUSION • Bank of America has a strong financial position. • It has a strong position in the American market. • It believes that empowering employees is an important entrepreneurial strength. • By looking at the strengths, weaknesses and opportunities the company has, it is possible to identify weak areas and work towards performing better. • Additionally, there are great opportunities for the company from the external environment that can improve and boost financial and banking services. • Finally, by diversifying into markets outside the United States, Bank of America will possibly increase its revenue (Norrestad, 2020). REFERENCES • Bank of America's Strategy of Responsible Growth. (n.d.). Retrieved February 27, 2021, from https://about.bankofamerica.com/en-us/who-we-are/ourstrategy.html#fbid=NBnA5y3oIxF • Lynch, B. M., & Morgan, C. L. J. (2017). Bank of America, NA. • Norrestad, P. B., & 6, N. (2020, November 06). Market share of leading U.S. banks by domestic deposits 2019. Retrieved February 27, 2021, from https://www.statista.com/statistics/727546/market-share-of-leading-banks-usadomestic-deposits/ MGT/576 v1 Entrepreneurial Strengths and Actions to Increase Value Creation Complete the table below, assessing the company’s strengths and weaknesses and describing the company’s approach to innovation. Company name: Bank of America Company website URL: https://www.bankofamerica.com/ 3 to 5 entrepreneurial strengths of the company (90 – 175 words) Answer: Bank of America has many entrepreneurial strengths: 1. Bank of America has a strong financial position. Bank of America’s financial status is stable over the years, and it had not experienced major financial crises in the past decades. 2. Bank of America has a strong position in the American market. According to Norrestad (2020), Bank of America’s market share is the highest among competitors, and it is about 10.5%. 3. Bank of America has robust stability and status over the years, which is a major strength. In the end, Bank of America has a strong customer base and a bright image, which is also considered an entrepreneurial strength. Major elements of the company’s approach to entrepreneurship and value creation (175 words) Answer: Bank of America is a strong investment bank in the united states. According to Bank of America’s Strategy of Responsible Growth (n.d.), this Bank has valued elements leading the company toward entrepreneurship and value creation: 1. The Bank’s strategy focuses on a customer-focused strategy; its strategies are based on satisfying the customers’ needs and ambitions. 2. One of Bank of America’s key strategies is to grow in a sustainable manner. Bank of America knows that staying on top is more important than reaching it, and hence, they ensure sustainability in growth. 3. This company develops their organization in a way that their work environment is a great place to work; the employment system is built in a great way to ensure comprehensive benefits such as health and wellness. Bank of America believes that empowering employees is an important entrepreneurial strength. Besides, Bank of America focuses on racial equality and multiculturalism, and this strategy helps Bank of America to have a higher social recognition and reputation, which can boost value creation. In the end, Bank of America follows the strategies of growing in the risk framework; hence risk management is always followed, which mitigates potential faced risks. Copyright 2020 by University of Phoenix. All rights reserved. Title ABC/123 vX Page 2 of 2 Company name: Bank of America 1 action the company could take to increase entrepreneurial value creation Answer: Although Bank of America has a bright entrepreneurial value, there are chances to increase it. This can take place by identifying areas that need development. For example, Bank of America depends vastly on the American market, as the company has over-dependence on the American market. A company like Bank of America should take steps toward globalization of entering new markets since it is a massive company with noted success. Bank of America could enter new markets as a strategy to increase customer base and global penetration, and this could increase entrepreneurial value creation for Bank of America. References: Bank of America's Strategy of Responsible Growth. (n.d.). Retrieved February 27, 2021, from https://about.bankofamerica.com/en-us/who-we-are/our-strategy.html#fbid=NBnA5y3oIxF Norrestad, P. B., & 6, N. (2020, November 06). Market share of leading U.S. banks by domestic deposits 2019. Retrieved February 27, 2021, from https://www.statista.com/statistics/727546/market-shareof-leading-banks-usa-domestic-deposits/ Copyright 2019 by University of Phoenix. All rights reserved. MGT/576 v1 Porter’s Five Forces Complete the table below. For the company you’ve decided to assess in week 1, determine the strength of each of Porter's Five Forces and the complementors. Justify your determination with examples. Strength Provide a justifying with your Industry force Example Hig Mediu h m Low x The threat of new entrants determination with examples This is why I believe it is medium. x The threat of new entrants is low because the banking industry offers a significant barrier to new start-ups. Capital is a significant barrier to new entrants seeking to establish a new bank (Temelkov, 2018). Investing in a banking business requires a considerable amount of capital and resources. Additionally, most banks and financial institutions build up contractual connections with suppliers to increase their access to the target clients. For example, the establishment of new banks put a low pressure on The Copyright2020by University of Phoenix. All rights reserved. Porter’s Five Forces MGT/576 v1 Page 2 of 6 Strength Industry force Provide a justifying with your Hig Mediu h m Low determination with examples Bank of America because it has a solid financial position and a strong brand presence in the banking sector. The organization has a strong presence in the American financial market. In the client's psychological content, switching is high in the banking sector. Besides, the banking sector's existing brands have a loyal client base. Power of buyers x Buyer bargaining power is medium because customer switching in the banking sector varies from medium to high. Bank clients have the common market knowledge and price sensitivity(Sardana, 2018). The banking sector has two types of clients; corporate customers and individual buyers. The individual clients have weak bargaining power and a tiny impact on Bank of America's operations. For example, a bank client may find it difficult to switch their bank because of the high cost of changing banks. Corporate buyers constitute a weak force because they engage banks in operating large projects. Corporate Copyright 2020 by University of Phoenix. All rights reserved. Porter’s Five Forces MGT/576 v1 Page 3 of 6 Strength Industry force Provide a justifying with your Hig Mediu h m Low determination with examples clients also face a high cost of switching since it is difficult to find a bank that can offer them huge funds. Power of suppliers x Supplier bargaining power is weak because the banking sector offers no threat to supplier integration. The banking sector has many services and product suppliers, and hence they cannot bargain strongly (Hanafizadeh, 2018). Additionally, other investment entities can also entice and hire service suppliers like employees. For example, Bank of America requires highly specialized employees and other investment banks to hire staff. Suppliers have a weak force on Bank of America's operations because they have the adequate market knowledge and are price sensitive. Capital suppliers are also many in the financial sector and have weak bargaining power. Power of substitutes x The threat of substitution is high in the banking sectors because other firms offer similar financial services. For Copyright 2020 by University of Phoenix. All rights reserved. Porter’s Five Forces MGT/576 v1 Page 4 of 6 Strength Industry force Provide a justifying with your Hig Mediu h m Low determination with examples example, Bank of America faces a considerable threat from other unconventional lenders that operate lending schemes to enable buyers to get items at a lower price. Banks offer a range of services beyond lending and taking deposits. However, non-banking organizations pose a significant threat of substitution because they provide similar quality financial services to clients. Customers can get some banking services in income securities, insurance and mutual funds. Rivalry competitors among x The competition force is high because of the high level of exit barriers. Additionally, the banking sector is a competitive industry because rival companies can use various strategies like investment services, lower financing and rates to attract customers from their competitors (Abdolshah, 2018). For example, Bank of America faces significant competition because it is diverse and targets the same market. Rival financial institutions in the banking sector are enormous and Copyright 2020 by University of Phoenix. All rights reserved. Porter’s Five Forces MGT/576 v1 Page 5 of 6 Strength Industry force Provide a justifying with your Hig Mediu h m Low determination with examples balanced, offering similar service quality and performance. Therefore competition is a significant concern for the Bank of Africa. Complementors x The force of complementors is high due to the shift of financial activities from banking organizations to the security market. Banks and security markets are economic systems that complement each other. highly Security markets are eventually assuming roles that banks play on clients. Banks and markets continue to exist in the financial system because they are essential in meeting consumers' financial needs. For example, most borrowers combine bonds and bank loans. Additionally, consumer fiancé through securitized assets is becoming a conventional system in the United States banks and markets complement each other to enhance economic growth in a country. Copyright 2020 by University of Phoenix. All rights reserved. Porter’s Five Forces MGT/576 v1 Page 6 of 6 Strength Industry force Provide a justifying with your Hig Mediu h m Low determination with examples References: Abdolshah, M., Moghimi, M., & Khatibi, S. A. (2018). Investigating Competitive Advantage in Banking Industry Based on Porter's Generic Strategies: IRANs Newly-Established Private Banks. International Journal of Applied Management Sciences and Engineering (IJAMSE), 5(1), 52-62. Hanafizadeh, P., & Ravasan, A. Z. (2018). An empirical analysis on outsourcing decision: the case of e-banking services. Journal of enterprise information management. Sardana, V., & Singhania, S. (2018). Digital technology in the realm of banking: A review of literature. International Journal of Research in Finance and Management, 1(2), 28-32. Temelkov, Z. (2018). Fintech firms opportunity or threat for banks?. International journal of information, Business and Management, 10(1), 137-143. Copyright 2020 by University of Phoenix. All rights reserved. MGT/576 v1 Learning Organizations and Value Creation Review the 6 key elements of a learning organization (Ch. 11 of Strategic Management, by Dess). Complete the table below. Evaluate the extent to which the company you’ve selected to assess in this course epitomizes each of the 6 elements. Justify your determination with examples. Learning Organization Element Extent to which the company epitomizes this element High Example Medium x Provide a sentence justifying your determination Low [This] is why I believe it is medium. Inspiring and motivating people with a mission or purpose x Bank of America’s mission is to improve people’s financial lives. It does this by providing resources and educating the public on financial wealth and how to achieve financial goals. It also involves people to learn and participate actively in improving their financial status which makes people feel like a part of them (Bank of America Corporation, 2020). Therefore, it fulfills its mission and this is why I believe it is high. Developing leaders x Bank of America has supported most youths across the USA by involving them in their programs. For instance, they provide them with leadership summits and nonprofit summer jobs aimed at developing their leadership skills and this is why I believe it is high (Bank of America Corporation, 2020). Empowering employees x The bank of America has an organizational culture of caring for its teammates in all aspects. It is also rated among one of the best companies to work for and this is why I believe it is high. Copyright 2020 by University of Phoenix. All rights reserved. Learning Organizations MGT/576 v1 Page 2 of 2 Learning Organization Element Extent to which the company epitomizes this element Accumulating and sharing internal knowledge x Gathering and integrating external information Challenging the status quo and enabling creativity The bank has succeeded in disseminating knowledge to its employees and encouraging widespread sharing of information (Bank of America Corporation, 2020). However, it has not fully succeeded in allowing collaborative decision making fully and this is why I believe it is medium. x x Provide a sentence justifying your determination The bank does not epitomize this element in that it does not implement all the ideas associated with gathering information on their threats and this is why I believe it is low. Bank of America has created a culture of creativity through encouraging its employees to offer creative ideas that can help grow the company. It has also challenged the status quo that has created a culture of dissent by overcoming barriers and failures and this is why I believe it is high (Bank of America Corporation, 2020). Recommend at least 1 step the organization's leaders could take to enhance 1 of the elements and explain how that could help the organization create more value. The organization’s leaders could try listening to the American citizens as much as they listen to their employees ideas. When more people come together to brainstorm, more ideas can be developed that can help grow and expand the company while creating more value. More so, it will fulfill people’s need to feel like a part of the organization’s mission (Dess, McNamara, Eisner, & Lee, 2021). An organizational culture that looks into the people’s needs as well as its employees will be fostered thus leading to its growth and expansion. The culture will be one of its strengths against coping with the rivalry and competition it faces. References: Bank of America Corporation. (2020). A Global Company with a Local Focus. Bankofamerica. Retrieved from https://about.bankofamerica.com/en-us/who-we-are.html#fbid=yWkgfkFsZUt Dess, G., McNamara, G., Eisner, A., & Lee, S.-H. (2021). Strategic management: text and cases. New York: McGraw-Hill Education. Copyright 2019 by University of Phoenix. All rights reserved.
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