Bank of America

Premium members report, featuring a concise PESTLE, Porters Five Forces, 5C, MOST, 7Ps, CATWOE and SWOT

This analysis of Bank of America is part of our coverage of the world’s 10,000 largest companies.

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Company Description

Bank of America is a multinational banking and financial services corporation headquartered in Charlotte, North Carolina. Founded in 1904, Bank of America is one of the largest banks in the world, offering a variety of products and services, including checking and savings accounts, loans, credit cards, investments, and wealth management. The company also provides specialised services to businesses, governments, and individuals in more than 150 countries and territories.

Industry Overview

Bank of America operates in the financial services industry, which has a total market size of approximately $1.5 trillion in the US. It employs approximately 2.3 million people in the US and other countries across the globe. These employees are typically based in the US, UK, India, Canada, and other countries. The industry is highly competitive and affected by global economic trends.

Industry Classification

In terms of formal classification, Platform Executive has tagged Bank of America as a business operating within the Banking industry.

Major Products & Services

The main products and/or services commercialised by this business include:

  • Checking Accounts
  • Savings Accounts
  • Credit Cards
  • Mortgages
  • Home Equity Lines of Credit
  • Auto Loans
  • Investment Services
  • Online and Mobile Banking
  • Insurance
  • Financial Planning

Table of Contents

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Competitive Landscape

Bank of America operates in a highly competitive environment within the financial services industry. The company faces competition from other major banks, credit unions, and online banking options. Customer demand for convenience, innovation, and competitive interest rates drives this fierce competition. Additionally, non-traditional financial technology companies are also disrupting the market with their innovative solutions. These competitors offer a range of services, including personal and business banking, loans, investments, and insurance. As a result, Bank of America must continuously adapt and differentiate itself by providing superior customer service, offering diverse financial products, and implementing cutting-edge technology to remain competitive in this dynamic market.

Key Competitors

We have identified the following organisations as being key competitors:

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Key Stakeholders

Stakeholders are individuals or groups affected by a business's actions. Understanding their needs helps a business make decisions that benefit all parties.

Internal and external stakeholders include the following:

1. Customers: Bank of America customers are the individuals and businesses that use the bank's products and services.

2. Shareholders: Shareholders include individuals and corporations that own Bank of America stock.

3. Employees: Bank of America employees are the individuals who work for the bank and are responsible for its day-to-day operations.

4. Regulators: Regulators, such as the Federal Reserve, oversee Bank of America's activities and ensure that the bank is operating within the law.

5. Communities: Bank of America is active in many communities, providing financial services and resources to help people in need.

Customers and Cohorts

The main customers of the organisation include:

  • Consumer Banking customers
  • Small Business Banking customers
  • Corporate Banking customers
  • Private Banking customers
  • Investment Banking customers
  • Wealth Management customers
  • Online Banking customers
  • Mobile Banking customers
  • Credit Card customers
  • International Banking customers

Competitive Advantages

Competitive advantages are unique attributes, strategies, resources, or capabilities that allow an organisation to outperform its competitors and achieve superior market position and profitability.

Competitive advantages for the business include the following:

Size and Scale: Bank of America is one of the largest and most successful banks in the world. It has a vast network of branches, ATMs, and digital offerings that enable it to serve both individual and commercial customers.

Financial Strength: Bank of America has a strong balance sheet, with a tier 1 capital ratio of 11.4% and a total risk-based capital ratio of 16.7%. This indicates the bank’s ability to withstand economic and financial shocks.

Customer Service: Bank of America has a reputation for providing excellent customer service. It offers a wide range of products and services, personalised advice, and convenient digital banking options.

Innovation: Bank of America is a leader in developing and deploying innovative solutions to meet customer needs, such as its mobile banking app, online banking options, and advanced fraud protection.

Rewards Programs: Bank of America offers rewards programs for its customers, including cash back, travel rewards, and discounts on goods and services.

Market Trends

Market trends can significantly impact an organisation by influencing consumer behavior, altering supply and demand dynamics, and ultimately affecting the organisation’s ability to remain competitive in the market. Staying ahead of these trends enables businesses to proactively adapt their strategies, mitigate risks, and capitalise on emerging opportunities.

As part of this study, we have identified a number of potential trends that could impact the organisation. These include the following:

Market Trends

Key Performance Indicators

Key Performance Indicators
KPIs (Key Performance Indicators) are important to a business such as Bank of America as they help measure progress towards achieving organisational goals and objectives. They provide a useful insight into the performance of different areas of the Bank of America business and therefore enable informed decision-making.

KPIs also help to motivate employees towards achieving targets.

Below is a list of Key Performance Indicators we deem relevant to this company:

Brand Strength

Brand strength is more than a logo or name. It reflects a company’s reputation and how it is perceived by customers, investors, and employees. It is built on core values, mission, and a unique selling proposition (USP) that differentiates the business.

Brand strength goes beyond superficial elements and taps into core values, the defined mission, and unique selling proposition (USP) of a company.

Below are key reasons why brand strength matters:

Trust and Credibility: In a market flooded with choices, customers gravitate toward brands they trust. A strong brand signals reliability and quality, fostering customer loyalty. Loyal customers not only make repeat purchases but also advocate for the brand, driving word-of-mouth growth.

Brand Strength Analysis

Differentiation: A strong brand helps a company stand out in competitive markets by clearly communicating its value proposition. It creates a unique identity, establishes a competitive edge, and positions the company as a leader in its industry. For example, Google is synonymous with internet search.

Customer Loyalty: A positive brand experience builds emotional connections, making customers less price-sensitive and willing to pay a premium. Loyal customers generate repeat business and act as brand ambassadors, reducing customer acquisition costs and boosting long-term profitability.

Talent Acquisition and Retention: A strong brand not only attracts top talent but also enhances employee morale and engagement. Employees who identify with a reputable brand are more motivated, productive, and committed, driving better business outcomes.

Benchmarking Brand Strength

Below is a guide as to the scoring mechanism used to gauge the brand strength of this company:

A

The company enjoys an excellent level of brand strength.

  • This score signifies that the company has developed a highly regarded and well-recognised brand.
  • Customers and the wider community perceive the company as trustworthy, reliable, and superior to competitors.
  • The company enjoys a strong connection with customers, who actively engage with and advocate for the brand.
  • The company's brand effectively communicates its unique value proposition.
  • The corporate attracts and retains top talent, and its reputation extends beyond its target market.
B

The company has a good brand strength, indicating that it has a solid and respectable brand presence.

  • Customers generally have positive perceptions of the company.
  • While the company may not be as distinctive or well-known as the top brands, it still differentiates itself from competitors and enjoys a loyal customer base.
  • The brand inspires some level of customer engagement and advocacy.
  • The company attracts top quality employees and maintains a good reputation. People want to work there.
C

The business has an average brand strength, meaning it is neither strong nor weak in the marketplace.

  • Customers perceive the company as ordinary or run-of-the-mill, lacking an emotional connection or distinctiveness.
  • The company faces challenges in standing out among competitors and needs to better communicate its proposition.
  • Decent level of customer satisfaction, but significant there is room for improvement in terms of brand loyalty.
  • The company's reputation is neither a huge positive, or negative.
D

The company's brand is quite weak. Work required to increase its potential.

  • Customers have mixed or negative perception of the company, associating it with average or below-average quality.
  • The business struggles to differentiate itself from its competitors and lacks a compelling value proposition.
  • Customer engagement and brand loyalty may be minimal, requiring some effort to improve the brand experience.
  • The company's reputation may have encountered challenges, poor press, or may not be well-known in the market.
E

The company's brand is weak and fails to resonate with customers and audiences. This needs to be addressed.

  • Customers perceive the company as being too unreliable, lacking in quality, or irrelevant.
  • The company struggles to differentiate itself from competitors, and there is a lack of customer engagement, or loyalty.
  • The company's reputation may be tarnished or negatively perceived, hindering growth efforts.
  • Significant efforts are required to rebuild the corporate brand and establish a more positive image in the market.
F

The company has a severe lack of brand strength. It is a problem that needs addressing with urgency.

  • The company is poorly recognised, and customers have negative perceptions or zero awareness of its offerings.
  • The company fails to communicate its unique value proposition or inspire customer loyalty.
  • The company's reputation may be highly unfavourable, and attracting customers or top talent is challenging.
  • Immediate and extensive actions are likely necessary to revitalise the brand.

Brand Strength Score

Scoring brand strength is subjective because it relies on individual perceptions and interpretations of various factors, such as customer sentiment, market dynamics, and the competitive landscape, which can vary.

Using our scoring methodology, the average score of a business is calculated as being C (average). This differs from the average score of the top 10,000 businesses featured in our coverage. Weighted to that cohort, the average brand strength score increases to a B (good).

The analysis team have noted the following factors impacting its brand strength:

  • recognised as a major player in the financial industry, Bank of America is a household name in the US and around the world.
  • Having one of the largest customer bases in the US and a strong presence in international markets, Bank of America is a well-known and trusted financial institution.
  • Bank of America has a strong online presence with its mobile banking app and website, where customers can manage their finances and access services.
  • The Bank of America brand is associated with financial stability and security, and customers have faith in its services and products.
  • The Bank of America brand is also known for its commitment to corporate social responsibility and charitable giving.
  • Brand Strength Score: A

7Ps Marketing Analysis

The 7Ps of marketing are crucial components of strategic decision making for any organisation in any industry vertical.

Using the 7Ps in competitive analysis provides a holistic view of the marketplace, allowing businesses to refine their strategies, capitalise on competitors' weaknesses, and better meet consumer needs. The 7P's are defined as:

  • Product/Service
  • Price/Fee
  • Place/Access
  • Promotion
  • People
  • Physical Evidence
  • Processes

All these elements together frame an organisation's marketing mix, crucial for creating effective marketing strategies.

This 7P analysis is designed to provide a valuable insight into the business strategies of the company. It can be used to reveal strengths and weaknesses in their marketing mix, offering opportunities to compare and enhance a business.

1. Product/Services: Bank of America offers a wide range of financial products and services to its customers, including checking and savings accounts, credit cards, loans, investments, and insurance. These products are designed to meet the diverse financial needs of individuals, businesses, and institutions.

2. Price/Fees: Bank of America offers competitive pricing for its products and services, with fees and interest rates that are in line with industry standards. The bank also offers various fee waivers and discounts to its customers, making its services accessible and affordable.

3. Place/Access: Bank of America has a wide network of physical branches and ATMs across the country, providing convenient access to its services. In addition, the bank also offers online and mobile banking options, allowing customers to manage their finances from anywhere, at any time.

4. Promotion: Bank of America uses various marketing channels, such as television, print, and digital media, to promote its products and services. The bank also leverages its partnerships with other businesses and organisations to reach a wider audience and attract potential customers.

5. Physical Evidence: The bank's physical branches and ATMs serve as tangible evidence of its presence and credibility. In addition, the bank's website, mobile app, and other marketing materials also contribute to creating a positive image of the brand.

6. Processes: Bank of America has efficient and streamlined processes for opening accounts, managing transactions, and resolving customer issues. The bank also invests in technology to improve its processes, making it easier for customers to conduct their financial activities.

7. People: Bank of America employs a team of knowledgeable and skilled professionals who are trained to provide excellent customer service. The bank also values diversity and inclusion in its workforce, ensuring that it reflects the diversity of its customer base.

Potential Products

As part of this study, we have carefully examined and prognosticated a range of new products, services, or innovations that this organisation could potentially develop and introduce to strengthen its market position and respond to emerging industry trends.

Online budgeting tools: Bank of America could create an online budgeting and financial planning tool that helps customers manage their finances better. This could include budgeting calculators, savings goals, and other financial planning tools.

Credit monitoring and identity theft protection services: Bank of America could create a service that helps customers monitor their credit report and protect themselves from identity theft. This could include credit monitoring, fraud alerts, and other identity protection measures.

Investment services: Bank of America could create an investment service that helps customers invest their money in stocks, bonds, mutual funds, and other investments. This could include personalised advice and guidance from financial advisors.

Retirement planning services: Bank of America could create a retirement planning service that helps customers plan for their retirement. This could include advice on saving, investing, and other retirement planning strategies.

Online banking services: Bank of America could create a comprehensive online banking service that allows customers to manage their accounts, make payments, and transfer money. This could include bill pay, mobile banking, and other services.

Potential Synergies

Our proprietary product and portfolio-matching algorithm has identified the following organisations as having strong potential synergies with the company, based on strategic alignment, complementary capabilities, and opportunities for collaboration across markets or domains.

1. PayPal
2. Wells Fargo
3. Visa
4. Mastercard
5. American Express
6. JPMorgan Chase
7. Citigroup
8. Goldman Sachs
9. Morgan Stanley
10. Fidelity Investments

Porter's Five Forces

Developed by Michael Porter in 1979, Porter’s Five Forces is a model used to analyse industry attractiveness and evaluate competitive environments. It considers five forces:

  • Competitive rivalry
  • Supplier power
  • Buyer power
  • Threat of substitution
  • Threat of new entries

We include this framework because it supports strategic planning, investment decision-making, and long-term competitive positioning across industries by highlighting structural pressures, market threats, and potential profit constraints.

In terms of Bank of America, the company has a strong competitive position. The company has a large market share, a strong brand, and a large customer base. Additionally, the company has a strong financial position and a diversified business. However, the company faces some competitive threats. The first is the threat of new entrants. There are a number of businesses that are looking to enter the banking industry, and Bank of America faces the risk of losing market share to these new entrants. Additionally, the bargaining power of buyers is strong. Customers have a number of choices when it comes to banks, and they can easily switch banks if they are not satisfied with the service they are receiving. Additionally, the bargaining power of suppliers is strong. Banks rely on a number of different suppliers, and if these suppliers were to increase prices, it would put pressure on banks' margins. Finally, the intensity of competitive rivalry is high. There are a number of large banks that compete for market share, and this intense competition can lead to price wars and other forms of competition that can hurt banks' profitability.

PESTLE Analysis

A PESTLE analysis is used to evaluate external factors affecting an organisation. It examines (1) Political; (2) Economic; (3) Social; (4) Technological; (5) Legal; and (6) Environmental influences. This framework helps businesses identify potential risks and opportunities in the macro-environment, supporting informed decision-making, strategic planning, and long-term sustainability in dynamic markets.

Reasons to use a PESTLE include:

  • Environmental Scanning: PESTLE helps assess external factors, keeping executives aware of key forces
  • Strategic Planning: It identifies opportunities and threats, aiding market alignment and goal-setting
  • Risk Assessment: PESTLE highlights risks, helping businesses develop mitigation strategies
  • Market Insights: It provides insights into trends, behavior, and regulations for better strategy development
  • Business Adaptation: Regular analysis allows businesses to stay competitive by adapting to changes

Below is the PESTLE analysis for this company:

PESTLE Analysis: political, economic, social, technological, legal, environmental

CATWOE Analysis

CATWOE

The CATWOE analysis helps businesses understand stakeholders' perspectives for informed decision-making, covering six elements:

  • Customers: Beneficiaries of the system’s outputs
  • Actors: Those who influence the system’s functionality
  • Transformation: Converting inputs into value-creating outputs
  • World View: The broader context behind the system’s existence
  • Owner: Decision-makers with authority over the system
  • Environment: External factors impacting the system

The CATWOE analysis is most effective when used alongside a SWOT analysis.

SWOT Analysis

This SWOT analysis is a strategic planning tool used to assess the strengths, weaknesses, opportunities and threats of the Bank of America business.

When creating this SWOT the team at Platform Executive have taken into consideration the corporate strategy; brand; key financials; the competitive landscape; along with the products and/or services offered.

To offer increased context for future innovation and product development we also consider the historical context for the business and industry; and perceived direction of travel.

Upon researching the company, we have uncovered a number of strategic and operational strengths, weaknesses, opportunities and threats.

SWOT Analysis: strengths, weaknesses, opportunities, threats

Strengths

The strengths of a company refer to its internal attributes or capabilities that provide it with a competitive advantage.

Below is a list of the key strengths we have identified for the business:

1. Bank of America has a strong brand name and reputation.

2. Bank of America has a large customer base and a large network of branches and ATMs.

3. Bank of America offers a wide range of financial products and services.

4. Bank of America has a strong financial position, with strong asset quality and capital ratios.

Opportunities

Opportunities refer to factors that present potential avenues for growth, advantage, or improvement for an organisation.

Below is a list of opportunities we have identified for the business:

1. Increase operational efficiency: Bank of America should focus on increasing operational efficiency through investments in technology and automation. This will help reduce costs and increase the speed of services. Additionally, the bank should look for ways to streamline processes and reduce manual intervention, leading to greater accuracy and faster turnaround times.

2. Expand digital banking offerings: Bank of America should focus on expanding its digital banking offerings to attract and retain customers. This can include mobile banking, online banking, and other innovative banking solutions. Additionally, Bank of America should focus on providing a seamless user experience through superior customer service and an intuitive user interface.

3. Increase customer engagement: Bank of America should focus on increasing customer engagement by offering personalised services and products. This can include rewards programs, loyalty programs, and customised financial advice. Additionally, the bank should focus on providing a better customer experience across all channels, including branches, online, and mobile.

4. Increase customer acquisition: Bank of America should focus on increasing customer acquisition by offering competitive rates and attractive incentives. Additionally, the bank should focus on leveraging data and analytics to target potential customers with customised offers. This will help the bank acquire new customers while also retaining existing customers.

Weaknesses

The weaknesses refer to factors that hinder a company's performance or competitive advantage.

Below is a list of the weaknesses we have identified for the business:

1. Lack of customer focus – In 2017, Bank of America was ranked last in customer satisfaction among big banks by the American Customer Satisfaction Index. The bank has been criticised for its lack of focus on customer service, with some customers complaining of long wait times, difficulty getting in touch with customer service representatives, and unhelpful staff.

2. High costs – Bank of America has been criticised for its high fees, including ATM fees, overdraft fees, and account maintenance fees. The bank has also been accused of nickel-and-diming customers with small charges that add up over time.

3. IT problems – Bank of America has been plagued by IT problems in recent years, resulting in customer data breaches, outages, and system errors. In 2017, the bank suffered a major data breach that affected more than 50 million customers.

4. Poor risk management – Bank of America has been criticised for its poor risk management practices, which were exposed during the financial crisis. The bank was one of the largest lenders to subprime borrowers and was one of the hardest hit during the crisis.

Threats

The threats to an organisation refer to factors that pose challenges or risks to a company's success.

Below is a list of the threats we have identified for the business:

1. Increasing competition in the financial services industry: Bank of America faces stiff competition from other banks and non-bank financial services companies, such as FinTech start-ups. This competitive pressure can make it difficult for Bank of America to increase its market share and retain its existing customers.

2. Heightened regulatory burden: The banking industry is highly regulated, and Bank of America is subject to a variety of federal and state regulations. In addition, the implementation of the Dodd-Frank Act has resulted in increased scrutiny and compliance costs for the bank.

3. Cybersecurity threats: Cybersecurity threats are on the rise and have the potential to cause significant financial damage to Bank of America. As such, the bank must stay abreast of the latest cyber threats and invest in the necessary technology to protect its customers’ data and financial assets.

4. Geopolitical uncertainty: The global economy is increasingly volatile and unpredictable. Bank of America operates in multiple countries, and geopolitical uncertainty can have a direct impact on its operations and financial performance. For example, the bank could face increased costs due to exchange rate fluctuations or restrictions on its operations in certain countries.

5C Analysis

The 5C Analysis is a marketing framework that can be used to provide insight into the key drivers of success, as well as the risk exposure to various environmental factors.

This (concise) 5C analysis examines the external and internal environment for Bank of America. It includes analysing the company's customers, competitors, collaborators, context, and capabilities. We have produced this short analysis to identify potential opportunities and threats to Bank of America, as well as areas where the company needs to improve its operations or strategy.
Company: Bank of America is one of the largest banks in the United States. It offers a variety of financial services including banking, lending, investments, insurance, and wealth management. It has over 4,400 banking centers around the United States, as well as presence in more than 40 countries.

Collaborators: Bank of America works closely with its partners to provide the best services to its customers. It collaborates with companies such as Merrill Lynch, US Trust, and American Express to offer a wide range of products and services.

Customers: Bank of America’s customers include individuals, businesses, and institutions. It offers services such as consumer banking, business banking, and wealth management. It also provides loans and other financial services.

Competitors: Bank of America’s main competitors include JPMorgan Chase, Citibank, and Wells Fargo. These banks offer similar services, though Bank of America has greater presence in the US

Content: Bank of America provides customers with the latest financial news and advice. It also offers tools such as budgeting and savings calculators to help customers better manage their finances. Bank of America also provides resources such as podcasts, videos, and articles to educate customers on financial topics.
5C Analysis: company, customers, competition, collaboration, climate

MOST Analysis

MOST Analysis: mission, objectives, strategy, tactics

The MOST analysis framework is used to identify an organisation's strategic goals, assess its strengths and weaknesses, and develop a plan to achieve its objectives. The MOST analysis helps executives focus on what they want to achieve and how to achieve it, while also identifying potential roadblocks or obstacles.

  • Mission defines the organisations purpose and core values, providing a clear direction and inspiration for stakeholders
  • Objectives are specific, measurable targets that support the mission; they indicate what the organisation aims to achieve within a defined timeframe
  • Strategy outlines the high-level approach the organisation will undertake to reach its objectives, detailing how resources will be allocated and initiatives prioritised
  • Tactics are the actionable steps and specific plans that implement the strategy, ensuring that all team members understand their roles in achieving objectives

We have created this analysis from a 3rd person perspective.

Innovation Scorecard

The team at Platform Executive assesses and then benchmarks businesses and the industry verticals in which they operate using a proprietary scoring mechanism designed to benchmark innovation.

First, we allocate a score of A-E for the industry, based on the key organisations operating within the space; and then score the individual organisation using a 1-5 score.

A score of D-E within an industry means that it is potentially ripe to be disrupted by a new entrant; and/or vulnerable to technological change.

Likewise, a high score of 4-5 for the company in question indicates that it lags behind notable businesses in terms of innovation and product pipeline.

Below is a guide to each score:

Innovation Scorecard

Industry Score:

A The industry is amongst the most innovative; with the leading players all driving the sector forward.
Example industry: PaaS
B The industry and its leading players have a good track record of innovation; and can quickly react to change.
Example industry: Pharmaceutical
C Companies operating within the sector have adequate levels of innovation; and engage in R&D activities when appropriate.
Example industry: FMCG
DBusinesses operating in the industry do not invest enough time and resource into innovation. The sector is stagnant and a good candidate for disruption.
Example industry: Retail Banking
E The major players in the sector seem to lack suitable product development roadmaps; and as a result the sector is highly vulnerable to industry change.
Example industry: Publishing

 

Company Score:

1 The business is amongst the leading players in terms innovation and product pipeline. This will fulfil and reinforce the operations of the business in the medium to long-term.
2 The business has a good track record of innovation, in terms of its products and/or its business model. It is therefore more likely to be able to react and adapt to any changes to the industry.
3 The business is deemed to have an adequate innovation plan, build on research and development and sustainability where appropriate. The business has a product development strategy.
4The business needs to invest more resource and/or intellectual capital in product development, pipelines and/or its business model. The business is at risk of stagnation.
5 The business seems to lack a suitable product development roadmap; and as a result is vulnerable to any notable industry change and/or new entrants in the marketplace.
The team at Platform Executive has judged Bank of America as having an innovation score of B3.

Appendices

The appendices section of this report contains supplementary information that we deem helpful in providing a more comprehensive understanding of the report.

Methodology

This study on Bank of America forms part of our series of competitive intelligence reports, which focuses on 10,000 of the largest corporates.

The report is based on information and learning from the following sources:

  • Corporate websites
  • Proprietary research databases
  • SEC Filings
  • Corporate press releases
  • News articles
  • Financial data API's
  • Product-matching algorithm

Further Reading

More Information

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Disclaimer

All Rights Reserved.

Reproduction of the content produced in this report is prohibited without the prior permission of the publisher, Platform Executive Pty Ltd.

The facts of this report have been gathered in good faith from both primary and secondary sources. It is believed to be correct at the time of publication, but cannot be guaranteed. As such Platform Executive can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.

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