Detailed Business Strategy Report: JP Morgan Financial Services

This report provides a comprehensive business strategy analysis of JP Morgan, a leading investment bank and financial services company. It begins by examining the influence of the macro-environment on JP Morgan using PESTLE analysis, evaluating political, economic, social, technological, legal, and environmental factors. The report then delves into the company's internal environment and capabilities, employing SWOT and VRIO frameworks to assess strengths, weaknesses, opportunities, threats, and valuable, rare, inimitable, and organized resources. A Porter's Five Forces analysis assesses the competitive landscape. Finally, the report applies various strategic theories and concepts to formulate a strategic plan, offering insights into JP Morgan's market position and future direction.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
LO 1.................................................................................................................................................3
P 1 Influence of macro environment over the company.........................................................3
LO 2.................................................................................................................................................5
P 2 Internal environment and capabilities..............................................................................5
LO 3.................................................................................................................................................8
P3 Porter five force model......................................................................................................8
LO 4...............................................................................................................................................11
P4 Applying range of theories and concepts........................................................................11
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
Business strategy is defined as some actions and plan which the business uses in order to
run the business in successful manner. In this competitive world it is very necessary for the
companies to work in effective manner. This is pertaining to the fact that if the company uses
effective strategy then they can face the competition and sustain the market (Till and Eagleeye,
2017). The present report will outline the different business strategy option for JP Morgan which
is an investment bank and financial service company headquartered in New York.
The present report will start by outlining the external forces and its impact and influence
over the operations of the company. Further the report will discuss about the internal
environment of the company and the capabilities which the company has. Next the discussion
will highlight the competitive position of the company and the market sector of the company. in
the end some of the theories and models will be applied and a strategic plan for the company will
be outlined.
MAIN BODY
LO 1
P 1 Influence of macro environment over the company
The business operates in a dynamic environment wherein there are frequent changes taking place
which may be positive or negative for the company. Thus, it is essential for JP Morgan to
evaluate all these factors and analyse its impact over the business. For this the model of PESTLE
analysis is used. This model is used at time when the company wants to learn about the changes
in the external forces and its impact over the working of the company. Political factors- the political factors include the changes within the government
regulations, political parties and its impact over the company. This factor impacts the
working of a company to a great extent because all the banking regulation and guidelines
are prepared by the central bank and the company has to abide by all these. For JP
Morgan the political stability is there and there are not many changes in the political
structure of USA and this is beneficial for the JP Morgan as they do not have to make
much changes in their working pattern. Economic factors- this includes the changes taking place within the economy of the
country (Sia, Soh and Weill, 2016). This factor also influences the working of the

company because the company runs in accordance with the economic system running in
the country. For JP Morgan the interest rate of loan is decreasing and this is an
opportunity for Morgan because of the fact that now more of the people will take loan
and this will increase the income of the bank. Also, currently there is inflation within the
economy and this is also an opportunity for the bank (Perera, 2017). This is because of
the reason that in situation of inflation the prices are high and for the consumer to meet
the basic demands need to take loan from the banks and this increases the income of JP
Morgan. Social factors- this includes the attitude and beliefs and thinking of the people of the
society. This is also need to be considered because of the fact that this also impact the
working of the company to a great extent. Currently the trend of people within the society
has increased towards the use of heavy priced and latest technology and other gadgets
(Perera, 2017). But the income level of the people has not increased and for this they take
huge loans to cater to the need of leisure and luxury life. Thus, this is an opportunity for
the company as this will increase the loan amount for JP Morgan and will increase its
interest income. Technological factors- this factor includes all the changes which are taking place within
the technological sector. There are many advancement taking places within the
technological sector which need to be adapted by JP Morgan. Adopting these
advancements is an opportunity for JP Morgan as this will assist bank in simplifying its
working and operations with help of technology (Christodoulou and Cullinane, 2019).
The latest technology is like artificial intelligence, chatbots, blockchain technology,
mobile and digital banking and many others facilities. Legal factors- this is also an important factor which may impact the working of the
company. This is because of the fact that the bank deal in finance of many people and
business organization and any mistake can result in huge financial losses (Rastogi and
Trivedi, 2016). Thus, for this there are many laws and regulations being made and which
need to be abided by the bank. Hence, compliance with the different laws will help the
company in creating trust among the people transacting with the bank.
 Environmental factors- this is also an important factor which need to be taken into
consideration for the successful running of the banking operations (Zahari and Romli,

2019). This has no link with the business transaction but if the company will pay
attention towards the environment and its protection then this will increase the market
share of the company. This is majorly because of the reason that the consumer trend is
towards the protection and safeguarding of the environment and this is an opportunity for
Morgan to increase the consumer base.
In the end it can be concluded that PESTLE analysis is very helpful for the company in analysing
the impact of the changes within the external environment and how JP Morgan will deal with it.
LO 2
P 2 Internal environment and capabilities
With the analysis of external analysis, it is also necessary for JP Morgan to analyse and
evaluate all its internal environment (Gürel and Tat, 2017). This is done to ensure that whether
the company is able to adapt to the external changes effectively or not. Also, the internal analysis
will help the company in identifying the areas in which they excel and the areas in which they
need to develop. For these two models are being used by JP Morgan that is SWOT and VRIO.
The SWOT is used in order to analyse the strengths and weakness of the company and the VRIO
helps in identifying the capabilities of the company.
SWOT- this is an important model of analysing the internal environment of the business
and this is necessary because of the reason that there are frequent changes within the macro
environment. Thus, these changes have impact over the internal working of the company. Thus,
SWOT analysis help the company in analysing and evaluating the changes in the internal
strength and capabilities. Strength- this is defined as the areas in which the company is good and efficient in its
working and profitability. The major strength of JP Morgan is that it has a strong brand
position within the market and has a global presence. This is a strength because of the
fact that this increases the consumer base for the company. Another strength is that the
company has strong liquidity and capital which makes the bank in position to provide
cash at any time of the day (Gupta, Gupta and Gupta, 2019). The liquidity is the
capability of converting the asset into cash and this is good in JP Morgan. Weakness- these are the weak points which degrades the working capacity of the
company and the employees. The major weakness of JP Morgan is that the expenses of
the company is increasing and weakening the profitability of the company. Another

major weakness of JP Morgan is that the company is over dependent on some of the
market. These markets are North America and the US for majority of its earning. If there
is slow down in the economy of these country then the profitability of the company will
also decrease (Shi, 2016). Opportunity- this includes the areas in which the company can grow by undertaking the
opportunities and changes present in the business environment. The major opportunity for
JP Morgan is expansion in other countries. This is an important opportunity because of
the reason that this will increase the market share and the consumers. as a result of this
the overall profitability of the company will increase (Vargas-Hernández and Garcia,
2019). Another opportunity for the company is to adopt to the latest technology which is
coming in the environment such as block chain, crypto currency, chatbots and many
others. Threat- this is defined as the factors which degrades or harm the working capability of
the company. the major threat for JP Morgan is the high and intense competition. This is
the most important threat which is faced by JP Morgan and which affects the working of
the company to a great extent. Another threat is the protection of the data of the
consumers. This is also a major threat because of the reason that in current competitive
world cybercrime are increasing and there may be theft of confidential data of the
consumers.
VRIO- this is an analytical model which is applied by the companies in order to evaluate
the resources of the company and to ensure that whether the resources provides a competitive
advantage to the company or not. Also, this model outlines the capabilities of the company
which make them different from the other competitors.
 Value- the valuable resources of JP Morgan are like financial resources, employees and
the cost structure of the company. This is because of the reason that all these resources
add value to the working of the company and fosters the productivity of the company.
Also, the research and development department are of value because it outlines all the
necessary changes taking place within the market and environment.
 Rarity- these are the resources which are rare to the company and JP Morgan includes the
distribution network, financial resources, patents and employees. These are rare because

of the reason that these resources are basic to every financial company and thus every
company need these resources.
 Imitability- these are the resources which can be imitated by the other competitors and
can be used by them (Ariyani and Daryanto, 2018). For JP Morgan the imitable resources
are the one like the cost structure, employees, patents and financial resources. The cost
structure is imitable because JP Morgan has a very effective cost structure and every
competitor need to adopt to this.
 Organization- just arranging for the resources is not enough rather it is very important for
the company to properly organize the resources so that they are efficiently used
(Yudiono, Wilopo and Iqbal, 2019). The properly organized resources of the company
are the financial resources, employees, cost structure, research and development are the
organized resources.
Resources Value Rarity Imitability Organization
Financial
resources
   
Employees    
Distribution
network

Cost structure    
Patent  
Research and
development
 
In the end it can be concluded that the financial resources, employees and the cost
structure are the major capabilities of JP Morgan as these resources meet all the four criteria’s of
VRIO that is value, rarity, imitability and organization. Also, it is concluded that SWOT analysis
is helpful for the company in order to know what are their potential strength and weak points of
the company.

LO 3
P3 Porter five force model.
The company JP Morgan faces higher competition at market place because in the market
place already have various financial company which provide various better services to their
customers. In order to analysis the competitive era of company here is apply Porter's five force
analysis which is as follows:
Porter five forces analysis:
A porter five force analysis is the business analysis tool which is examine relative
strength of five primary forces that are govern higher level of competition within the industry.
This creates a higher opportunity for company in their competitive era. This model is implements
in JP Morgan is determine the strongest force which the company must take account are
competition from rivals in the industry (Safari, Farhang and Rajabzadehyazdi, 2016). This
includes five forces which are explains below:
Bargaining power of suppliers (low):
In the banking and financial sector have two main suppliers who are the depositor and
employee both are main resources of company. In respect to depositor, the situation is essentially
same as that represented as bargaining power of customers. As per that company have approach
to deal with the marketing force which is gain work to attract new clients as well as increase
depositors hold funds. Through that suppliers are lesser force for company.

Bargaining power of customers (strongest):
The customer has strongest power to which can influence the whole industry. In the
banking sector customers have various option to switch and move to another bank by closing
their accounts. However, the bargaining power of consumer is greater which cannot afford to
suffers defections of depositors. This creates the negative impact on customers and company if
company is not providing a proper facilities and customers services. In that case, JP Morgan
address those issues of customers bargaining power primarily by extending new customers
towards company but it is also difficult to attract new customer (Min, Liangwen and Yue, 2018).
As per this, bargaining power of customers is strongest force which affect to JP Morgan.
Threat of new entrants (low):
Threat of new entrants is the significant force within the banking industry which have a
very low impact on company. In the banking sector new companies are come with new plans and
Illustration 1: Five force model
(Source: Porter's Five Forces, 2018)

offers but customers are not easily trust them because already exists bank have and build good
image at marketplace (Porter's Five Forces, 2018). On the other side, the new entrants are
massive amount of capital and longer time to build trust of customer and image. As per that, this
factor not put any negative impact on company because this have lower force on industry and JP
Morgan.
Threat from substitute product (strongest):
In the baking industry have various companies and bank who are provide various services
and financial services to customers in effective manner. As per that companies outside the
industry have begun to offer specialized financial services which were traditionally available
from bank. In any problematic situation customers switch from company and then it gives
negative impact through this analysis it has have been prove that threat from substitute product is
strongest force which can give negative impact on company (Dawes, 2018). In that JP Morgan
responded with proper initiatives which includes division focusing small business leading.
Competitive rivalry (strongest):
Competition within the industry gives a higher impact on business which is created
negative impact on business because competition is very high. JP Morgan faces intense
competition domestically from the other three major money banks and globally from other larger
multinational companies in effective manner (Varelas and Georgopoulos, 2017). The main
competitors of JP Morgan are HSBC and Barclays bank. As per that, competitive rivalry has a
strongest force on industry and company. In that company deals with industry competition in
attempting distinguish itself in the market on the primary basis for long term recognition.
The above is analysis of Porter five force for analysis higher force of company. As per
this analysis, Competitive rivalry, threat from substitute product and bargaining power of
customers have strongest force on JP Morgan company. In order to analysis the growth
opportunities for company here is use Ansoff matrix are as follows:
Market penetration: in this company make strategy to sell more existing products in
existing customer base. This is the best for primary success for company (Schawel and Billing,
2018). In that company can provide a discounts coupon to their loyal customer and also reduce
their order processing time in effective manner.
Market development: market development is another tool which is also help to develop
sales and profit of company in effective manner by making greater strategy which company can

fount the online market when they launch their site for customers. This create great opportunities
in the market and existing customers segment for higher growth of company.
Product development: the product development is help to make a positive and
effectiveness for company because in that companies are able to take better decision for
company by producing better product and services for company. In that company JP Morgan can
provide online transactions facilities and wallet cash transfer facilities. This help to give higher
competitive advantage by attracting more customers in effective manner.
Diversification: the diversification is get into the new market by launching new product
and services at the market place (Bell, Dyck and Neubert, 2017). The company JP Morgan is the
biggest financial services provider in the market place. Through that company have greater
opportunities to achieve higher goals and objective. In this company can enter in new market
with new product and services is help to increase their competition at market place in effective
manner.
As per that the best option for JP Morgan is product development because present higher
customers base is go with online transactions. This is the best and effective option because
present days more customers and people are like to use online transaction for paying their
shopping bills and others. This help to create higher advantage for company.
In the end it is concluded that the JP Morgan need to use the strategy of product
development as this is more helpful for company in gaining competitive advantage over other
companies.
LO 4
P4 Applying range of theories and concepts.
Vision: Aspire to be the best, execute great team and winning the culture.
Mission: To bring together people and product in all concerns of the globe and to provide the
best financial services to customers.
Objectives:
 To be the most respected financial services provider in the world by satisfying need of
customer.
 To include the higher promotional and advertisement channel for promote their product
and services at marketplace. Increase sales and profit margin of company till the end of 2020.

Strategies
Here is apply the different theories and concept for understand what is beneficial for JP Morgan
at market place (Bertozzi, Ali and Gul, 2017). For that here is use Porters generic force and
Bowman strategy are as follows:
Porters generic strategies model:
This is involving two basic types of competitive advantage which is the combination with
the scope of activities for that companies are more seeks to achieve them in effective manner. All
of this is help to achieve by reducing costs of product for organization competitors in respective
manner.
Cost leadership:
This strategy is involves gaining a competitive advantage by lowering cost. This is the
main generic strategy in various customer market. The cost advantage sources are highly based
on the structure of industry. This include economic growth, property technology. In that
Illustration 2: Generic model strategy
(Source: Porter's Generic (Competitive) Strategies, 2016)

company can extent market share by targeting the middle class. This can provide cost advantage
to JP Morgan.
Differentiation:
This is another aspects of generic strategy in which company can use the more
effectiveness (Haselwanter, Muskat and Zehrer, 2016). This strategy is allowing to company to
expand their business in another market with unique feature in product. This help to provide
advantage to company in effective manner.
Focused strategy:
This help to make focus on competitive strategy which encourage companies to proper
focus on their resources. In respect of cost focus strategy, company can reduce price of product
and offers best values. This help to attract those customers who are not able to purchase higher
price of products and services at marketplace. On the other side, differentiation focus strategy is
providing new products for customers which is help to build branding of company at market
place. This help to attract all over market because company have great target to all people by
differentiate products at marketplace.
The company JP Morgan is adopting differentiation strategy by offering new product
with new features to attract more customer in effective manner (Desai, 2019). Also use Bowman
strategic clock model.
This model is exploring the options for strategies position for company in effective
manner. This include 8 aspects in their model which illustrate for business have variety of
opportunities and growth factors to expand and increase sales or effectiveness of company are as
follows:
Low price and low values: this is not providing a proper competitive advantage for
company and not differentiate and customers perceive. This allow to JP Morgan to reduce price
of services and provide lower values to customers.
Low price: business position looks to be low cost leader in market. In that company
minimise price of product and profits margin of each product and services are low, but have the
high volume of output which help to generate higher profit.
Hybrid: in this company have right to add some lower price products but also little
products are differentiating (Safari, Farhang and Rajabzadehyazdi, 2016). This have effective
aim is to add value with combination of reasonable and product differentiation.

Differentiation: aim of this strategy to make positive brand image of company at market
place by launching high quality of product and loyalty (Bowman's Strategic Clock (Strategic
Positioning), 2017). This help to achieve goals and objective of company in effective manner.
Focused differentiation: strategy aim is to position a product at higher price level at
their customers are buy that product because of the high perceived values. This is best position
strategy adopted by luxury brands in effective manner.
Risky High margin: in this business and companies are sets higher price of product
without providing and offering extra to customers. Like if customers are purchase this than profit
is also higher and increased and not buy that then profit is lower. This is the short term strategy.
Monopoly pricing: in the monopoly market companies are only offers product and
services to customers for more growth of company (Min, Liangwen and Yue, 2018). In that
company is not concerns needs of customer only make focus on sales of product.
Loss of market share: This allow to JP Morgan to reduce and sets middle range of
market share for price for a product with low values unlikely to win customers is the better
option.
Illustration 3: Clock strategy
(Source: Bowman's Strategic Clock (Strategic Positioning), 2017)

As per the both model analysis company need to make proper and effective needs. With
the help of those JP Morgan is able to find the better growth option for company. For that here is
include recommendations for JP Morgan are as follows:
Remanded for company to use differentiation strategy with porter generic strategy
(Dawes, 2018). On the other side, as per Bowman strategy model JP Morgan should offers wallet
and online transactions facilities to customers for gaining higher competitive advantage.
Tactics:
Elements Description
Product This includes the product in which JP Morgan
deals like investment banking, all types of
financial services, treasury services, private
banking, brokerage, wealth management, asset
management and many other products.
Price The price used by JP Morgan is competitive
pricing and under this the company first
analyses the strategy of other competitors and
then set the prices of product and services of
company.
Place This has many different types of physical
stores in form of bank and also has option of
online banking.
Promotion For this JP Morgan uses the latest techniques
of digital marketing in order to attract more of
the consumers to come to the bank.
Implementation:
Implement by generating new mobile app for online transactions which JP Morgan app.
Provide complete details to customer about apps like how to uses and complete transaction.
Evaluation:
review and controlling is the best process for oversees the task and work at marketplace
because that is necessary to ensure about the implementation is approved by customers or not.

This process helps to find mistakes in process work in respective manner (Schawel and Billing,
2018). For controlling and review company take feedback from customers and take views about
product is best or not. This help to attract more customers because they think company provide
services as per their needs.
CONCLUSION
From the above study it had been concluded that the business strategy has help to create
higher competitive advantage for company. For that company have need to analysis external,
internal and capacity of company in effective manner by using PESTEL, SWOT and VIRO
model. Those helped to give proper analysis of company. Through that company got idea of
market and strength and weakness. On the other side, in continue to that company need to
analysis competitive advantage for company in that report presented the Porter five force
analysis model. This helped make sure about those factors which gave higher force on company
which has bargaining power of customer, competitive rivalry and threat from substitute product.
Here has also used ANSOFF model to analysis the strategic growth of company. To analysis the
growth market for company report has used Porter generic and Bowman strategy model. The
porter generic model has helped to analysis competitive advantage with cost, differentiation and
focused strategy. Through that here has recommended for company to use differentiation
strategy by using strategic management plan. At the end of report here has also produce strategic
management plan by including vision, mission, objective, tactics, strategy, budget and
implementation as well as controlling.

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