Strategic Analysis of JP Morgan: Macro Environment and Capabilities

This report provides a detailed analysis of JP Morgan's business strategy, exploring the influence of the macro environment through PESTLE analysis, which examines political, economic, social, technological, legal, and environmental factors. It then assesses the internal capabilities of JP Morgan using SWOT and VRIO frameworks, evaluating its strengths, weaknesses, opportunities, and threats, along with its resources and competitive advantages. The report further applies Porter's Five Forces model to understand the competitive dynamics within JP Morgan's market sector. Finally, it discusses models, theories, and concepts underpinning strategic planning within the firm, offering a comprehensive view of JP Morgan's strategic approach to achieving its business objectives. The report highlights key aspects of JP Morgan's strategies and provides insights into its operational and planning processes.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Applying framework for analysing influence and impact macro environment on selected
firm and its strategies..............................................................................................................1
TASK 2............................................................................................................................................3
P2 Capabilities of selected firm using particular frameworks................................................3
TASK 3............................................................................................................................................6
P3 Porter's Five Forces Model in context with market sector of an organisation..................6
TASK 4............................................................................................................................................8
P4 Models, theories and concepts for underpinning strategic planning within the firm........8
CONCLUSION..............................................................................................................................10
REFERENCE.................................................................................................................................11

INTRODUCTION
Business strategies could be understand as the several course of action which is used to
make proper decisions through entrepreneurs in order to achieve appropriate targeted goals and
objectives. On the other hand it is well known as a backbone of business as well as organisation
that leads objectives favourably. Thus, aim of business strategy is to always achieve high
position at marketplace within firm with best and effective tools. Therefore, business strategies
always used by the business person for make their future successful and attract large number of
people at marketplace. This assignment is based on JP Morgan which is one of the best
American multinational investment bank as well as financial services organisation which is
headquartered in New York City. On the other side, it is well known sixth largest bank in US that
have large number of assets (Veit and et. al., 2014). Moreover discussion will be based on impact
of macro environment on the organisation and their business strategies. Along with this, there are
large number of capabilities of internal environment of firm. Lastly, there will be Porter's Five
Forces model within market sector and several kind of theory as well as models will be used
properly.
TASK 1
P1 Applying framework for analysing influence and impact macro environment on selected firm
and its strategies.
Herein, PESTLE analysis will get discussed which is considered as on of the better tool
used to measure different types of environment within marketplace. With the help of this firms
are able to know their market position and how they can achieve their goals or objectives in a
perfect way. Herein, P stands for Political E for Economical, S for Social, T for Technological, L
stands for Legal and E stands for Environmental. This analysis in context with JP Morgan going
to be discussed below:
Political factor: This factor directly have impact on financial services and businesses of
firm because of government rules and regulations (PESTLE Analysis of JP Morgan. 2017). In
reference with Morgan it always provides several kind of financial services and able to operate
its business successfully. There are several rules and legislation which are developed by
government and should be followed by Morgan. By following rules and regulations this
company can serve its better services and able to achieve its targeted goals in a perfect way.
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Economical factor: This factor of respective analysis is based on financial sector that
could be population growth, money crisis, rate of unemployment along with urbanization rate as
well. Herein, JP Morgan is needed to follow on these assorted factors to earn huge profits to
overcome these assorted issues from an organisation. In addition to this, these sorts of factors
will help respective organisation for effective design of interest rates, economic policies and
many other financial services which is provided by them. Therefore, JP Morgan has to focus on
these assorted factors for better contribution to successful growth of economy.
Social factor: According to this factor JP Morgan needs to concentrates on several sorts
of socio-cultural values of overall customers (Laudon and Traver, 2016). As they have large
number of competitors such as Bank of America, Barclays and Citigroup and so on. In order to
give better performance towards work through beating these assorted institutions, JP Morgan
needed to approach different types of current and future trends so that they can give huge
services to their customers which is essential for firm to gain high goals and objectives.
Technological factor: Communication with the customers within modern technological
area is most important part of every business to achieve desired goals and objectives. In relation
with JP Morgan they are needed to pay attention on promotional campaigns in order to develop
people awareness among several services which is provided by them. Herein, technological
advancement is an essential aspect for banking services should be applicable like credit cards and
different types of payment methods. Further Improvement, JP Morgan needs to bring such kind
of latest techniques by which they can can satisfy large number of people and able to provide
more better services.
Legal factor: It includes different types of financial transaction charges, fixed interest
rates, saving interest, loan amounts and so many rules and regulations in regards with those
needs which should be adopt by JP Morgan in order to to manage their entire services which is
made by them. As JP Morgan is providing financial services and investment services so that
there is no legal activity and they can give their best in an effective manner (Lawton, 2017).
Environmental factor: According to this factor, JP Morgan is required to focus on
different types of environmental factors that influence their business activities. For this, they
need to focus on them through using ecological aspects of business. It will help firm to attain
their desired goals towards market share within financial services firm. Thus, firm is needed to
have few aspects to overcome errors from an business organisation.
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TASK 2
P2 Capabilities of selected firm using particular frameworks.
For evaluating overall situation of internal environment in JP Morgan, VRIO & SWOT
analysis are very helpful for them to analyse their working capabilities at workplace, those are
going to be discussed below:
SWOT:
Strength Weakness
 JP Morgan has strong brand image at
marketplace as it has very good
financial position, so that they can
achieve their goals or objectives in an
appropriate manner. With the help of
this they can achieve its customer's
goals (Peng, 2017).
 This company has effective presence
worldwide. They have around 250,000
of employees at workplace across the
globe. With the help of huge
employees they are able to increase
firm's value as well as productivity
that attract the most.
 This financial industry have excellent
services for its customers. Thus, they
have huge networks of retail which is
helpful for them to gain huge sales
and revenue.
 It has so many competitors at
marketplace so that it could be
difficult for them to deliver such kind
of financial services as other
industries are doing. This situation
develop competition.
 JP Morgan has over dependence on
US which is not so good for better
future.
 Fluctuating market always gives
negative results. Within the JP
Morgan such kind of market shows
their instability and have negative
impact on customers.
Opportunities Threats
 This organisation has opportunity for
investments across the globe through
providing large number of services to
 While government bring huge changes
within the functions and operations
like applying new rules and
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its customers in a perfect way.
 It has chance to expand its market in
another countries by which they can
bring more improvement in their
services and able to achieve their
goals.
 With the help of diversification
portfolios they have opportunities to
makes potential customers and they
can provide them financial services in
a more better way (Klettner, Clarke
and Boersma, 2014).
legislations are the biggest threat of JP
Morgan that could bring problems like
money crises as well as recessions and
many other.
 There are lots of competitors, within
the US there are such kind of bank
who proving same services as JP
Morgan so this sort of situation can
create complexities at workplace.
VRIO Model:
In order to understand firm's capabilities VRIO model is one of the best way to measure
capability. In reference with JP Morgan this model is going to elaborate below:
Factors Valuable Rarity Imitable Organized At last, what
is the result?
Low interest
loan
✓ ✓ ✕ ✕ Partially
Database
management
✓ ✓ ✓ ✕ Comp.
Advantage
for the
general
basis.
Employees ✓ ✓ ✓ ✓ Competitive
advantage.
Global
presence
✓ ✕ ✕ ✕ competitive
Disadvantag
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es.
There are several kind of factors such as employees, database management, global
presence and low interest loan, those are mentioned below:
Valuable
It generally describes about different types of opportunities which all are based on overall
capabilities of firm to achieve desired goals as well as objectives. There are few valuable factors,
that are:
Global presence: JP Morgan has effective global presence into the international markets.
With the help of this valuable aspect they can achieve its goals.
Database management: Within this financial industry there are different types of
software or data which is used by JP Morgan to achieve desirable goals.
Low interest loan: It is very effective service which is given by JP Morgan by which they
build strong relationship with customers.
Employees: JP Morgan has large number of employees so that they could achieve its
targeted goals without any issue (Scholes, 2015).
Rarity
It is based on asserted aspects by which respective firm is able to rarely meets entire
advantages of an organisation during competition at marketplace. Some of the resources are
mentioned below:
Low interest loan: These sorts f services has been developed by JP Morgan financial
company by which they can give this type of service to their customers in an appropriate manner.
Database management: JP Morgan generally use effective type of data with latest
technology in order to run its operations in a perfect way.
Employees: These are considered as an essential aspect of business as they help firm to
implementation on new theories as well as ideas towards achieving targeted goals and objectives.
Imitable
It is the combination of several resources of firm by which no one can copy and so on.
There are imitable resources, mentioned below:
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Employees: With the help of employees, JP Morgan able to use several types
knowledgable skills in different ways to run overall business functions (Jocovic and et. al.,
2014).
Database management: This is very unique database management which is developed by
JP Morgan for attracting large number of people.
Organized
It consist those sorts of elements which hare mainly arranged and developed in a perfect
way to gain successful goals. For example:
Employees: These are those kind of person who always encourage others towards
completing task. Along with this, employees are able to take different types of training and
developing programmes and than apply new ideas on particular concept (Jeston, 2014).
TASK 3
P3 Porter's Five Forces Model in context with market sector of an organisation.
This model is used to determine the particular tool which is mainly used by the different
organisation to analyse the competition which is present in the market. For the organisation like
JP Morgan the management can use such kind of model for measuring the actual competitiveness
effectively. With the help this company easily implement the strategies in the well define
manner. Here are all 5 forces which are mentioned below:
Threat of new entry: This is difficult for the company to sustain for the longer time
period as there is tuff competition present in the environment. For the organisation like JP
Morgan this is essentials for the management must ensure about the funds as existing companies
can retaliate. In order to overcome the such kind of issue organisation have to introduce new
product and service at the lower price which help in reducing competition effectively. Further the
company can offer better quality product due to which economies of scale can be easily achieved
(Goffee and Scase, 2015).
Bargaining power of suppliers: In this marketplace there are different kinds of
bargaining power of the suppliers in which it provide power to sell the services at the higher
price. This is directly affects the firm profit because the actual advancement is taken by the
suppliers due less availability of the substitute. In the context of JP Morgan the manager of the
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company must ensure about that there must be contract from the different suppliers as this
manage the price and availability of raw material whenever required. In this case if the suppliers
charges high price from the organisation than firm can switch to another supplier where the cost
is low.
Bargaining power of buyers: Buyers have the power to create a demand of lower price
or the higher product quality from the industry. For the organisation like JP Morgan have to
conducted proper research and offer the services and product as per the needs and requirement of
the buyers. The end users are consider as king as the organisation must be adaptive as this will
aid in providing competitive edge in the market. In this stage the product differentiation is very
high because the buyer have various option available in the market. On the other hand the quality
matters for the buyers and JP Morgan department must focus on improving the quality for
growth and expansion (Chang, 2016).
Threat of substitutes: Nowadays there are different substitute which are present in the
marketplace hence this is consider as the major threat for the company. In order to avoid such
kind of substitute JP Morgan should offer low price product and service. Further this will help in
improving the image and aid in capturing larger market share effectively. Apart from this firm
can implement bonus and discount schemes which try to reduce the threat of substitute. Apart
this JP Morgan ensures that they will provide benefits to their customers in order to accomplish
the desire aims and objective effectively.
Competitive rivalry: It is considered as the measure extent of competition towards
existing firms. On the other side, rivalry could have limited profits which mainly leads to
competitive moves that comes under the different types of cutting, maximisation of advertising
expenditure as well as spending huge money on various sorts of goods and services. In regards
with JP Morgan, there are large number of employees who always works together in order to
achieve firm's goals and objectives in a perfect way. In order to gain competitive scenario there
are different types of ideas which are applied by JP Morgan to influence others.
From the above specified model it can be said that, by using this model JP Morgan is able
to develop different types of strategies and theories so that they can easily achieve competitive
advantages in an appropriate manner. It is also helpful for firm to increase competitor for others
towards giving better financial services to its consumers (Cavusgil and et. al., 2014).
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TASK 4
P4 Models, theories and concepts for underpinning strategic planning within the firm.
Ansoff's matrix refers to the different types of strategical planning which is prepared by
management team within firm to achieve business goals. With the help of this matrix, firms are
able to achieve its successful growth through applying appropriate models and theories. In
regards with JP Morgan leader and manager of this firm are able to use this matrix model by
which they can increase proper growth of firm with applying new schemes perfectly (Chen and
Jermias, 2014). On the behalf of this mode, there are 4 strategies those are as follows:
Market Penetration: It is mainly concentrates on maximisation of sales of existing
products within existing market. In reference with JP Morgan, leaders and managers always use
this strategy in order to increase their sales of financial services for selling effective services to
their customers. Therefore, it is very helpful for firm to enhance overall sales of services within
existing place. Thus, it build strong relations between firm and customers in a perfect way.
Market expansion: In order to develop market expansion strategy, firms always enter
from a new market with their existing goods and services in relation with JP Morgan, leader or
manager of this firm always able to enlarge their different services into the new market or place
through segmenting new customers, regions and many more. Therefore, it is considered as an
essential strategy that gives huge profits to firm and increase their growth for future.
Product expansion: On the basis of this strategy, it has been said that arises when new
product in firm develop to reach existing marketing goals. In relation with JP Morgan industry,
there are several types of services which all are manage and developed through manager or
leader of this firm in order build strong understanding of marketing trends so that respective firm
can easily meet current needs and wants of market as well as people though applying innovative
solutions within the existing market. Additionally, it will helps firm to meet their targeted
scenario at marketplace through reducing errors in a proper way.
Diversification: According to this strategy, firms are able to offer several kind of
services within geographical area. On the other side, when firm enters in to new market with new
product then this situation raise (Brewster, 2017). Therefore, it could be the risky for JP Morgan
as it is needed within product development. But on the same side, it is helpful way for firm to
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differentiate their product with another. Therefore it is necessary for firm to consider this
strategy by which they can overcome impact of this strategy and employees are able to make
strong relations with manager and leader towards achievement of same organisational goals.
From the above specified matrix it has been analysed that, JP Morgan should use this
model in a correct way (Spender, 2014). With the help of this model, respective firm is able to
achieve its organisational goals and able to sustain into the marketplace for long period of time.
It is helpful for them to consider all these assorted stages of this model by which they can give
effective financial services to customers and achieve target towards goals. Therefore, it is helpful
model for every firm to known their condition of goods and services.
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