Strategic Posture of JPMorgan Chase & Co - Case Study Example

JPMorgan Chase & Co Current Situation Introduction and Company overview JPMorgan Chase & Co a multinational banking and financial services holding company was founded in the year 2000 and with total assets of US$2.415 trillion is the largest bank in the United States. JPMorgan Chase & Co is a universal bank with its headquarters in New York City. The JPMorgan as a brand is used for investment banking, JP Morgan asset management, private banking and wealth management, securities and treasury divisions whereas the Chase brand is used for the credit card facilities in the United States. The product JPMorgan Chase and Co. deals with is consumer banking, corporate banking, commodities, credit cards, foreign currency exchange, mortgage loans, global banking, finance and insurance, treasury services, risk management, and underwriting. Mr. James Dimon was elected as the Chairman of the board of directors on December 31, 2006; he was the chief executing officer of the company since December 31, 2005. The name of the holding company is JPMorgan Chase & Co and the consumers and clients are given service by the company under the Chase and JPMorgan brands. The commercial banking business under the JPMorgan basically includes corporate client banking, real estate banking, international banking, healthcare and government banking. On the other hand the commercial banking business of the Chase brand includes equipment finance, business credit, middle market banking, commercial term lending, and community development banking (Wetfeet, 2008). The two brands were known for its separate facilities, JPMorgan was known for credit derivatives, fixed income, loan syndication and Chase Manhattan was the third largest commercial bank with a burgeoning investment banking unit. The merger of these two firms has resulted in great success of the brand JPMorgan Chase & Co and it is positioned as the third largest U.S. bank and a global financial services provider operating in more than 50 countries and was even ranked 31 on the Fortune Global 500 list in 2007 amongst the list of the biggest companies. Strategic Posture Strategic History of the Organization JPMorgan Chase & Co is a combination of many large U.S. banks since 1996 which includes Chase Manhattan Bank, JPMorgan & Co, Bank One, Bear Sterns and Washington Mutual. If their predecessors are considered then some of the major banking companies are also included like Chemical Bank, Manufacturers Hanover, First Chicago Bank, National Bank of Detroit, Texas commerce bank, Providian Financial and Great Western bank. The New York Chemical Manufacturing company was founded in the year 1823 and was mainly into chemical products but later it performed various banking operations under the name of Chemical Bank started operating independently with a series of mergers with Corn Exchange Bank, Texas Commerce Bank, and Manufacturers Hanover Trust Company in 1991. Even after merging with Manufactures Hanover Corp., it operated under the name of Chemical Banking Corp the second largest banking institutions in the United States. In the year 1995 there was a merger between the First Chicago Corp. and NBD Bancorp INC., and formed the first Chicago NBD Corp. the largest banking company based in the Midwest. In the year 1996 there was another profitable merger which resulted into creating the largest bank holding company then in the United States, a merger between the Chemical Banking Corp. and the Chase Manhattan Corp. The merged company was named as the Chase Manhattan Corp. In 1998, Banc One Corp became the largest financial service firm in the Midwest and the largest issuer of the Visa credit cards due to the merger between the Banc One Corp and the first Chicago NBD corp. operating under the name of Banc One Corp. This merger made the firm the fourth largest bank in the United States. (JPMorgan Chase, 2014) In 2000, there was an incorporation of the four largest and oldest money center banking institutions in New York City that is the Morgan, Chase, Chemical Bank and Manufacturers Hanover after the successful merger of The Chase Manhattan Corp with the JPMorgan & Co. The merged firm started operating under the name of JPMorgan Chase & Co. In the year 2004, the commercial banking skills of JPMorgan Chase was merged with the consumer banking strengths of Bank One. The name of the firm remained as JPMorgan Chase & Co. This merger was projected as the biggest and strongest deal in the market and even set a higher benchmark and competitive advantage amongst the fierce competition of the banking industry in the United Sates. In 2006, JPMorgan Chase & Co acquired a portfolio firm of private equity named as Collegiate funding services leading to the foundation of Chase Student loans. In the same year JPMorgan Chase & Co also acquired the retail and small business banking network of the Bank of New York Co. These helped Chase to access over 338 additional branches and even reach out to 700,000new customers who were located in New Jersey, New York. (Kiechel, 2010) JPMorgan Chase & Co in order to expand its businesses in a broader range and to strengthen its capabilities in fields of prime brokerage, cash clearing, and global energy trading, in 2008 JPMorgan Chase & Co acquired the Bear Sterns Companies Inc. In 2008 JPMorgan acquired the carbon offsetting Climate Care Company which was UK based. There was a lot of mergers and acquisitions behind the success of JPMorgan Chase & Co. which had certain risks but most of the times proved to be profitable for the company. Organizational Mission Statement and Strategic Vision Mission Statement The mission statement of JPMorgan Chase & Co. is as follows – “At JPMorgan Chase, we want to be the best financial services company in the world. Because of our great heritage and excellent platform, we believe this is within our reach.” (JPMorganChase 1, 2014) Strategic Vision JPMorgan Chase & Co., a conglomerate firm, has the aim to be the most profitable, respected and influential investment bank in the world for the long term. JPMorgan Chase & Co over the years has focused on delivering the best of practices to its clients, they believe in providing services which cannot be matched by its competitors or in simple words to provide unparalleled services to its clients and even managing its human assets very efficiently with greater analytical skills. The company defines its goals and sets pace to realize these goals and develops well defined structure to achieve these goals. Their main vision is to develop a world class franchise in every business they operate. JPMorgan Chase has been delivering good returns and growth over the time. The series of mergers and expanding the business and becoming highly competitive firm over the years is its underlying success stories. JPMorgan Chase has the focus of delivering the best to its customers and exceeding their expectations every time. The strategy remains the same maintaining high standards always and to be a leader in the competitive market. The diversity is very important for JPMorgan Chase & Co and the success of their business depends on it. The company is flexible to the changing needs of the customers and has incorporated new ideas through discussions and creates innovative methods and sustaining competitive advantages. JPMorgan Chase & Co focuses the diversity of the firm; they hire, retain, recruit, and develop the best of the talent possible so that the best of practices can be delivered to the customers, clients, and shareholders. This kind of strategy helps in driving the maximum profit and even capturing more of market share and hence a rapid market growth. JPMorgan Chase even has been developing on the technological side of its firm with the help of IT professionals who are more business aligned and even among them some work on firm wide initiatives. Their main objective is to turn the systems, applications and the infrastructure into a competitive advantage for the company by merging the technological expertise with the different kinds of strategy developed by the firm as and when required (Louis, 2007). The strategic vision of JPMorgan Chase & Co from the year of foundation 2000 has been to create point based rewards offering to drive spend on Chase branded cards, the ability to earn across multiple Chase branded offerings, to provide exceptional array of redemption along with a strong customer value, technology driven environment with a simple user friendly environment, enhancement of value proposition of products and pricing power, increased share of customer spend, borrowing needs and lowering the rate of attrition, and most importantly the method through which the company obtained such higher market growth that is building strategic partnerships and enhanced sourcing. Business level strategy As a business level strategy the five forces model is used by JPMorgan Chase & Co., taking into account its competitors and knowing its buyer power is high they offer perks in order to maintain an advantage over its competitors. JPMorgan offer various kinds of rewards to its customers which includes free checking, $25 referral rewards and even the newly implemented Chase quick deposits with the help of which quick deposits can be made without going to the bank location. They even offer both personal and business banking, along with retirement and investment accounts. The company works on the customer relationship management through two software’s named as ‘customer assist’ and ‘contact manager’ which helps to view the contact details and also prevents of repeating the calls thus saving time and making the job of maintaining records simpler. JPMorgan has always opted for incorporating with the IT culture. It is the only bank with end to end supply chain capabilities; they have teamed with Vastera to manage the physical and financial services even optimizing transactions. JPMorgan Chase has been the leader in the financial sector through its forward thinking and various innovations. JPMorgan has aspired to be the best in the industry through developing a world class franchise in every business they operate; their strategy is to be client and field driven and to deliver the best products or services in the cost effective way, and creating powerful brands to carry a commitment of quality and integrity. They even demand and maintain strong financial discipline through sound accounting standards, transparent public reporting and great management information systems which leads to high quality earnings that are recurring and in turn also yields high returns on capital, produces good margins (Hitt, 2013).Their strategy is also to maintain a fortress balance sheet, eliminate waste and bureaucracy, maintaining a strong system of internal governance and controls, to maintain a complete and balanced scorecard in respect of recruiting the best talents, product innovation, improving continuously on the core processes, and making good returns on the capital. References Hitt, M. (2013).Strategic Management. Canada: Cengage Learning JPMorganChase, (2014).History of our firm. Retrieved from: http://www.jpmorganchase.com/corporate/About-JPMC/jpmorgan-history. JPMorganChase 1. (2014). Business Principles. Retrieved from : http://www.jpmorganchase.com/corporate/About-JPMC/business-principles.htm. Kiechel, W. (2010) .The Lords of Strategy: The Secret Intellectual History of the New Corporate World. New York: Harvard Business Press. Louis E.V. (2007). HR and the New Hispanic Workforce: A Comprehensive Guide to Cultivating and Leveraging Employee Success. New York: Davies-Black Publishing Wetfeet (2008). JPMorgan. New York: WETFEET INC. Read More