ASSESSMENT ON JPMORGAN CHASE GLOBAL STRATEGY (Business & Marketing Essay)

ASSESSMENT ON JPMORGAN CHASE GLOBAL STRATEGY
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Executive Summary
The performance of an organization in the global market depends on the company’s global strategy. A strong global strategy promotes successful performance. This report assesses the global strategy of JPMorgan Chase and provides strategies that can be applied by the bank to mitigate risks. It also suggests how the bank can remain competitive in the global market by building on opportunities. The bank will experience high credit losses due to the Covid-19 pandemic but can utilise this opportunity to fully digitise its services. To manage credit losses, the bank will need stringent monitoring measures and policies. It will also need to identify current and emerging digital financial tools.
Assessment on JPMorgan Chase Global Strategy
Introduction
The success of any business in the global market is dependent on the company’s global strategy. Many businesses have been internationalising, thanks to globalisation and other developments in recent years. However, not all firms that have gone global can maintain their shares in the global market. This report provides an assessment of the global strategy of one of the international banks and provides strategies that can be applied by the bank to mitigate risks and remain competitive in the global market.
Question One
For this report, I chose JPMorgan Chase. JPMorgan Chase is an American global financial services firm. It is one of the largest banks in the US and has been operational for over 200 years (JPMorgan Chase, n.d.). This bank is an ideal choice for the assessment due to its longevity in the industry. Despite the complex nature of the global market, JPMorgan Chase has been a successful firm for most years and continues to offer great financial services to its clients. This success mostly lies in its global strategy, which is the focus of this report.
Question Two
To identify JPMorgan Chase’s global strategies, a Client-Arena-Products (CAP) model analysis will be conducted.
* Client
JPMorgan Chase offers its services to governments, institutional clients, corporations, and individual clients (JPMorgan Chase, n.d.).
* Arena
JPMorgan Chase’s market is in different geographical locations (over 60 countries). Therefore, JPMorgan Chase’s arena is international markets.
* Products/Services Offered
Some of the key products or solutions offered by JPMorgan Chase include investment and commercial banking, securities services, asset management, private banking, and financial services for consumers (JPMorgan Chase, n.d.).
JPMorgan Chase has built franchises that offer services to different clients. Its consumer and community banking services are offered to US citizens while its investment banking services are offered to Fortune 500 companies and other similar businesses globally (JPMorgan Chase, 2020). Asset management services are offered to a global clientele including central banks, pension funds, and individual wealthy clients.
Based on this information, JPMorgan Chase serves clients in three segments of domestic retail, wholesale, and government clients. It also serves an international market and provides asset management as well as domestic intermediation business. It is therefore in the cell (3,3,3) of the CAP model. Since it serves in many countries and offers a wide range of products, JPMorgan Chase enjoys economies of scale (Kim, n.d.). This is what gives the bank a competitive advantage. Figure 1 shows the operations of JPMorgan Chase in the international market.
Question Three
One of the key challenges that JPMorgan is facing is not specific to the bank as it is a global crisis that has been brought forth by Covid-19. This crisis has affected the global market and has brought most operations in the global economy to a standstill. In their 2019 annual report, the bank revealed that it expects its revenues to decline in 2020 due to the crisis (JPMorgan Chase, 2020). The crisis has halted operations and limited face-to-face interactions. Yet, JPMorgan Chase offers services that sometimes require customers to visit the bank's physical offices. Over 1 million customers visit different branches of JPMorgan Chase every day (JPMorgan Chase, 2020). Besides, since the crisis has hit everyone, many of JPMorgan Chases’s clients are facing hardships in repaying their loans. As a result, the bank will face a high capital risk arising from loan losses and as well as a decline in revenue in comparison to 2019 (JPMorgan Chase & Co., 2020). The net income in 2020 declined by 51% compared to 2019 (JPMorgan Chase & Co, 2020). The credit losses in the second quarter of 2020 were 10,473, approximately 10 times higher than those of 2019. Figure 2 shows the results for 2019 and 2020.
JPMorgan Chase identifies these challenges and expects credit markets to suffer greatly before solutions can be identified (Ossinger, 2020). It has also made efforts to manage the challenge. For instance, they have created a payment enrollment program and have delayed payments for mortgages and other credit services (Dimon, 2020). Late payments are also not being penalised as is usual. The assistance program is helping JPMorgan reduce their loan losses. The bank also has a large reserve of about ...