Assignment Sample on BUSI 1271 Global Strategy Analysis and Practice
Section 1: Name of the title, author and link of article
Title: – Covid curbs will have limited impact on UK recovery, say economists
Author of the work: – Madeleine Bruder
Section 2: Overview of the company in the article
This article presents JP Morgan strategy to curb omicron variant of covid-19 to protect UK economy. JP Morgan is named most important bank to health of financial system. Its aim is to provide the financial service offerings solution such as corporation, government and institutions. The bank also gained as systematic lender in 2019 before pandemic and shared highest bucket with HSBC and Citigroup. JP Morgan has a core equity ratio of 12.9% of capital to risk-weighted assets at the end of September and well above the minimum 11.3% by the Federal Reserve according to a filing of the bank (Bruder, 2021). The JP Morgan vision statement is to offering the best financial services solution to companies or individuals through their great platform. Its also want to make higher rate of return for their client’s investment. JP Morgan primary services is to provide financial assistances to organizations. Other than that, it also delivers strategic advice, solutions including capital raising, risk management and trade finance services to corporations, institutions and governments etc. It also includes the services like investment banking, commercial banking, payments, commercial card and merchant services etc. It has been helping its client to do first-class business for more than 200 years. It also provided committed, innovative and consistent advice and execution to clients at all times. The bank major products are credit cards, consumer banking, corporate banking, finance and insurance, investment banking, mortgage loans, private banking, wealth management etc. These are the specifications of JP Morgan.
This article outlines the JP Morgan selection of Plan B strategy of work from home to prevent of spending from occurring. It means that bank wants to secure their staff or reduce the people expenses which occurred work from office. To avoid the destruction of omicron impact on the economic growth of country, it decided to operate the business remotely. This would help to deal with the pandemic. Morgan is the firm believer that investment in hospitality would be high regardless to new covid variant and even Boris Johnson supports towards continue the Christmas parties would another factor within which JP Morgan continue to give higher investment in hospitality business by banks (Hearit, 2018). This is because people definitely continue their Christmas party. The pandemic already hit them so adversely their mental or physical state which barely seen that people will stop from partying. Thus, JP Morgan headline about the covid curbs will have limited impact on UK recovery. This clearly indicated by Morgan to their clients that they need to continue their investments regardless to news of omicron variant.
Section 3: Business case summary illustrated in the article
In this article, the case study of businesses signified that UK economic recovery from coronavirus is expected to survive with the imposition of government plan B restrictions. Due to the plan B restriction imposition, the business of bank of England is likely to push back the raising of interest rates decisions (Shi and Zhang, 2016). This is because they know that Plan B restriction could include work-from-home and different restrictions on movements. This could have made to reduce the investments. In that case, it would be not a good idea to raise the interest rates as people are more inclined to make savings than investments. The real-time data post November, 2021 showing that now omicron variant has not impact on the consumer spending. This is because of festive time period which definitely create more requirements of hospitality industry for partying.
In a similar manner, the case of JP Morgan also favored the findings of financial times. They believed that work from home of plan B tend to be continued in upcoming years as well. But it won’t impact the economy as work from home only prevents from the huge spending of business. It supports to get engage more with the income as compare to expenses. It benefits the businesses as well as economy (Smolarek and Scrivener, 2021). JP Morgan in its financial advisory service offering include the suggestion of more investment in hospitality industry as it is growing industry in current time. The Morgan believed that people have revived their trust on this sector so they will continue to visit on restaurants, hotels or markets etc. The festive time of Christmas can’t stop them from functioning their daily lives. That’s why, Morgan based on real-time data has predicted no major distraction of economy with omicron variant. The below given figure will demonstrated properly.
Figure: – Consumer spending hasn’t dented by Omicron headlines in the most recent week of real time data
(Sources: Bruder, 2021)
On the basis of figure, it is cleared that consumer spending consist of increasing trend and this has led to increase sales of credit of debit cards of JP Morgan for shopping purposes. It is estimated that household spending recovered strongly in the week ending December 5 to be 10.7% higher than the equivalent week in 2019. In regards to this statement of Morgan, UK government has little concern about the employees work from home measures. This is because work from home concept is now been going more than a year so it become more concern for government to retain the same passion in employees for their work. This is because work at home can’t give individual proper place to act as a professional body (Hearit, 2018). That’s why, government want to measure the productivity with this concept as Plan B clearly restrict the people movements or even opening offices or banks can prove as hazardous for the people as well as country economy. That’s why, it is important to evaluate the employees’ responses or actions on work-from home plan.
In respect to the given fact by JP Morgan that plan B restriction won’t give any type of economy losses. The institute of economic affairs warned that plan B restriction would cost to the economy as £4bn a month, roughly 2 per cent of gross domestic product. The taxpayer of country would have affected with omicron as people tend to save more or involve on the earnings. The negative situation of pandemic has already faced in 2020 with fall short of 25% drop in GDP of UK (Banulescu and Dumitrescu, 2015).
This time JP Morgan estimated that the hit won’t be so damaging than the last as the majority of population has double vaccinated or even follow health restrictions aided by government employee support measures. On the basis of these facts, Morgan has stated that the impact of third wave has been less as compare to previous time with an only 0.5% of GDP hit in December and January (Giese and Haldane, 2020). Thus, the presentation of business decisions, predictions guide about the likely impact of omicron over the functioning of businesses as well as economic growth.
Section 4: Appropriate utilization of concepts, models and theory
SWOT Analysis
| Strength
· Strong brand name and good financial position · Global presence and employs over 250,000 around the world · Excellent services for customers through extensive retail network · Good brand visibility in the B2B segment |
Weakness
· Overdependency on solely USA market · Stiff competition from other financial service providers · Fluctuating markets result in instability |
| Opportunities
· Expansion in other countries · Focus more on the digital platform · Diversifying portfolios for customers · Investments across the globe |
Threats
· Changing government regulations and financial crisis like recessions · Unstable mortgage market |
On the basis of this analysis, it is found that JP Morgan biggest strength is its brand name or goodwill which allows bank to run efficiently even at the time of pandemic. The excellent client services whether financial advice or investment related decisions etc. The customer found JP Morgan one of the best financial solution providers. But, when it comes to the competition, JP Morgan started facing pressure from the competitors due to emerging private financial institution at large (Phadermrod et al., 2019). The fluctuation in market reflects the instability in the performances of Morgan. The likely opportunities for Morgan are investment across the globe, expansion in other countries, focus more on the digital platform etc. Apart from this, the changing government regulations and financial crisis like recessions are among the major threats for the firm. The unstable mortgage market could also give tough time to Morgan in present or future time due to people low investments (Yuan, 2013).
VRIO analysis of JP Morgan
| Capabilities of Resources | Value | Rare | Imitable | Organization | Sustainable Competitive advantage |
| Valuable human resources | Yes | Yes | Yes | Yes | Highly sustainable |
| Strong global presences | Yes | Yes | Yes | Yes | Highly sustainable |
| Strong financial resources | Yes | Yes | Yes | Yes | Highly sustainable |
| Innovative | Yes | Yes | Yes | Yes | Highly sustainable |
| Differentiation business model | Yes | No | No | Yes | Competitive advantage |
Ansoff matrix framework
JP Morgan has been using Ansoff matrix framework since a long time as it utilizes all the three strategies i.e., cost leadership, differentiation and focus group (Rimmer et al., 2013).
Cost Leadership: – This strategy includes gaining of competitive advantage by keeping cost of product or services low. Cost leadership is the main strategy that JP Morgan chase uses in various consumer markets. This strategy supports the Morgan to target the middle-class people which makes the largest proportion of overall consumer market mix in most of the countries. Other than charging low prices by lowering production cost and maximizing the supply chain efficiency (Pesic et al., 2013). JP Morgan chase include offering of discounts and coupons to achieve sales targets and handle competitive pressure by its closest rival. Thus, this cost leadership strategy helps Morgan to stay competitive in this tough competitive market.
Differentiation: – The JP Morgan achieve the differentiation through expand the customer base through highlight the unique product features. Morgan chase extended its product line after studying the consumer charging interests to differentiate itself from competitors and expand the scope of opportunities within the industry. The mixture of differentiation and cost leadership has helped JP Morgan chase build a strong and loyal customer base (Miethlich and Oldenburg, 2019).
Focus strategy: – This strategy motivates the companies to focus upon the resources on expanding their narrowly targeted segments. The case when company adopts the focus strategy, then they concentrate on particular marketplace. In case of JP Morgan chase, the company is focuses on B2B clients as well as B2C. This helps the financial institution to help multiple people or clients to fulfill their requirements (Chen and Kodono, 2014).
Therefore, these strategy utilization supports JP Morgan to continue their positive goodwill in UK or global market which allows them to become a market leader. The leading banks or MNCs also engaged with the Morgan group to take up the right financial solution or even customers prefer to buy credit or debit cards from Morgan as it offers many discount coupons or high interest rate which attracts them to get engaged with the Morgan group (Phadermrod et al., 2019). Thus, the right setting up of price, present differentiation by select relevant target audience has assisted the Morgan group to get the competitive advantage.
Summary
From the article findings, it is learned that JP Morgan is one of the best financial institutions which offers right investment decision, provide products like commercial banking or even sell out credit/debit card. The real-time data showing in article that omicron variant of pandemic has lesser effect due to which Morgan bank predicted that people will remain invested in majorly on hospitality industry. The festive season of Christmas may also encourage the people to spend in the hotels, restaurants. Based on this fact, the Morgan group is suggested UK banks or clients to focus on the hospitality industry for investment as chances of high return are more. The JP Morgan strong goodwill or different portfolio investment makes them differentiated in present time.
In regards to future, the expected problem that Morgan group could face is related to increasing competition. This is because of entering new private financial institutions. Along with this, the advancement of technology is something could also influence the firm as Morgan is low indulge in the technology side. These are the consequences that JP Morgan could face in near future. It become must for firm to focus upon these aspects to achieve sustainable competitive advantage.
References
Banulescu, G.D. and Dumitrescu, E.I., 2015. Which are the SIFIs? A Component Expected Shortfall approach to systemic risk. Journal of Banking & Finance, 50, pp.575-588.
Bruder, M., 2021. Covid curbs will have limited impact on UK recovery, say economists. [Online] Available at: https://worldnewsera.com/news/finance/covid-curbs-will-have-limited-impact-on-uk-recovery-say-economists/
Chen, F. and Kodono, Y., 2014. Fuzzy VRIO and SWOT Analysis of Chery Automobile. Journal of Advanced Computational Intelligence and Intelligent Informatics, 18(3), pp.429-434.
Giese, J. and Haldane, A., 2020. COVID-19 and the financial system: a tale of two crises. Oxford Review of Economic Policy, 36(Supplement_1), pp.S200-S214.
Hearit, L.B., 2018. JPMorgan Chase, Bank of America, Wells Fargo, and the financial crisis of 2008. International Journal of Business Communication, 55(2), pp.237-260.
Hearit, L.B., 2018. JPMorgan Chase, Bank of America, Wells Fargo, and the financial crisis of 2008. International Journal of Business Communication, 55(2), pp.237-260.
Miethlich, B. and Oldenburg, A.G., 2019. The Employment of Persons with Disabilities as a Strategic Asset: A Resource-Based-View using the Value-Rarity-Imitability-Organization (VRIO) Framework. Journal of Eastern Europe Research in Business and Economics, 1, pp.1-13.
Pesic, M.A., Milic, V.J. and Stankovic, J., 2013. APPLICATION OF VRIO FRAMEWORK FOR ANALYZING HUMAN RESOURCES’ROLE IN PROVIDING COMPETITIVE ADVANTAGE. Tourism & Management Studies, pp.575-586.
Phadermrod, B., Crowder, R.M. and Wills, G.B., 2019. Importance-performance analysis based SWOT analysis. International Journal of Information Management, 44, pp.194-203.
Rimmer, M.A., Sugama, K., Rakhmawati, D., Rofiq, R. and Habgood, R.H., 2013. A review and SWOT analysis of aquaculture development in Indonesia. Reviews in Aquaculture, 5(4), pp.255-279.
Shi, J. and Zhang, J.J., 2016. Enhancing a corporate business relationship through hosting a running race event: the case of the JP Morgan Corporate Challenge in Shanghai. In Global Sport Management (pp. 96-106). Routledge.
Smolarek, B.B. and Scrivener, L., 2021. Examining business-driven education reform by new policy actors: a discursive analysis of UpSkill Houston. Journal of Education Policy, 36(3), pp.349-366.
Yuan, H., 2013. A SWOT analysis of successful construction waste management. Journal of cleaner production, 39, pp.1-8.
