Strategic Changes Impacting JP Morgan: Technological And Risk Management Strategy

Technological change

JP Morgan is providing comprehensive employee benefit programs for maintaining their competitive advantage. Benefits like distinctive plans for health care, 401K programs, plans for retirement as well as benefits like childcare support assists in giving them an appeal that cannot be matched by the other organizations. JP Morgan is offering both personal as well as business banking and lending, retirement as well as investment accounts.

The identification of two strategic changes at JP Morgan are mentioned as under,

JP Morgan has launched a programme called COIN regarding Contract Intelligence that will assist in conducting the tedious job to interpret commercial-loan agreements, which was earlier done by the lawyers and as a result consuming 360,000 hours of their time every year. However, this software assists in reviewing the documents within seconds, and is less prone to error. JP Morgan did the setting up of new technological hubs in respect of teams that specialises in big data, robotics as well as cloud infrastructure for finding new revenue sources, while doing the reduction of costs and threats. Moreover, the bank has also created its personal computing cloud known as Gaia, which went online recently. Machine learning and big-data efforts are now residing within the private platform that is having endless capacity for supporting their craving towards processing power.

This is the method to do the actual management of risks. This is associated with the aspect of undertaking the proactive steps towards reducing the risks that are identified where there is a possibility as well as to put steps, rules or processes in place for minimizing the residual risk for reducing the changing scenarios relating to loss or sternness regarding such a loss. Risk control assists in the occurrence of calculated and informed undertaking of risks where the advantages to advance with an activity will be outweighing the presence of much-reduced threats.

JP Morgan will be utilizing the five forces model as a business strategic aspect. Taking into consideration the number of competitors that the company is having, an assumption can be made that they are having a high buyer power, but they are offering numerous perks, which assists in maintaining the company’s advantage over the other competitive brands. The company is providing various rewards in respect of their customers like free checking, $25 referral rewards as well as newly employed “Chase quick deposit”. With the facility of quick deposit, there is the possibility for depositing a cheque without going to the bank. This application can be used through an iPhone that submits an image of the cheque to the bank and then consecutively the fund is deposited to the account. It is considered being quick as well as easy regarding majority of the customers (Mirabeau 2014).

Risk Management strategy

Threat of substitute services, new entries as well as rivalry of current competitors is high within the financial market but JP Morgan is constantly doing the implementation of new strategic aspects for maintaining their competitive edge. The company is considered being an innovator within their sector. Currently, the company has set aside $10 billion for lending to the small businesses with an incentive for increasing their employees. They are providing lower rates and after approving the loan application, in respect of every new hire, a rate discount of 0.5% is being provided in respect of three new staffs. The company is also providing an incentive of $100 cash back regarding an auto loan in respect of purchasing any new or used car. The company did the realization that there is the availability of various banks in which money can be invested by the individuals as well as businesses, with the frequent availability of new options. Due to this, the company is offering benefits as well as incentive programs in respect of staffs as well as customers. The organization is offering something for all that ranges from individuals to the businesses (Hanks 2015).

This might be increasing the costs but also its revenue since those clients will assist in bringing current as well as future organizational profits. The company is using the software like ‘Customer Assist’ and ‘Contact Manager’ that are both forms of customer relationship management process (Herbiniak 2013). ‘Customer Assist’ will be allowing the staffs towards searching for personal information and also towards gaining a better understanding of different types of accounts as well as other traits whereas ‘Contact Manager’ will be allowing staffs for seeing a clear profile of every client without clicking on different screen. The company does the following of a completely integrated approach in respect of their IT culture. Every unit of business is having their individual IT organization. In 2001, the company did the shifting of its business focus to ‘one firm-one team’ that will be encouraging the staffs as well as departments for collaborating.

The company is also having E-Learning tools like ‘Training Central’ for training the staffs as well as providing them education. With the help of this software, staffs as well as their seniors will be observing the training courses conducted by them as well as offer information regarding future discretionary training (Lloret 2016). E-learning will be offering flexibility without making compromises regarding the learning experience and the outstanding business strategy of the company will be allowing the company in maintaining their position for being one of the leading financial organizations globally.

Political Factors – JP Morgan is providing financial services. For operating in a successful manner, the company is following the rules as well as the instructions the government has set. The business operations are also influenced by the taxes, policies regarding employment as well as banking regulations. As a result, such regulations will be getting evaluated within the political factors for the company to serve effectively within the financial services industry. In addition, JP Morgan is required following the laws as well as legislations that the government has prepared for working in an effective manner (Baker 2014).
Economic Factors – The financial sector elements are considered to be financial crisis, growth in population, rate of urbanization as well as unemployment rate. JP Morgan is required focusing on the various aspects for realizing the organizational profits. The analysis of such factors will assist in designing the economic policies, rate of interest as well as the prices regarding the financial services that are being offered. The company is also dealing with such issues and contributing to the growth of the economy (Puranam 2016).
Social Factors – JP Morgan is also required focusing on the socio-cultural values regarding the customers. The company is having many big competitors such as Bank of America, Citigroup Incorporation as well as the Barclays Public Limited Corporation Bank. For working against such establishments, approaching the present as well as probable future consumers is considered having high significance.
Technological Factors – There is the existence of a high significance to communicate with the customers in this new technological period with the techniques of marketing that are considered being highly effective. Therefore, the company is required paying attention regarding its promotional campaigns for making individuals have the awareness regarding the services the organization is providing. Moreover, there is the requirement for applying advanced technological aspects regarding the banking services in respect of credit cards, methods of payment and others. The company is required improving the services through the use of latest technological aspects as well as providing the best output (Galpin 2015).
Environmental Factors – JP Morgan did the analysis of the environmental influence by paying attention to the ecological scenario regarding the business. This aspect will assist the organization towards the attainment of a better share of market within the financial services industry.
Legal Factors – The fixed rates of interest, the charges regarding financial transactions, loan amounts as well as the savings interest, all of these are associated with the requirements that JP Morgan should be following (Drnevich 2013).

Strategy as a Plan – Considering the strategy plan, certain consciously intended action course, as well as guideline is required for dealing with the scenario. Through the definition, strategies are considered having two major traits. One of them is stating that they are prepared in advance regarding the actions to which they will be getting applied as the other one is that there development occurs in a conscious as well as purposeful manner (Keyes 2016)
Strategy as Ploy – Similar to plan, a strategy can be considered being a ploy as well. The company should be having a particular scheme having the intention for outwitting a rival or competitor. In this regard, techniques as well as tools like Future Wheels, Impact Analysis as well as Scenario Analysis will assist the organization in exploring the probable future circumstances in which there will be occurrence of competition.
Strategy as Pattern – It is not enough to define strategy as plan, there is also the requirement for encompassing the consequential behavioural aspect, which is stating that strategy is a pattern, particularly, a pattern within a flow of actions. In this respect, tools like USP Analysis as well as Core Competency Analysis will be providing assistance to the company. Also, a similar tool such as VRIO Analysis will be providing assistance in exploring the resources as well as assets that JP Morgan is required focusing on when the strategies are being considered (Arbratt 2017).
Strategy as Position – In this regard it can be stated that strategy is considered being a position that is particularly associated with the process to locate a company within an environmental scenario. Therefore, strategy turns out to be an intervening force within JP Morgan and the internal as well as external environment.
Strategy as Perspective – The selections that JP Morgan will be making in regard to its strategic aspect would have a heavy reliance on its cultural aspects and as behavioural patterns will be emerging as strategic aspects, the thinking patterns will be shaping the perspective of the company. For instance, as because JP Morgan is encouraging the aspect of taking risks as well as staff innovation, it is focusing on the aspect of developing innovative financial services and products that will be considered as the major driving force behind the strategic aspect of the organization (Hoods 2016).

This tool is considered effective to make decisions through the analysis of the forces for and against a changing aspect, as well as to communicate the logic behind the decisions of the organization. There are certain steps that need to be followed for carrying out a force field analysis.

Step one – Describing the plan or proposal regarding change. There is the requirement towards defining the organizational objectives and writing it down in a box in the middle of a page.
Step two – Identifying the forces relating to the change.There is the requirement for thinking about the types of forces that drive the changing scenarios, which could be internal as well as external. The internal drivers might be considered to be outdated machinery or line of products, decline in the team morale as well as the requirement towards increasing the productivity. The external drivers might be including a functional environment that is unstable as well as uncertain, technologies that are considered being disorderly and changing the trends relating to the demographical aspects (Purce 2014).
Step three – Identifying forces against change. In this stage, there is the requirement for brainstorming the forces that will be resisting the changing scenarios. The internal resistors will be taking into consideration the available structure of the organization whereas the external resistors will be including the legislations of the government, as well as compulsions regarding the customers (Canpbell 2014).
Step four – Assigning the scores. Then there is the requirement towards scoring each force from one to five i.e. from weak to strong in accord to the degree of impact each one is having relating to the plan and then adding the scores regarding each side, which might be in respect of for as well as against.
Step five – Analysis and application. After completing the Force Field Analysis, JP Morgan will be using it in two methods such as deciding whether or not to proceed with the changing aspects as well as thinking about which supportive forces JP Morgan will be strengthening and which resisting forces, JP Morgan will be weakening, and in what ways changes will become increasingly thriving (Rothaermel 2015).

Leaders are advocating the changing scenarios relating to the organizational levels. A sponsor is an individual who won’t be allowing the changing endeavour to perish from the absence of attention, and will be interested in using their political capital for making the change take place. Leaders of change should have the willingness of going first. They are demonstrating the actions as well as approaches that everyone is expecting. This leadership role is having self –awareness as well as being purposeful (Murray 2014). During the time of organizational change, leaders are required leveraging their authority to make decisions as well as choosing the alternatives that will be supporting the plan. The Decision Maker is considered being decisive and will be setting the precedence, which will be supporting the changes.

Porter’s Five Forces Model

There are different roles that are played by the organizational managers to lead strategic changes. It can be stated that the leadership process will influence as well as organize the formation of groups within the company in efforts regarding the actualization of a target or objective. In the absence of effective strategic change regarding leadership, there is the threat of individuals within an organization to have less clarity regarding its purpose or lacking the motivation for delivering it. Therefore, strategic leadership is vital regarding strategic change and in this regard, it can be stated there are three major roles that are particularly important regarding the leading strategic changes such as to envision the future strategic aspect, to align the organization towards delivering that strategic aspect as well as to embody the changing aspects. There isn’t any particularly best strategic leadership style. In addition, it is evident that successful strategic leaders are having the ability towards adjusting their leadership style regarding the context that they are facing. This is considered being situational leadership. This leadership style is associated with the aspect of reviewing various generic approaches towards the management of change as well as to consider increasingly particular styles for leading change. There are situations where rapid reconstructions have been emphasized. When this is absent, an organization could be facing closure, or be taken over. This is generally considered as turnaround strategy, in which the prominence is on speed of change, rapid reduction of cost as well as generation of revenue. The managers are required prioritizing the things that are providing fast as well as essential developments such as the stabilization of crisis, changes regarding management, achievement of stakeholder assistance, clarification of the target markets as well as essential products and financial restructuring.

Conclusion

To conclude it can be stated that a strategy can be considered being a ploy as well. The company should be having a particular scheme having the intention for outwitting a rival or competitor. In this regard, techniques as well as tools like Future Wheels, Impact Analysis as well as Scenario Analysis will assist the organization in exploring the probable future circumstances in which there will be occurrence of competition.

References

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