Strategic management is an integral part of any organization that hopes to benefit from the dynamics of global competition. This is that part of the company making plans on how to achieve competitive advantage and become an organization that can compete on the global market front. The recent happenings in the business environment have led to the realization that companies will not continue to operate in an ordinary way. Globalization has led to sudden changes in the business environment. Strategic management helps the companies adapt to these changes. The basic principles of strategic management include: that the earth’s population is increasing at an alarming rate; that industries are being developed all over the country as third word countries strive to develop to the same level as America; and that information technology has led to breakage of barriers within nations and the world is becoming one global village; that global communication is integrating the business world into one.
JP Morgan Chase Company is one of the oldest companies in the world in the field of finance. Its assets total to a figure of 2 million and it is the third largest bank (Hunger & Wheelen, 2006). Apart from having a large number of Americans’ as its clients it also has a large number of international clientele that includes governments and different large corporations. The bank provides both investment and management of funds services to its clients.
In the recent past 2 years the company has had to endure the greatest challenge ever. Over the last ten years the company has faced the company has merged with smaller companies. This mergers and acquisitions have made the company be accosted with economical, social and political problems. The economic problems with has faced have caused its market turnover to be reduced by 50%. It has been facing problems that result from having outdated strategies. This is a company with a large number of shareholders and the company has to keep up with its promise of upholding its obligation to its shareholders. This is only possible if the company will stay focused to the bigger picture and try to overlook the current problems facing the economic environment.
In order to face these problems the company has been facing it is inevitable for the company to adopt global strategies that include accessing the economies of some of the countries the company has newly moved into. This will enable it to appeal to more customers and take advantage of the competitive advantage that comes with this. Product life cycles can also be extended. This is by ensuring that those products developed earlier can still be sold out in less developed countries. This can be possible if these products are subsidized to fit the economic potential of the people in these countries. The company has a great reputation and selling this reputation to new countries can make the products sell and make more profits.
The company should also consider diversifying in their investments which in turn act as a source of capital. The companies they have been merging with had not been practicing strategic management. The company will be forced to come up with new strategies that will take into consideration these new acquisitions. Some of the companies they acquired was through processes that were considered unethical. These could be the cause of the problems between Chase and its shareholders (Gopal, 2010). To prevent this problem they should consider making these processes more ethical.
To solve the problem of striking a balance between shareholders and the community, the company will have to come up with strategies that are affordable and profitable on the principle of gaining competitive advantage (p. 112). These strategies should not be exploitative in the community the company is in. they can also come up with the programs for giving back to the community. This can also be achieved by the company practicing discipline both when the company is making profits or losses. In doing this, none of the shareholders are affected negatively.
Gopal, P. (2010) JPMorgan Unit Subpoenaed in U.S. Investigation of New Jersey Tax-Lien Bids, Bloomnberg. Web.
Hunger, D. & Wheelen, T. (2006). Essentials of Strategic Management. (Fourth Edition). Boston: Prentice Hall.