Business Management Case Study: Chase Cardmember Services
The benefits of having a prestigious investment bank like J.P Morgan become its parent company are obvious and enormous. CCS brand equity would surge, along with its reach and access to prime resources, including land (locations), capital, and recognition. But there were disadvantages as well. J.P. Morgan was primarily an investment bank, and investment banking would be its number one priority. This meant that there would be added pressure on CCS to perform, since as a commercial bank, it becomes a more dispensable subsidiary to the overall corporation. CCS would have to continue to grow to sustain itself, and yet, it would essentially have to compete for its funding with the J.P Morgan's other financial functions in order to grow. It was very possible that CCS could be sold off if it did not continue to acquire portfolios and remain profitable.
3. In terms of where to expand, the global frontier was certainly an option for CCS. J.P. Morgan and Chase were well-recognized international firms, and continuing consolidation abroad meant that there were still quite a few portfolios that could be absorbed. The one setback to this strategy was its rivalry with Citibank. Citibank had been the other major conglomerate to emerge after the consolidation period, and was absorbing portfolios at a competitive rate. CSS was not experienced in international commercial banking, and Citibank was certainly stronger on the global …show more content…
With the added pressure it has now to perform, it cannot afford to spend resources or employ strategies towards unprofitable pursuits. Clearly, it's the 'revolving' customers from which CSS draws the most revenue, and any product or plan that does exploit these customers should be dispensed with. A possible solution would be to change the means of revenue from its customers. For example, instead of earning income from interest on outstanding debt, it could charge higher annual fees, like some other credit card issuers do. But that would likely alienate existing