Jp morgan swot analysis 2015

Running head: JPMORGAN CHASE BANK ANALYSIS 1

Running Head: JPMORGAN CHASE BANK ANALYSIS 2

Unit 4 assignment

Irasema Hernandez

Date: 3/31/2018

JP Morgan chase bank

The global fortune 500 company that I am working on is JP Morgan Chase bank. JPMorgan Chase bank is a financial and investment bank founded close to 200 years ago by J. Pierpont Morgan and a Philadelphia banker who went by the name Anthony Drexel. The corporation offers a wide range of products and services and they include; brokerage and research, commercial banking, financial services to retail and corporate clients, asset management, investment facilities and advising, risk management and wealth management services. The institution has close to 200,000 employees.

The mission and vision of the organization have played a crucial role in its success. The financial organization has always emphasized on exceptional client service. The corporation has a goal of not only meeting client needs but of exceeding the client’s expectations and needs. By always sticking right by their clients through unwavering support has ensured that the financial corporation has been in existence for close to two hundred years. Satisfied clients have given the corporation repeat business and referral business thus pushing their profit margins. This eventually led to the corporation being listed in the top 10 publicly listed companies in the US in the year 2016 and being the top bank in the US in the same year (Varma, 2017).

JPMorgan core values include a commitment to integrity, fairness, responsibility and operational excellence. The core values are supported by a great team that has a winning culture. Adherence to these values by the employees has brought success to the organization. The primary stakeholders and management of the corporation have emphasized that every employee, right from the CEO to junior staff are treated fairly and just; acknowledged and rewarded for high performance. By so doing employees are encouraged to put their best foot forward as they perform their duties. This push for operational excellence has ensured that the corporation has been successful in meeting client needs and also in meeting the organization's goals.

The forces that affect the company and how the impact the company

There are forces of competition and other forces that may affect a corporation and some of these forces include; bargaining power of suppliers, the threat of substitute product or services, rivalry among existing competitors and political forces (Michaux, Cadiat & Probert, 2015). The company is always facing competition from other financial institutions that offer products and services that are almost similar to theirs. Main bank rivals of JPMorgan include Bank of America, Wells Fargo, and Citigroup. Each and every day the rivals are always looking for ways to better their products in order to eat into their customer base.

Every institution always faces the threat of substitute products or services and JPMorgan is not an exception to this. Insurance and Investment Corporations offer services such as investment management and brokerage services. These services are similar to what JPMorgan offers and sometimes the investment corporations offer better returns or give cheaper rates than JPMorgan. By so doing they can take away some clients from the bank and which in effect will lower the profit margin of the bank.

There is always the threat that a new bank offering similar products and services may join the market and bite off a chunk of the corporations’ customer base. Suppliers always have a big say in how corporations operate. A sudden increase in a supplier’s price can affect the overall profit margin of a company and mind you there are also costs of switching suppliers. JPMorgan is also always threatened by buyer’s powers. A powerful buyer e.g. a billionaire who decides to purchase a large percentage of a company always has more bargaining power than a buyer that is purchasing a small percentage. Buyers can indirectly affect the success of a company.

Recent Financial results of JP Morgan chase bank

financial report as of the end of 2016, published in April 2017

2016

2015

reported basis

total net revenue

95668

93543

total noninterest expenses

55771

59014

pre-provision report

39897

34529

provision for credit losses

5361

3827

net income

24733

24442

per common share data

net income per share:

basic

6.24

6.05

diluted

6.19

6

cash dividends declared

1.88

1.72

book value

64.06

60.46

tangible book value(TBVPS)

51.44

48.13

selected ratios

return on common equity

10%

11%

return on tangible common equity

13

13

common equity tier 1 capital ratio

12.2

11.6

tier1 capital ratio

14

13.3

tier capital ratio

15.2

14.7

selected balance sheet data(period end)

loans

894765

837299

total assets

2490972

2351698

deposits

1375179

1279715

common stockholders’ equity

228122

221505

total stockholders’ equity

254190

245573

market data

closing share price

86.29

66.03

market capitalization

307295

241899

common shares at period-end

3561.2

3663.5

headcount

243355

234598

SWOT analysis of JP Morgan Chase bank.

Based on the SWOT analysis I identified the strengths of JPMorgan to include the following; the corporation has a good brand name and a very good financial position, the bank is the largest bank in the country in terms of sales, assets, and profit, the bank is globally known and has a backing of close to 300,000 employees and the bank is well known for its excellent services for customers more so in the retail market. I also identified the weakness of the corporation to include; very stiff competition from other financial companies such as Wells Fargo, overreliance on the US market and their market base fluctuates a lot leading to instability of the organization (Lessambo, 2013).

JPMorgan has opportunities to expand or solidify its position in the industry; the financial corporation can invest and yield a lot from commercial banking. As it stands, the bank is primarily based in the USA and by investing across the world they stand to grow their asset base, client base, and profit base. The financial organization can also decide to diversify its client portfolios by offering more products and services which in return may yield good returns. JPMorgan faces threats to its existence and the two major threats are unstable markets for mortgage products and facilities and constant changes in government financial regulations and laws (Sarsby, 2016). The changes in government financial regulations can affect the product and services the financial institution offers and by so doing affect the profitability of the organization.

In order for the organization to maximize its opportunities, the organization can decide to tap into the international financial market that it has been steering away from for a long while. Through expansion to international countries, the institution stands to grow tremendously. Currently, the bank is mainly retail-oriented and that forces it to over depend on its home country base. The organization can opt to venture into commercial banking which will in effect diversify their portfolio and possible increase their customer base. This will give them a strong base in the international financial world.

Strategies to maximize profitability and competitiveness in the future

It is crucial that the company capitalizes on its strengths and opportunities, and minimize its weaknesses and threats in order to maximize profitability and increase their competitive edge. A strategy that JPMorgan can decide to employ is diversification of its customer market. As it stands the bank over-relies on its retail market and by deciding to engage commercial clients they increase their competitive edge and risk increasing their profit margins (Pangarso & 2014 IEEE 2nd International Conference on Technology, Informatics, Management, Engineering & Environment (TIME-E), 2014). The corporation can decide to merge with smaller banks in the international market. This will increase their asset base and customer base. The merging with banks in other country reduces their over-reliance on the USA market with a possible maximization of profitability and competitiveness.

The bank can also decide to downsize and focus on virtual and online products and services. Their current wage bill eats into their profit margins and by having virtual and online products that do not really need employee intervention they stand to increase their profitability by reducing the wage bill. By also having online products and services they have diversified their market target.

The leadership of JPMorgan is exceptional. They have mastered the art of balanced risk-taking. As much as they are striving for larger profit margins and growth they are risk-averse on investments and dealings that have huge potentials for blowing in the organizations face (Mallin, 2016). The leadership has continued fostering trust within the organization. Such an environment supports integrity which is crucial for any financial organization. Trusts push for ethical operations in the organization. The leadership and management can emphasize the improvement of ethical practices in the organization as the corporation have faced many lawsuits on unethical practices in the past and they have ended up giving them a bad reputation (Bloomberg News, 2013)

The leadership can improve by incorporating every employee in running the organization. This would make the employees partners of the organization and the end result is that they will own the organization. By owning the organization operation success is guaranteed by the employees. The leadership can push for diversification of products and services this will allow for the profitability of the organization and at the same time give the corporation a competitive edge over her rivals.

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Bloomberg News (Firm). (2013). Leaks expose investigations at JPMorgan. New York: Bloomberg.

Lessambo, F. I. (2013). The international banking system: Capital adequacy, core businesses, and risk management. Houndmills, Basingstoke, Hampshire: Palgrave Macmillan.

Mallin, C. A. (2016). Corporate governance. Oxford: Oxford University Press.

Michaux, S., Cadiat, A.-C., & Probert, C. (2015). Porter's Five Forces. (Management & Marketing.) Namur: 50Minutes.com.

Pangarso, A., & 2014 IEEE 2nd International Conference on Technology, Informatics, Management, Engineering & Environment (TIME-E). (August 01, 2014). Organization's structure based on competing for value approach and merger strategy. 189-193.

Sarsby, A. (2016). SWOT analysis.

Varma, J. (2017). JP Morgan Chase and the London Whale.