Business Strategy: Analysis of JP Morgan Company

This study analyzes the impact of macro and micro environment on JP Morgan company through SWOT and PESTLE analysis. It also examines the competitive market through Porter's five force model.

BUSINESS STRATEGY

Contents
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................3
PESTLE Analysis of JP Morgan company............................................................................3
SWOT analysis of JP MORGAN CHASE.............................................................................6
Porter’s 5 force analysis in JP Morgan...................................................................................8
PART B..........................................................................................................................................11
Different types of strategic directions available to JP Morgan............................................11
Strategic Management plan with strategies, tactics and objectives......................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business strategy in turn is considered to be one of the most effective team which is useful
in carrying out several business operations in a legal and reliable manner. The company tends to
effectively carry out internal and external analysis of the organization in order to stand out in the
market. This study will analyse the impact of macro and micro environment with the use of
SWOT and PESTLE analysis of the specific organization. Furthermore, this study also examines
the competitive market of the specific market sector through Porter’s five force model.
Moreover, this study also apply theories, models and concepts in order to assist with
interpretation and understanding of strategic direction in order to attain greater heights for the
organization.
JP Morgan and company is considered to be one of the commercial and investment banking
and asset management company which was founded in the year 1871 by J.P. Morgan. This
company is headquartered in New York City, United States. This company tends to provide
various financial services such as asset management, wealth management, brokerage, treasury
and investment services.
PART A
PESTLE Analysis of JP Morgan company.
PESTLE analysis is a potent method that helps to macro examine a company by analyzing
its political, economic, social, technological, environmental and legal position on a broad scale
on external basis. It provides insights on effect of the above factors on the company exposing
risks.
POLITICAL FACTOR
Policy changes that regulate investment and limit public banking can be made due to political
intent to harm JPMC’s core business. Many countries like china can start trade war due to
political reasons and this can have an effect on slowdown of US economy (Christodoulou and
Cullinane, 2019). Impact of BREXIT on US economy is also gigantic. Since much of the import
and export trade of Europe is BREXIT dependent, it has huge political influence on JPMC
overall operating demographic.
Developing countries still do not trust IP related internet firms. This poses a need for political
pressure on these specific countries generate awareness and trust in giant online banking firms

like JMPC. There are increased tensions globally with US and other countries due to
mismanagement of the supreme leaders of US which affects JPMC image globally as it is a US
based firm. This can cause difficult expansion and even closing business in some countries.
ECONOMIC FACTOR
JMPC is one of world’s largest wealth management firms with billions in its wallet and a
gigantic balance sheet, it is a mammoth player in the sector with its global reach. It has huge
capital investments and a highly diversified portfolio (Aderounmu and Adepoju, 2019).
Globally the markets are showing signs of growth that JPMC can capitalize by its huge
expenditure budget. Developing countries worldwide are undergoing rapid growth which has led
in increased feasible operating areas for the company.
A sign of worry for JPMC is the rise of debt levels in the United States. Increase in college
tuition, expensive healthcare and many other reasons have led to rise in debt levels which restrict
people from investing. This can easily be resolved good policy changes and pressure from
corporates.
Growth of GDP and unfeasible interest rates of banks in other countries also play a crucial role
in the survival of JPMC in other countries. Increased interest rates will mean more profit but less
customers.
SOCIAL FACTOR
Public trust on online run banking services is improving day by day which has helped the
company expand more easily provide banking services to the general public. Therefore socially,
the brand is expected to glow in the coming times.
With the smartphone revolution more people can access JMPC banking services at their comfort.
This means that deposits and cloud services can be given over the smartphones and no regional
office is intrinsically required. This can allow rapid expansion (Kursun and et.al., 2017).
The social demographic of a region also plays a major role in the reach of its services. In some
parts of the world women are not seen fit in wealth management so banking is male centered.
TECHNOLOGICAL FACTOR
New technologies are being tested and developed every day and old technology is being outdated
within few years. Times are evolving such that even newly made tech will be dated only for a
few years.

JPMC is currently the industry leading bank that offers state of the art tech services to its clients
such as IP tracking and global client access (Donnellan and Rutledge, 2019). Many of its
competitors are on track to copy its services and thus its services will not remain unique to
JPMC.
Constant evolution in the technological sector is required today so the company should invest
heavily in tech research and development and constantly innovate to keep leading the industry
forward.
Impact of a particular tech on the market is also plays a key role in its supply and demand. If a
particular technology is immensely useful in banking, other competitors will be quick in copying
or making their version of the tech.
ENVIRONMENTAL FACTOR
Since JPMC is a wealth management company it is not largely impacted by environmental
factors however some aspects of its working do require right moves in pledging towards an
environmental friendly operations.
Every unit of its firms can strive to use eco friendly materials, reduce dependency on paper and
perform routine tasks digitally. Since the company has such a broad impact on the world, it can
try to create awareness on climate change and global warming (Schyns, 2016).
Dependency on renewable energy sources for power consumption should be increased and a big
portion of offices should install solar panels on the roofs. This will not only reduce operating
costs but also help project the company as a future conservative one.
LEGAL FACTOR
Data protection laws and cyber security reforms have led many companies to remake its data
acquisition, distribution and storing procedures. JPMC also had to face a data related controversy
in February of 2018 which had a negative effect on its brand image on data protection.
The number of employees in JPMC is extremely high so chances of people facing internal
discrimination is very high which can cause unhealthy work atmosphere and worse lawsuits that
damage the company’s reputation forever (Kursun, JPMorgan Chase Bank NA, 2016).
JPMC operates in many countries so money laundering can be done easily which is a huge
problem as capitals go upwards of multibillions each year.

SWOT analysis of JP MORGAN CHASE
SWOT analysis is a powerful tool in determining and analyzing, current and future prospects of
any company that seeks to improve on itself by the means of currently available information.
Among the different analysis tools it is the most efficient in providing overview analysis of any
entity. The study helps to understand internal as well as external business affairs and project
planning. It helps to build on what one does well, to address what one lacks and to minimize
risks. This study when done on JP MORGAN CHASE provides with remarkable insights on its
structure.
STRENGHTS
JP Morgan Chase has been the industry leading player in the banking sector since many years
which has helped itself to expand in over 60 countries and get a good foothold in its market i.e.
the US. It has assets worth billions which are spread all over the world which strongly helps to
provide customer reach (Liu, 2018). Through years of collective effort, it has made clients with
many business institutions and government clients.
The company operates in investment banking, commercial banking and financial services, all of
which are huge in terms of market capital and profit feasibility. This provides easy opportunity to
maintain good cash flow. Some of its other services include securities, treasure services and asset
management which diversifies its portfolio further into many divisions and thus reduces
dependency on one particular service.
Its top level executives have proved good financial decision making as the capital to be managed
is sky high. It has helped deliver positive branding and generate trust of both businesses and the
general public by which its global presence and brand image has grown exponentially over the
last decade. This has helped it to gain substantially more customers and expansion rates than its
competition.
Evolving with time is also one of the main strengths the company as many old companies have
had to force close due to lack of future planning which lead them to be outdated even with a
strong user and brand image (PENQUE, 2019). Focus on technology with the use of highest end
hardware used to monitor and store data, the use of machine algorithms in determining growth
are all big reasons why the company is dominating the market in many sectors. This has led to
future proofing of customer database as all data has been fed into online servers.

Diversified revenue model across different segments that are corporate, investment and
community related in nature has lead mammoth leaps in reducing risks. It also has strong
liquidity and capital positon as the deposits seem to be growing and loans are decreasing which
has increased its ratio of deposits to loans.
WEAKNESSES
Expenditure management is very susceptible to a poor decision that can affect the dominant
power of a big company. The operational expenses have also been increasing year over year with
no visible reason internationally that has led some people to question its profitability in the
foreseeable future. If the expenses are compared to the other competitors in the industry we find
that it has one of the highest of them all.
Since most of the work has to be done online, any technical glitches will force the work to be
done completely again entirely or proceed with loss of information and data (Kaur and Malhotra,
2016). Online breaches also remain a constant threat in this modern day as the number of
cybercrimes seem to increase every day and cause security issues that are also harmful for the
brand image worldwide.
A major part of its revenue is from the United States which leads to it being highly dependent on
these markets. Any market fall or business slowdown in the US will affect its overall
performance internal or international. Sudden changes in policies of these areas will have a huge
impact on it revenue.
International presence also had the risk of damaging reputation everywhere if a controversy
sparks in a particular region or state as news is being distributed internationally within seconds
with the advent of the internet.
OPPORTUNITIES
Global per capita income is projected to increase and so is the wealth management business all
around the world, so it paves way for big players like JPMC to capture the increase in the overall
market (Kim, Rim and Lee, 2019).
Even with many countries covered, there are still many markets yet to be touched. This however
should be done slowly with caution but if more markets can be covered it will bump the global
share even more.

Online services are more prominent then ever and so is need to capitalize the presence on
smartphones and smart gear. The need for physical credit cards can be eliminated by use of
online credit cards that will even save the cost of printing and maintaining credit cards.
Rise of cryptocurrency also presents itself as a huge opportunity that can be worth more in the
coming times. Several block chain mechanisms are also in the trend and big companies can
easily capitalize on this opportunity.
THREATS
Slowdown in any big international market can trigger recession which will directly affect the
cash flow and hunt down the roots of wealth management. Changing policies and regulations can
also restrict the company to suffer loss on already established demographics (Solihin and et.al.,
2019).
Cybercriminal groups are evolving with every new day so data security and cyber privacy can be
compromised. In order to combat this constant upgrades in online security is needed. This need
will only grow higher with time.
Since the work is becoming more online day by day, technology giants like Microsoft and
Google can step into capital management and take over the huge market share by clever
advertising.
Porter’s 5 force analysis in JP Morgan
Porter’s Five force model analysis helps in effectively explaining various industries which helps
in sustaining various levels of profitability. This helps in measuring competitive attractiveness,
profitability and competition intensity if the industrial market. This is useful in analysing the
strengths and weaknesses of the current position within the company.
There are 5 forces of Porter’s analysis-
1. Threat of new entrants:
The threat of new entrants as a significant force within the industry is relatively small. Any
company attempting to compete directly on the same level with JPMorgan or the other major
U.S. money-centre banks would face significant obstacles (Christodoulou and Cullinane, 2019).
This can be handled by making and innovating new products and services. New products and

services not only attract new customers but also give a reason to the old customers to stay
connected with JP Morgan. Economies of scale can be built so that they can reduce the fixed
price per unit. Research and development can also be a factor that can influence it. New entrants
are less likely to enter a dynamic industry where a company like JP Morgan is already
established.
2. Bargaining power of suppliers:
This threat can be tackled by building efficient supply chain with multiple suppliers and also by
using different materials in experimenting product designs so that if the price of one company
increases, they can shift from to another company (Stolz and Lai, 2019). And also establishing
relationships with the companies so that the business of depends upon them. JPMorgan must
address its overall bargaining power by offering an attractive salary and benefit packages to
retain the best employees.
3. Bargaining power of purchasers:
The two main suppliers for a bank are the depositors, who supply the primary resource of capital,
and employees, who supply the resource of labour. In regard to depositors, the situation is
essentially the same as that delineated under the bargaining power of consumers
There are demanding buyers in the industry (Fan and et.al., 2018) . Everyone wants to pay less
price and avail the best offers. Consumers' overall bargaining power is an important factor
influencing the industry. Individual consumers, especially in the retail banking marketplace, have
relatively little bargaining power since the loss of any one account has a minimal impact on
JPMorgan's bottom line. However, in the aggregate, the bargaining power of consumers is
greater, since the bank cannot afford to suffer mass defections of depositors. There has to be a
large base of customers. It will provide the firm an opportunity to streamline its sales and
production process and also reduce the bargaining power of buyers. Customers are attracted to
offers and discounts and that when a company like JP Morgan gives it, they would be attracted to
it more. JPMorgan addresses the issue of customer bargaining power primarily by extending
attractive offers to potential new clients (Chiang, 2016). It also continually makes efforts to get

existing clients to open additional accounts and sign up for additional services, which effectively
increases the switching cost for consumers by making it more troublesome for them to transfer
their finances to another bank.
4. Threats of substitute products and services:
The threat of substitute products has increased in the banking industry, as companies outside the
industry have begun to offer specialized financial services that were traditionally only available
from banks. If a new product or service is launched in the industry, the industry profitability
suffers. So to overcome this challenge, focus should be on services also rather than only on
products (Doyran, 2017). Rather than just focusing on what the customer is buying, focus should
be on the need of the customers. And by also increasing the switching cost of the customers.
JPMorgan has responded with initiatives that include a division focusing on small business
lending, and establishing its own digital wallet service, Chase Pay
5. Rivalry among existing competitors:
The strongest force of Porter’s model is the rivalry among existing competitors. There is an
intense competition faced by the company domestically from the other major money centric
banks. JPMorgan deals with industry competition in three main ways. It attempts to distinguish
itself in the marketplace primarily on the basis of its long, recognized heritage and experience. It
aims to stay on the cutting edge of offering customer convenience and low-cost and cutting-edge
services. It has a history of acquiring smaller banks, removing some potential competition from
the marketplace. If there is rivalry among the existing competitors in the market, it will reduce
the price and hence impacting the profitability for the industry (Nurlansa and Jati, 2016).
Building a sustainable differentiation can reduce this threat. By building scale so that it can
compete better, and also collaborate with the competitors so that the market size can be increased
rather than just competing in the small market.

PART B
Different types of strategic directions available to JP Morgan
In case of porter’s generic strategy, this is one of the major strategic directions which is
available to JP Morgan in respect of identifying the competitive advantages which is gained
through targeting the particular segments. It mainly carries three strategies such as:
Cost: It is one of the major strategies which is mainly adapted by companies in respect of
targeting the right market through providing the products at fair prices. In banking sector, the
war of costs is raised through getting good return on particular investment. In context of
managing cots in the business, it results in increasing sales which indirectly results in growth in
business (Firoz Suleman, Rashidirad and Firoz Suleman, 2019). It is not necessary that cost is to
be managed in the form of the selling o buying foods but it also had to undertake the
management in form of raw materials or any advanced technology or economy of the company.
Thus, through this aspect, most of the companies carry the command over the prices through
sustaining the business in market for longer way.
Differentiation: In this case, it is necessary that products or services which the company are
offering must be differentiate from the other company products. Through this manner it is easy
for the customer to chose the right products and also helps company to plan innovative strategies
to retain the customer interest (Islami, Mustafa and Latkovikj, 2020). Thus, in such aspect’s
differentiation is also to be done in respect of providing the uniqueness in the products so that it
is easily preferable by the customer for longer way.
Focus: In this strategy, the focus is to be maintained on the particular segment so that the right
customer and areas are targeted in respect of enhancing the business. It mainly carries two types
such as
Cost focus: In these aspects, the companies main focus is on the cost so that they provide fair
prices to the targeted segment. Through this manner, they enhance their interest by providing
better quality at fair prices (Viltard, 2017). As buyers are confused to choose the right products,
thus in cost focus it helps in enhancing their needs though targeting them by providing less cost
profits with high rated quality standards.
Differentiation focus: In this, the firm differentiate the products from the other compony
products in that particular target segments. Through this manner, the special needs of the
customer are to be fulfilled through identifying their demand regarding preferring the particular

products or conducting the research to fulfil their needs at better scale (Hales and Mclarney,
2017).
Thus, by adapting the Porters Generic strategy, JP Morden applies the differentiation
strategy in which they mainly differentiate their services with the other company services. The
main reason of choosing this strategy is that customer mainly demand unique services which is
not available at any other company or also such services is beneficial to them. Thus, in such
aspects to get the return policies at higher rate or also get unique services, helps them in gaining
more business. This results in sustaining the business in market for longer way and also attract
the customer towards their innovative and unique investment policies.
Strategic Management plan with strategies, tactics and objectives.
Strategic management plan is considered to be an effective framework which is mainly used
for communicating within the organisation in order to assist organisation goals priorities, energy,
strength and operations, ensuring employees, configuring resources, stake holders et cetera in
order to reach intended outcomes.
 The key objective of the JP Morgan Company is to become a global leader in financial
services and also offer solutions to key corporations, institutions and government in
across 100 countries.
 JP Morgan Asset Management Company focus on building stronger portfolios and for
150 years which includes intermediaries, individuals and institutions.
 JP Morgan focuses on empowering better decisions which helps in
meeting global team in order to attain market issues which helps
in making right investment decision.
Bowman’s Strategy clock is considered to be an effective strategic model which helps in
using marketing in order to effectively analysing the competitive position within the
organization What is Bowman’s Strategy Clock? .2019. This study is useful to critically
evaluate the cost and competitive advantage which helps in minimizing the cost of their
businesses. The company must focus on positioning there business who in turn focuses on
persuading the consumers which helps in gaining high competitive market within the
financial industry. The differentiation strategy in turn eventually focuses on offering
customers in order to offer customers which helps in attaining high degree of added value to
the products and services offered by the company. The customers must in follow a strategic

plan who focuses on carrying a risky strategic plan and also offer various financial services
which in turn helps in cutting their cost and expenditure What is Bowman’s Strategy
Clock? ,2019. This is useful in cutting their cost which helps in attaining higher operational
goals and objectives of the JP Morgan. The JP Morgan Company must focus on cutting their
cost with the key objective to gaining value for the money. This company must eventually
focus on producing large number of offerings in order to make competitive market in order to
attain higher customer share and profitability.
CONCLUSION
From the above carried out study it has been summarized that, the financial industry in turn
is largely influenced by the internal and external environmental factors. This study examines
that, trust of the public on online run banking services is improving day by day which has helped
the company expand more easily provide banking services to the general public. Constant
evolution in the technological sector helps JP Morgan Company to stand within the market.
Moreover, this study also summarizes that, the major strength associated with JP Morgan is that,
it is one of the leading player in the banking sector and offers various financial services in across
60 countries. On the other hand the key weakness with this company is related with high
expenditure and fall in the business slowdown in U.S.A. Through Porter’s five force analysis, it
has been concluded that, rivalry among the existing competitors in the market, it will reduce the
price and hence impacting the profitability for the industry. JPMorgan must address its overall
bargaining power by offering an attractive salary and benefit packages to retain the best
employees. Furthermore, theories, models and concepts in order to assist with interpretation and
understanding of strategic direction in order to attain greater heights for the organization.

REFERENCES
Book & Journal
Aderounmu, A.F. and Adepoju, A.O., 2019. Analysis of Forest Based Mortar and Pestle
Marketing in Oyo State, Nigeria. Journal of Economics, Management and Trade, pp.1-7.
Chiang, C.H., 2016. Securing Healthcare's Quantified-Self Data: A Comparative Analysis
Versus Personal Financial Account Aggregators Based on Porter's Five Forces Framework for
Competitive Force. Naval Postgraduate School Monterey United States.
Christodoulou, A. and Cullinane, K., 2019. Identifying the Main Opportunities and Challenges
from the Implementation of a Port Energy Management System: A SWOT/PESTLE
Analysis. Sustainability, 11(21), p.6046.
Donnellan, J. and Rutledge, W.L., 2019. A case for resource‐based view and competitive
advantage in banking. Managerial and Decision Economics, 40(6), pp.728-737.
Doyran, M.A., 2017. How Goldman Sachs Turned the Great Recession into Competitive
Advantage Using Strategic Management. Rutgers Business Review, 2(3), pp.357-376.
Fan, B and et.al., 2018. Development of tactical solutions for the e-credit card issuing
industry. International Journal of Accounting & Information Management.
Firoz Suleman, M., Rashidirad, M. and Firoz Suleman, S., 2019. The applicability of Porter's
generic strategies in pure online firms: A case study approach. Strategic Change. 28(3). pp.167-
176.
Hales, G. and Mclarney, C., 2017. Uber's Competitive Advantage vis-à-vis Porter's Generic
Strategies. IUP Journal of Management Research. 16(4).
Islami, X., Mustafa, N. and Latkovikj, M. T., 2020. Linking Porter’s generic strategies to firm
performance. Future Business Journal. 6(1).p.3.
Kaur, R. and Malhotra, H., 2016. SWOT analysis of m-commerce. In Securing transactions and
payment systems for m-commerce (pp. 48-67). IGI Global.
Kim, Y.S., Rim, H.C. and Lee, D.G., 2019. Business environmental analysis for textual data
using data mining and sentence-level classification. Industrial Management & Data Systems.
Kursun, E and et.al., 2017. System and method for research report guided proactive news
analytics for streaming news and social media. U.S. Patent 9,753,913.

Kursun, E., JPMorgan Chase Bank NA, 2016. System and method for research report guided
proactive news analytics for streaming news and social media. U.S. Patent 9,268,770.
Liu, G., 2018. Business Premium Collection. Journal of Business & Finance
Librarianship, 23(3-4), pp.249-258.
Nurlansa, O. and Jati, H., 2016. Analysis porter’s five forces model on Airbnb. Elinvo
(Electronics, Informatics, and Vocational Education), 1(2), pp.84-96.
PENQUE, M.B., 2019. Flexible workspace in corporate real estate. A swot analysis for
investment professionals.
Schyns, P.F.M., 2016. The technological future of the wealth management industry for portfolio
management investment services (Bachelor's thesis, University of Twente).
Solihin, M and et.al., 2019. SWOT Analysis on The Transformation of Islamic Higher
Education. Jurnal Pendidikan Islam, 5(2), pp.159-174.
Stolz, D. and Lai, K.P., 2019. Impact investing, social enterprise and global development.
Routledge.
Viltard, L. A., 2017. Strategic mistakes (AVOIDABLE): the topicality of Michel Porter’s
generic strategies. Independent Journal of Management & Production. 8(2). pp.474-497.
Online
What is Bowman’s Strategy Clock? .2019. [ONLINE]. Available through:<
https://www.marketing91.com/what-is-bowmans-strategy-clock/ >