Internal and External Analysis for JP Morgan

This report provides an analysis of JP Morgan, including its internal and external factors. It includes a SWOT and PESTLE analysis, stakeholder analysis, and Porter's five forces model. The report also discusses the company's strengths, weaknesses, opportunities, and threats, as well as its resources and capabilities.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................3
Internal and external analysis for JP Morgan..............................................................................3
Porters-five-forces model............................................................................................................8
PART B.........................................................................................................................................11
Different types of strategic directions for company..................................................................11
Recommendation for growth of JP Morgan business................................................................12
Strategic management plan........................................................................................................12
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
Business strategy refer to the working plan of organization for achieving their aims,
prioritizing business objectives, optimizing financial performance and competing successfully
with their organizational model. It is defined as combination of all essential decisions taken and
actions performed by company to accomplish goal and to protect a competitive position within
specific marketplace.
The present report is based on JP Morgan, company is recognized as one of the largest
financial institutions in UK and provide their potential consumers with range of integrated
services from across franchises under JP Morgan Cazenove brands.
This report explains the SWOT and PESTLE analysis of company and define its
capabilities through appropriate models or framework. This study justifies competitive
environment using Porter's five force model, different types of strategic directions and
recommendation based on appropriate growth strategies & platforms. Furthermore, it also
clarifies the strategic management plan with tactics, strategies and objectives in context of
company.
PART A
Internal and external analysis for JP Morgan
External analysis
The business run in environment which changes very frequently and needs to be managed
by company to a great extent. Thus, it is very necessary for JP Morgan to timely analyse all its
environmental factors so that if there are any changes then it can be identified and addressed if
the changes are relevant for company (Aithal, 2017). For this JP Morgan uses technique of
PESTLE analysis which is discussed as below- Political- this is a factor which involves changes taking place in the political sector of the
country. JP Morgan follows all regulations and policies specified by government and
because of this there are not much political pressure over the company. But there is a
negative impact over working because of Brexit. This is pertaining to the fact that now
operations of JP Morgan are being affected in negative way and the profitability of
company is decreasing. Economic- This includes the changes taking place within the economic factors such as
interest rates, forex rates, inflation and many others. In current phase the inflation is high

and this is an opportunity for JP Morgan as the people for fulfilling their basic need will
take loans form bank and this will increase the profitability of the company and will be
beneficial for company. Social- This is the factor which includes the changes taking place within the attitude,
values, beliefs which the people within the society has for the company. In the current
scenario the consumer is getting attracted towards banking through mobile phones and
internet. Thus, this is an opportunity for JP Morgan as they can develop more facilities
for consumers over their mobile phones. Technological- This refers to the changes taking place within the technology sector of
the company. There are many advancements in the field of banking technology which
needs to be grabbed by JP Morgan to increase its profitability. This includes technology
like artificial intelligence, blockchain technology and many other. This adaption to the
latest technology will increase the efficiency of the company to work (Singh, Garg and
Luthra, 2018). Legal- This sector comprises of all rules, regulations and laws which are applicable over
the effective working of company. This is a major issue which might assist JP Morgan to
build a good image within the competitive market. This is because of the fact that if JP
Morgan abides by all the laws and regulations then this builds trust of consumers over the
company. Thus, for this JP Morgan ethically complies with all the laws and legislations. Environmental- This is a factor which involves changes taking place in the environment.
The latest trend is of companies taking care of the environment and for this JP Morgan
also takes part in CSR. The company adds a part of their profits in taking care of
environment by lowering down the carbon footprints. This impact JP Morgan because if
they will not take care of environment then their consumer will not interact with the
company and hence profitability will decrease.
Stakeholder analysis
The stakeholders are the people who are interested in the working efficiency of the
company. However, this is majorly because of the reason that the stakeholders are the people
who work for the benefit and growth of the company. The major stakeholders of JP Morgan are
of two types internal and external stakeholders. The internal are the one who are directly linked
to the performance of the company and the external are the one who are indirectly related to the

profitability of the company. Thus, it is very necessary for JP Morgan to keep all the
stakeholders happy and satisfied.’
The major stakeholder of JP Morgan is the employees and major interest of employees is
in salary and salary will increase if the employees will work hard. Also, effective working of
employees will help them in gaining more bonus and incentives which will again motivate them
to work harder.
Another important stakeholder is consumers and they are interested in product and
services which JP Morgan provides for. These are most important and powerful stakeholder
because of the fact that if consumers will not be happy then they will not like to do transaction
with JP Morgan and this will decrease the sales of company. Thus, consumers are most powerful
stakeholder as if they do not like the product and services then company may fail.
One more important stakeholder of JP Morgan without which company cannot run
effectively is investors. Investors are the people who invest their money in working of JP
Morgan. Thus, these are most important stakeholder and are much interested in profits of
company (Eskerod and Larsen, 2018). These people are also powerful because if they will not
get profit then they will take back their investment and this will decrease the operating efficiency
of employees.
With this analysis it can be said that it is very important for JP Morgan to analyse its
external environment. It is so because there are many changes in these factors and if these are not
addressed by the company then it will lose its market share and profitability. For instance, if JP
Morgan will not take into consideration the technological advancement then the competitors will
use it and will go ahead. The solution to this problem is only possible with help of the external
analysis only.
Internal analysis
Only analysing the external environment is not enough instead it is necessary for the JP
Morgan to outline its strengths and weakness and capabilities (Madsen, 2016). This is necessary
due to the reason that the internal capabilities of the company will outline that whether JP
Morgan is capable of adapting to those changes or not. For this SWOT and VRIO analysis will
be done in order to know strength and weakness along with internal capabilities of VRIO.
SWOT analysis

This is a model which help the company in knowing its strengths and weakness and the
opportunities and threats present in the external environment. Strength- Major strength of JP Morgan is strong financial position in the market. This is
a strength because of the fact that because of strong market position goodwill and market
share of JP Morgan is very high. Weakness- Most common weakness of JP Morgan is the latest developments in field of
technology. This is a weakness because many a times employees resist in adapting to the
latest changes in technology. This is because they assume that if new technology will be
installed then their value and work will decrease and they might be called of form their
jobs. Thus, there is low employee morale which impacts the working efficiency of JP
Morgan. Opportunities- The major opportunity for JP Morgan is to use the social media and
mobile phone penetration for attracting more of the consumers. This is an opportunity
because the use of mobile for banking transaction is the latest trend and company must
adapt to this. Threat- One of the major threats for JP Morgan is the high and intense competition
which is there in the financial market. There are many companies which are there in the
financial market and deals in lending money to other people. Thus, this decreases the
number of consumers as they get attracted towards the other companies (Leiber,
Stensaker and Harvey, 2018).
VRIO analysis
This is a technique which is used in order to evaluate the resources of the company and to
analyse that whether they are able to achieve the competitive advantage or not (Hernández and
Garcia, 2018). Value- This includes the resources which are of value to JP Morgan and which assist in
increasing the profitability of the company. The type of resources which are of value to
JP Morgan are employees, financial resources, cost structure, and research and
development department. The financial resources are valuable because without finance
no work can be done. Also, for managing finance most important is to allocate and make
cost structure in effective manner and because of this cost is also a valuable structure.

R&D is a valuable resource because there are many changes in environment ans this can
be managed by R&D only. Rarity- These are the sources which are rare for the company and have very limited use
of these resources. These resources are rare as the competition is high and every company
uses these resources. The rare resources of JP Morgan are patents, financial, cost
structure and many others. Patent are rare resource as these can be used by other
competitors as well. Financial and cost structure are also rare as these are very limited
and user of these are many. Imitability- These are the resources which can be copied or imitated by the competitors
or the similar companies of JP Morgan. The imitable resources of JP Morgan are cost,
financial and employees. Employees are imitable resource because competition is high
and other competitors try to attract employees of JP Morgan to go to other companies.
Also, cost and finance are imitable because JP Morgan has effective use of cost structure
and finance because of this these are imitable and can be copied by other similar
companies. Organization- The proper organizing and use of all the resources is very necessary for
the company. This is pertaining to the fact that just listing the resources is not enough it is
also necessary for JP Morgan to effectively arrange for the resources. The resources
which are properly organized for effective use are distribution network, finance, cost,
employees and research and development. The finance and cost are most organized
resources as if these will not be organized then whole working of JP Morgan will be
effective.
Resources Value Rarity Imitability Organization
Financial
resources
   
Employees   
Distribution
network
 
Cost structure    
Patent 
Research and
development
 
IT 
Technology    

In accordance with the above analysis of VRIO model it can be evaluated that the
resources which can provide a competitive advantage to JP Morgan and which are financial
resources and cost structure. These are the resources which will provide JP Morgan a
competitive advantage over the other competitors.
In the end it can be said that both the internal and external analysis is very important for
the company before doing the planning or before developing the strategies for development of
the business further (Indartono and Wibowo, 2017). These are necessary as JP Morgan will come
to know about the latest developments going on in the external environment and with internal
analysis company will come to know about the capabilities that whether JP Morgan is able to
adapt to these changes or not.
Porters-five-forces model
Michael Porter Developed this business analysis tool that helps firm to analyse relative
strength of five primary forces.
Bargaining power of suppliers-
The bargaining power of suppliers is weak force, number of supplier in banking sector in
which JP Morgan operates is a lot as compared to its buyers, it means that suppliers have less
control over prices, it makes their bargaining energy as weaker force (Hall, Foxon and Bolton,
2016). Depositors and employees are the two major suppliers for financial firm. In context of this
force suppliers of labour have little bargaining strength apart from main governmental
employees.
Bargaining power of consumers-
The degree of this force is medium, consumers in retail banking sector have less
bargaining power because bottom line of company had minimal impact due to loss any
individual account (Asadi and et.al, 2017). It is one of the most essential factors that influence
overall banking industry the most. With low energy of bargaining, consumer would not be able
to make any effect on business operations.
Threat of substitute products or services-
Threat of this force is low, there are few substitutes available for financial services that
are offered by JP Morgan. They very few substitutes that are accessible are also offered by low
profit earning industries, it means that there is no ceiling on increasing profit that company will

earn in industry. All above factors make threat of substitutes services a lower fore within banking
sector.
Threat of new market players-
The threat of New companies is moderate, recent entrants as major energy inside trade is
comparatively limited, any organizations making an effort to compete direct on identical level
with JP Morgan would face vital barriers. The biggest challenge for new firms are huge quantity
of capital required, cumbersome authorities rules that implement to operations of banking sector.
And size of time needed to identify major model determination.
Competitive rivalry among existing companies-
The degree of this force is high, competition insider sector is the strongest factors for JP
Morgan, they face intense competitors domestically from opposite three main money centre
banks and internationally from different large multinational banking organizations, resembling
Barclays.
Assessment of strategic directions-
This model is most essential for strategic marketing and management planning where
Ansoff matrix framework will be applied to look at the opportunities to raise revenue for
business through creating new services or goods or entering into new marketplace.

Illustration 1: Ansoff Matrix Model
(Source: What is the Ansoff Matrix, 2019)
Market penetration-
Marketing penetration strategy means trying to provide more of the services in existing
market. To do this JP Morgan can try to persuade current consumers to use more, influence new
people to use and gain attention of clients from competitors. Organization effectively use this
strategy, as they can focus on current market and existing products that helps to increase their
market share more than past few years.
Market development-
It includes JP Morgan can try to determine new markets for their existing financial
services, commonly market development strategy is consisted with business expansion procedure
into new market geographically. Company can use this strategy by developing new market

segment for existing services or goods, that helps to enlarge their business size (Chiang, Chen
and Ho, 2016).
Product development –
It is the third strategy of Ansoff matrix model, which is developing new services for new
markets with some different features that gain the attention of consumers towards JP Morgan. It
seen as riskiest plan of all four as company can move into an unfamiliar market when they adopt
this strategy. Organization can use this strategy, they can bring innovation to people from
concept or current services to test through distribution.
Diversification –
Business progress through product development means creating related services and
changes existing things to appeal more effectively to present markets. Diversity of new financial
services that have become available in UK market, examples of modifying things current service
to make them attractive to potential consumers. By adopting this strategy, company can enter
into new market place or sector which is beneficial for them.
PART B
Different types of strategic directions for company
Porter's Generic Strategies
The Strategies are used for evaluating the direction available to JP Morgan
Cost leadership strategy
JP Morgan can adopt the cost leadership strategy that focusses over reducing the cost of
company and increasing the profits. Objective of the company is to increase its market share and
charging lower prices for their product, making reasonable profits on every sale will enable
company to increase its market share. Customers are always towards products that provide
higher quality at reduced prices.
Cost Focus Strategy
In this company will be reducing the prices of product. Main motive at this stage is to increase its
sales by reducing the prices. Company is required to sacrifice some part of quality for reducing

the cost and increasing the sales. At this stage main focus of company is to increase its market
share by sales. JP Morgan is trying to implement their strategy by reducing the cost and
enhancing the quality of their products and services.
Differentiation Strategy
Differentiation strategy focus over making the product of company different and unique from its
competitors. JP Morgan for achieving success in differentiation strategy will be required to
conduct good research for new innovations (Porter's Generic Strategies, 2019.). It has to develop
the ability of delivering products and services of high quality. It will be require to do effective
marketing so that benefits that company is offering is understood by the customers. JP Morgan
has developed the strategy to launch the innovative products in order to enhance consumer's
experience and loyalty.
Focus Strategy
Under the focus strategy JP Morgan will be focusing over particular market. This requires
adequate knowledge of the needs and demands and customers. Company can make profits by
reducing the cost base and focusing over specific market having demand and acceptance of
product of company .JP Morgan is trying to bring out innovative products and services at low
price so that they can gain competitive advantage.
Recommendation for growth of JP Morgan business
After analysing the external and internal environment of business JP Morgan recommend
adopting differentiation strategy that help to generate revenue rather than before. They must
provide new services to its consumers which is beneficial for their business as they can retain
people for longer. Organization is suggested to promote their business operations by adopting the
latest marketing techniques that help to achieve its aims and objectives effectively.
Strategic management plan
Executive summary- In order to gain attention of consumers and
increase profit margin, JP Morgan company
has been used different approaches and

strategies that help to gain its vision and
objectives in effective manner.
Vision- The vision of JP Morgan company is t be the
best financial services organization in the
world with large number of consumer base.
Mission- Mission of firm is to make people able to
contribute and share in rewards of growing
economy, they trust that creating widely shared
prosperity and reducing inequality need
collaboration of government, business and
other non-profit firms, especially in
metropolitan states that strengthen economic
growth.
Objectives-  To increase customer base.
 The second objective of JP Morgan is
to be the most respected financial
service company across the globe.
 Third objective is to increase market
share.
 To make services or products more
effective.
Strategies- JP Morgan develop so many plans and adopt
varied strategies in order to enhance their
performance within marketplace. The strategies
include Ansoff matrix and Porters generic
strategy, in which differentiation strategy is the
suitable for their business as it helps to increase
profit margin.
Tactics- Product- JP Morgan provide financial and
investment banking services to its consumers,

but they can also cater their services to small
firms and some of the largest governmental and
corporate clients as well (Mathur, 2019). It
covered in their marketing mix product
strategy. In order to become the best
organization in the world, they can advise on
corporate strategy and structure.
Price- JO Morgan provide varied types of
services for which they charge different prices.
To gain the attention of people and increase
consumers base, they must adopt competitive
pricing strategy. In credit card segment
company should cut the prices to sustain in
market and gain competitive advantages.
Place- Organization has several service
platforms through which they serve its best to
consumers and other businesses. To gain above
objective, JP Morgan established their image in
market by establishing their own outlet. They
must choose the place where number of people
visit easily without any issues.
People- JP Morgan is highly reputed firm and
therefore they hired skilled people and have
trained workers who are able to communicate
with people and provide whole information
about their services.
Promotion- marketing or advertising is the
best way to gain attention of people that
increase revenue and impact on overall
business practices positively. JP Morgan
should promote their services into market with

the help to adopting digital marketing tools
such as social media platforms. They must use
traditional marketing methods along with
digital one, that helps to gain trust of people.
Procedure- JP Morgan intends to speed app
and simplify forms, there by improving its
consumer experience. They must use digital
channels platforms which will make company
able to deliver personalized and innovative
services at target market.
Physical evidence- Physical evidence for JP
Morgan will be their 5,300 outlets and 15,500
ATMs. The personal websites of this company
that caters access to different services provided
also servers as existence prof.
Implementation- After recognizing all above things, it is the
right time to implement strategies and plan
effectively. JP Morgan will use differentiation
strategy and adopt competitive pricing strategy
that help firm to remain competitive. Company
allocate responsibilities to each of their skilled
and knowledgeable workers for providing 24
hours services to people through online source
as well as physical stores.
Evaluation- Key performance indicator is the best tool used
by organization to monitor the progress and
success of plan. It helps to define the
differences between current and previous profit
margin that show company about its growth
after implementing plan with appropriate

strategies.
CONCLUSION
From above, it has been concluded JP Morgan is one of the leading financial services
organization in UK. By implementing strategic marketing plan after analysing the whole things
such as external environment and internal analysis, organization achieve their objectives in
effective manner, that helps to drive people towards them rather than its competitors. Company
adopt different strategies to generate revenues and gain attention of its target market in
systematic manner.

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