JPMorgan Chase & Co.

JPMorgan Chase & Co. is a multinational company dealing with financial and banking services. It has been noted that JPMorgan Chase & Co. is the largest in the region reflecting on the asset base. The bank is also ranked in the second position basing on the public companies in the United States. JPMorgan Chase & Co. is headquartered in New York in the United States of America. The public company trades in the Stock Securities Exchange through NYSE JPM, S&P 500 Component, Dow Jones Industrial and Average Component. The predecessors of JPMorgan Chase & Co. are J.P. Morgan & Co. and Chase Manhattan Corporation after the merger. JPMorgan Chase & Co. was founded in 2000, key person identifies with Jamie Dimon as the Chief Executive Officer (C.E.O.), president and Chairman of the financial institution. Products offered by JPMorgan Chase & Co. includes consumer banking, commodities banking, corporate banking, insurance, finance, credit cards, global banking, foreign currency exchange, risk management, mortgage loans, underwriting and treasury services.

Vision, Mission of JPMorgan Chase & Co.

JPMorgan Chase & Co. brand is known as Morgan brand and has earned loyalty among the target customers in the world. The Vision statement for JPMorgan Chase & Co. identifies with the provision of services that are unparalleled to the clients through analytical insights as a means of empowering clients, in facilitating effective management of human assets. This is an indication that JPMorgan Chase & Co. is committed to improving the livelihoods of the target customers in the world (Crisafulli, 2011). It is argued that the vision statement of JPMorgan Chase & Co. is critical, since the bank engage the vision in envisioning the future. The vision statement of JPMorgan Chase & Co. has defined the way the organization will desire to be in the future, this is a long term view engraved in the eyes of the stakeholders.

The mission of JPMorgan Chase & Co. is to be one of the best financial institutions in the globe through the available platforms and heritage. The mission statement of JPMorgan Chase & Co. has set the main purpose of the organization in the target market; the meanings are attached to the existence of the organization and also to the strategies engaged in achieving the vision of the organization.

The mission statement of JPMorgan Chase & Co. has been influential to the success of the organization, since it has set desired levels of performance, while at the same time the vision statement has been critical in acting as a source of inspiration to all stakeholders involved within an organization (JPMorgan Chase & Co., 2013). Effective and clear vision statement and mission statement has been beneficial to JPMorgan Chase & Co. The statements emphasize on the bank reinforcing its actions in realizing the desired outcomes.

Five forces of Competition (Porter’s)

Porter’s five forces of competition reflect on the bargaining powers of the suppliers, intensity of existing rivalry in the banking sector, threat of substitutes, bargaining power of the target customers and the threat of the competitors.

Intensity of existing rivalry in the target market, JPMorgan Chase & Co. is the dominant bank in the industry after the merger and acquisitions that happened with the J.P. Morgan & Co. and Chase Manhattan Corporation (Jpmorganchase.com, 2013). The banking industry has four major players identifying with the Big Four Banks in America namely; Morgan, Bank of America, Wells Fargo and Citigroup. It can be argued that JPMorgan Chase & Co. has relatively limited competitors considering that it is the largest bank in the region (WetFeet, 2007). JPMorgan Chase & Co. has been engaging in high levels of risk taking which has diversified the spirit of investing in the United States.

Threats of substitutes are real in the target market, it has been noted that the majority of people in the target market holds multiple accounts with diverse banks and have a general feeling that the operations of all financial institutions are the same, in the same context, it means that JPMorgan Chase & Co. has been working extra hand in proving different from other banks, which is key to developing a competitive advantage in the target market. The success of JPMorgan Chase & Co. has been attributed to the positive engagement of the target customers. There are many substitutes in the target market in the United States, particularly with the Four Big Banks. Threat of substitutes is high due to the high competition among the Four Big banks in the United States among other banks (Crisafulli, 2011).

Threat of new competitors is limited since the banking industry requires high capitalization to initiate the venture, and that there are diverse state regulations in the line of business. It has been noted that investment banking customers are characterized with high switching costs, JPMorgan Chase & Co. value the trust of customers in creating a competitive edge, banking industry requires advanced levels of technologies that are very expensive to set up, banking industry requires high capital requirements, banking industries in the twenty first century operate under economies of scale making it unwelcoming for new entrants and that there are high barriers to entry in the industry. It can be argued that the threat of new entrants is weak (JPMorgan Chase & Co., 2013).

Bargaining powers of the suppliers are low, it has been noted that JPMorgan Chase & Co. together with the other three big banks in the United States control the financial market in the United States and beyond. Human capital engaged in the Four Big Banks has low bargaining powers, which is an advantage to the banks. American market in the past decade has been characterized with bad job market (World Market Intelligence, 2010). JPMorgan Chase & Co. use volumes as a competitive advantage to the target market, it is argued that suppliers after high volumes are characterized with minimized bargaining powers, since there are probabilities of the producers cutting short on volumes which would have a negative result to the suppliers.

Bargaining powers of the customers are high due to high competitiveness in the financial sector. Customers have the options of borrowing from different banks, in which JPMorgan Chase & Co. has no control over the situation. In times of economic downturns, financial institutions are the worst hit, an indication that the bargaining powers of the customers are high (World Market Intelligence, 2010). It has been noted that the switching costs are considerably low for most buyers. Large pulls of customers are characterized with high bargaining powers, which is disadvantage to the bank.

SWOT Analysis

SWOT analysis in JPMorgan Chase & Co. identify with the strengths, weaknesses, opportunities and threats within the organization. The strengths associated with JPMorgan Chase & Co. are; Morgan is a strong brand in the target market, JPMorgan Chase & Co. has a high presence in the United States and in the world, JPMorgan Chase & Co. has a sophisticated retail banking network, JPMorgan Chase & Co. has a diversified international reach, JPMorgan Chase & Co. offers different financial products that are customized to the needs of the target market and basing on the fact that JPMorgan Chase & Co. has a solid balance sheet (World Market Intelligence, 2010).

Weaknesses with JPMorgan Chase & Co. are attached to the fact that the bank is too professional, JPMorgan Chase & Co. has high attrition rates and that the history of JPMorgan Chase & Co. is associated with bad mortgages due to subprime issues (JPMorgan Chase & Co., 2013).

Opportunities attached to JPMorgan Chase & Co. are based on high probabilities of international expansion, JPMorgan Chase & Co. has high chances of partnering with other financial institutions in the world, JPMorgan Chase & Co. is in a position to seize emerging markets in the financial sector, JPMorgan Chase & Co. is strategically located in cross selling opportunities, JPMorgan Chase & Co. is strategically located in consolidating the industry, JPMorgan Chase & Co. has high access to bailout money and that the bank has reduced competition due to the high presence in the target market (McDonald, 2010).

The threats faced by JPMorgan Chase & Co. are attached to credit market crisis in the united states and in the world, issues of housing crisis affected the brand, mortgage issues affecting the brand, the bank is facing slow expansions in the mortgages in the United States after the markets significantly declined, the banking industry is facing sharp rise of the interest rates that are discouraging customers in taking loans, the rate of credit card write offs is increasing at an alarming rate and the influence of the government intervention in the banking industry (WetFeet, 2007).

Strategic Decisions based on SWOT Analysis

Top management teams within JPMorgan Chase & Co. have been concerned in capitalizing on the strengths and opportunities in place for the bank and also in minimizing the weaknesses and threats facing the bank. In the current world, the business environment is facing diverse changes with globalization and technological advancements. JPMorgan Chase & Co. in responding to the changing business environment since the bank has diversified services offered through E-commerce, where the bank is engaging the platform in offering mobile and online banking to the target customers. Customers are provided with usernames and passwords that facilitate access to the accounts (JPMorgan Chase & Co., 2013). Services accessed are credit cards, due dates, make payments, receiving payments, loans, savings, checking balances and credits among others services. Online banking has been facilitated by mobile computers and phones, hence enabling target customers to access the baking services at the click of the button.

JPMorgan Chase & Co. has created a number of mobile applications that allow real time tracking of bank accounts. An example is the Apple’s iPhone apps that allow customers to have full access of their accounts using the phones or computers. Individuals take photos of funds and the checks, and make the deposits through the phones or computers. JPMorgan Chase & Co. is advancing in technology in gaining a competitive edge in the target market.

JPMorgan Chase & Co. engages Businesses to businesses (B2B), Business to Consumer (B2C) and E-commerce in facilitating most of the business transactions. E-commerce is common with services directly offered to the target customers. B2B is offered by JPMorgan Chase & Co. for business clients (McDonald, 2010). There are a number of promotional tools engaged by JPMorgan Chase & Co. in reaching at the target customers. Common promotional tools are online ads, social networking sites like Facebook and marketing through the traditional methods. The success of JPMorgan Chase & Co. is connected to capitalizing on opportunities and strengths and in minimizing the weaknesses and the possible threats (WetFeet, 2007).

Strategies to improve profitability and competitiveness

Profitability and competitiveness of JPMorgan Chase & Co. can be engaged through a number of strategies. Profitability of JPMorgan Chase & Co. is of interest to financial markets, bank management, academics and supervisors among other stakeholders. Changes in the profitability and competitiveness of JPMorgan Chase & Co. have been influenced by the internal business environment and also by the external business environment affecting the organization (Jpmorganchase.com, 2013).The Market power model is defined by the size of the organization, structure, distribution, the changing needs and wants of customers, the growth factor, possible alternatives and the product and service lifestyle among other factors.

Communications plan

The communication plan in JPMorgan Chase & Co. is designed to improve and increase the communication between the target customers, employees and stakeholders of the bank. The communication plan is designed to improve the satisfaction ratings and the service levels in the banking industry. The move is designed to attract potential customers and in retaining the existing customers (Crisafulli, 2011). The importance of targeting the employees of JPMorgan Chase & Co. is based on the fact that the employees, particularly the junior employees are the point of contact between the customers and the bank. This is where the brand image comes into play, since the perception of the customers on the bank is based on the kind of contact on customers with the bank.

Communication plan in JPMorgan Chase & Co. is facilitated by conducting research and communication audit, monitoring communication strategies, analyzing what is working for the company and what is not working for the company, creating brainstorming sessions where the bank management and the employees within the institution are engaged, training and developing employees towards gaining excellent customer service in the service industry and in rewarding employees performing exemplary as part of motivating the human capital (JPMorgan Chase & Co., 2013).

JPMorgan Chase & Co. (Communication Plan)

Media

Academic economics (Universities and Think-tanks)

Organized labor (Human Capital)

General public

Financial markets (participants and commentators)

Government

JPMorgan Chase & Co.

Communication Plan

Business sector

The communication plan is also essential in encouraging employees openly communicate with the bank management on the dislikes and the likes basing on the customer experience, hosting focus groups who are non-members in spotting areas of improvement and encouraging constant feedback from the customers on the levels of the services offered by the bank (Jpmorganchase.com, 2013). The communication plan will be influential in letting the stakeholders of JPMorgan Chase & Co. develop relevant strategies critical for the sustainability of the bank.

Corporate governance mechanisms

Corporate governance mechanisms in JPMorgan Chase & Co. are designed in controlling the managerial actions of the bank. It has been noted that corporate governance mechanisms are critical in setting strategies guided at meeting the strategic goals of the organization (WetFeet, 2007). Surveys have indicated that the corporate governance mechanism in the bank combines policies, controls and guidelines that enable the organization to meet the desired objectives by making sure that the needs and wants of the stakeholders are addressed (World Market Intelligence, 2010).

JPMorgan Chase & Co. engage internal mechanisms, external mechanism and independent audit in making sure that the organization is running as desired. Internal mechanisms are engaged in developing control models in monitoring the activities and the progress of the bank (JPMorgan Chase & Co., 2013). The model also develops corrective actions in making sure that the organization comes back to the desired track. Internal mechanism addresses the internal objectives of the organization including the interests of the managers, owners and the employees. The objectives set by the internal mechanisms in JPMorgan Chase & Co. focus at independent internal audits, management oversight and the structure of the top management teams as pertaining to the levels of segregation of control, responsibility and on the development of policies (McDonald, 2010).

External mechanism focus on issues affecting JPMorgan Chase & Co. originating from outside the bank. Surveys have indicated that such external mechanism identify with trade unions, regulators, governments and financial institutions among others. The objectives of the external mechanism in JPMorgan Chase & Co. are also affected by the legal compliance and the management of debts among other factors (Crisafulli, 2011). It has been noted that external mechanism exerts pressure to the bank through regulatory guidelines and union contracts. External organizations aligned to the bank have also been influential in suggesting guidelines relating to the best practices in facilitating business relationships among the organizations. Compliance and status of corporate governance relating to the external business environment is communicated to the external stakeholders, in which JPMorgan Chase & Co. tap in improving the best practice of the bank.

Leadership in JPMorgan Chase & Co.

JPMorgan Chase & Co. is under the leadership of James Dimon as the C.E.O., there are close indications that the bank in an example in corporate leadership of huge organizations. JPMorgan Chase & Co. leadership is supported by advanced levels of risk management and learning from the past mistakes (Jpmorganchase.com, 2013). During the 2008 recession that started in December 2007, it was noted that the leadership of Dimon JPMorgan Chase & Co. was strong to an extent that the bank remained strong amidst the recession. Effective risk management at JPMorgan Chase & Co. minimizes or eliminates losses depending on the business environment. Learning from past mistakes has enabled JPMorgan Chase & Co. to propel successfully even in murky business environments (JPMorgan Chase & Co., 2013).

This paper recommends the full involvement of the employees in the decision making processes. It was noted that teamwork and team spirit is weak within JPMorgan Chase & Co., where the top management teams tend to make decisions without fully coordinating with the employees who are expected to implement the decisions made within the organization. Teamwork will facilitate more diversity, increased efficiency, better outcomes, better ideas, sense of accomplishment and mutual support.

Responsible (ethical) corporate

JPMorgan Chase & Co. has developed a Code of Ethics within the organization, where the code of ethics is applicable to the accounting, finance, tax, corporate treasury and in the roles of the investor relations. The code of conduct in JPMorgan Chase & Co. is designed in promoting compliance and honesty to the laws, particularly in the financial books of the organization and in the preparation of the relevant financial statements (Crisafulli, 2011).

An example is the scandal that cost JPMorgan Chase & Co. more than one billion United States dollars in fines due to financial fraud that happened in London Whale outlet and two more scandals that happened after the bank billed the credit card wrongly that belonged to the customers. The authorities for the United Kingdom and United States exposed JPMorgan Chase & Co. to legal affairs that led to embarrassments and additional costs to the bank. The bank admitted the facts and was slapped with huge fines. The scandal was against the code of ethics within the institution (JPMorgan Chase & Co., 2013).

The vision and the mission statements are critical to strategic planning and marketing on JPMorgan Chase & Co. in the target market. The meaning of the vision statements and the mission statements are interrelated to some extent. The success of JPMorgan Chase & Co. has been attached to the bank’s primary stakeholders in the financial and non financial sectors. JPMorgan Chase & Co. is a role model to many banks in the United States and in the world.

References

Crisafulli, P. (2011). The House of Dimon: How JPMorgan’s Jamie Dimon Rose to the Top of the Financial World. New York: Wiley.

JPMorgan Chase & Co. (2013). JPMorgan Chase Bank, National Association . Consolidated Financial Statements , 4-134.

Jpmorganchase.com. (2013). JPMorgan Chase & Co. Retrieved November 09, 2013, from Jpmorganchase.com: http://www.jpmorganchase.com/corporate/Home/home.htm

McDonald, D. (2010). Last Man Standing: The Ascent of Jamie Dimon and JPMorgan Chase. New York: Simon & Schuster.

WetFeet. (2007). Jpmorgan Chase & Co. New York: Wetfeet.Com.

World Market Intelligence. (2010). JPMorgan Chase & Co.: SWOT Analysis & Company Profile. Hoboken, New Jersey: John Wiley & Sons.