SWOT Analysis of JP Morgan Chase
JP Morgan Chase (JPMC) is the biggest financial company in the United States. JPMC has five excellent diverse commercial sections. The segments are investment banking, commercial banking, consumer and communal banking, corporate entity, and management of assets. It provides services to different companies and governments in more than a hundred nations (Gay,19) JP Morgan Chase has lots of customers in America, and it also services well known worldwide corporate and government customers. The company has many employees that range from two hundred and fifty-six thousand, where America has more than one hundred and seventy thousand employees.
Strengths in The SWOT Analysis of JP Morgan Chase
JPMC is the top firm in worldwide financial services. It has operations in more than one hundred states and provides services to numerous corporates, government, and institutions’ customers. It provides its services to different kinds of clients. JP Morgan Chase leads in the field of commercial and investment banking and banking services (Morgan, 49). JPMC is among the oldest commercial organizations in the United States, having being in business for about 200 years. Its robust world reach has contributed to its total asset of over $2.6 trillion.
JP Morgan Chase’s capital and liquidity are incredibly robust. JP Morgan Chase’s liquidity and capital hold a powerful position (Morgan, 47). According to the yearly report 2019, the capital ratio has reached over 15%, which is very high and far from the baseline. The firm’s loan-to-deposit ratio has risen to 174%.
JPMC has varied income and balanced streams. The income is shared among its five segments, management of assets, corporate entity, investment banking, consumer and community banking, and commercial banking. Additionally, this organization has bought back approximately forty billion dollars in stock in the previous five years. This possibly will lead to an increase by either 2 percent or three percent of the earnings of every share (Gay,19). The financial institution has about a 6 percent increase in its essential loan portfolio and an approximately 12 percent rise in credit card sales capacity. It has enhanced its market share significantly in many of its trades.
Weaknesses in The SWOT Analysis of JP Morgan Chase
JPMC has several weaknesses, one being the increased rate of expenses. The firm’s expenses have been going up yearly. The increase in the organization’s non-interest outlay and operative outlay have weakened its management of costs (Morgan, 48). The current firm’s non-interest outlay established is around $17942 of the whole net incomes.
The firm’s dependency rate in particular markets is very high. JPMC, particularly the United States, depends highly on Northern America for a significant share of its incomes, actually more than 65% (Zeissler and Andrew, 104). The over-dependence increases the company’s susceptibility to a slowdown of the economy and business in that market. Additionally, the company is affected by market fluctuations. JP Morgan Chase is vulnerable to changing markets and is an issue to a susceptibility of the markets and hence is wobbly in such situations.
Lastly, the company does not have great forecasting for the demand of its products. This leads to an increased rate of missed chances as opposed to its competitors (Zeissler and Andrew, 111). Thus, it keeps a long day list compared to that of the other companies in the industry who can forecast demand correctly.
Opportunities in The SWOT Analysis of JP Morgan Chase
JPMC is surrounded by numerous opportunities. First, the outlook for asset management is encouraging (Hearit, 238). The business of asset management is developing limits worldwide and is set to get to more than 102 trillion dollars by 2023, with a compound annual growth rate of around 6%. JP Morgan Chase is fitly furnished to remain profited by the development in the asset management business.
Growth in the credit card market creates another opportunity for JPMC. In the United States, the circulation of credit cards has been enhancing (Zeissler and Andrew, 112). The growth has also been witnessed globally. Additionally, chase cards have been utilized efficiently. Therefore, JPMC stands a better chance of profiting from credit card circulation growth.
JP Morgan Chase has the opportunity of expanding geographically. The company should purpose on extending its geographic reach to get to all demerging and significant markets (Hearit, 241). This will help the firm to boost its market portion.
To add on, lesser inflation makes the market steadier, allowing JP Morgan Chase clients to get a loan at a lesser interest rate. The government green drive also opens a chance for obtaining JPMC products by the nations and federal government workers, meaning the novel tax rules are a significant effect on the operation (Hearit, 254). Thus, this will help to create novel opportunities for highly lucrative abilities for current members where JPMC is one.
Besides, the advancement in technology is important for it provides chances for JPMC to execute a distinguished pricing plan in new markets. In return, the company will be in a position to reach its everyday clients with excellent service and also attract new clients (Hearit, 259). Last but not least is that the novel trends in customer behavior will create a new market for the JP Morgan Chase providing a significant opportunity for the company to construct new income streams.
Threats in The SWOT Analysis of JP Morgan Chase
Every company is faced with several threats in its day to day operations. JPMC is not of exception, for it also facing several threats in the market. One, the challenges in the regulations is an adverse threat to the company. All financial institutions globally undergo the problem of altering rules (Morgan, 49). Consequently, the changing of regulations raises the companies’ costs of abidance and thus impacting the operating boundaries negatively. Changing regulation is a great threat to JPMC.
Just like any other financial institution, JP Morgan Chase is threatened by the financial crisis. A little decline and monetary crisis impact financial institutions (Zeissler and Andrew, 112). Therefore, any form of monetary disaster will affect JPMC negatively.
Data privacy and cybersecurity risks bring pressure to all companies. This is because it is significant to ensure that there is data privacy; thus, an increase in regulatory pressure on firms to ensure there are no data leakages (Zeissler and Andrew, 113). The leakages can spoil the companies’ trademark and cause them trouble with the regulatory authorities. Therefore, JPMC has to go the extra mile to ensure there is data protection for the bank and clients. The firm has spent a lot of money on handling cyber-attacks.
The competition increase in the finance industry sector from technology giants poses another big threat to JPMC. This is because numerous technology companies are maximizing their know-how in machine knowledge and artificial intellect that they have developed already and utilizing it to infringe on the territory of outdated financial services companies that have started using the latest technology recently (Morgan, 50). The growth in wealth management businesses of the technology companies creates a great threat to companies like JPMC that have remained strongholds of the industries for a long time.
Works Cited
Gay, Gale Horton. “JPMorgan Chase: a technology company and a bank.” Women of Color Magazine 17.1 (2018): 18-21.
Hearit, Lauren Berkshire. “JPMorgan Chase, Bank of America, Wells Fargo, and the financial crisis of 2008.” International Journal of Business Communication 55.2 (2018): 237-260.
Morgan, J. P. “JPMorgan Chase & Co.” (2019).
Zeissler, Arwin G., and Andrew Metrick. “JPMorgan Chase London Whale E: Supervisory Oversight.” Journal of Financial Crises 1.2 (2019): 103-115.