JP Morgan Company History and Marketing Strategy Analysis

Executive Summary

JP Morgan Chase & Co. is one of the largest banks in the US and globally, it has over $2.6 trillion in assets, and it is present in over 100 markets, employing over 250,000 people globally. The merge of JP Morgan and Chase took place in the year 2000 and was known the biggest merger in the banking history, the company together renamed to JP Morgan Chase & Co. Today JP Morgan Chase & Co. has over $2.7 trillion in assets and its Hedge Fund is the second largest in the US. JP Morgan Chase & Co. is American banking and financial service center who is responsible in providing Commercial banking, Investment banking, and wealth management services to companies and individual. The company’s headquarter is in New York, New York located in a high rise commercial office building in center of Manhattan and clients are investors, hedge funds, corporations, governments and affluent individuals from all over the world. JP Morgan Asset and Wealth management segment is incorporated with investment and wealth management.

JP Morgan Chase and Co. is extremely popular in its Community and consumer banking, which mainly offers services through local branches, ATM, via telephone services and online through the app. It mainly provide services such as mortgage loans, auto loans, credit cards, cash deposits, offering cash management and small loans to small businesses, also student loans. JP Morgan Chase has a high brand name due to its customer relation and because of its establishment in the business for over 200 years. The stock trend in the past 5 years shows that JPM has been doing very well, we can notice that the stock prices has gone up imminently compare to GS. We can notice the JP Morgan Chase & Co. has generated more revenue and higher profit in recent years. This trend can be visually shown on the stock chart as we have seen it going up. On April 17th, 2019 it was reported by New York times that JP Morgan Chase had switched around its to management posts, creating opportunities for two women now to be a candidate for the next CEO of the Company.

Company History

JP Morgan Chase & Co. is one of the largest banks in the US and globally, it has over $2.6 trillion in assets, and it is present in over 100 markets, employing over 250,000 people globally.

It dates over 200 years back when a man name J.Pierpoint Morgan was born in 1836 in the city of Connecticut, his father was a successful business man who became partner in a banking firm in London. JP Morgan attended university in Germany, after completing his studies he moved to the US and started working as an accounting clerk his father’s company. He started showing his business skills where he was using company’s fund to purchase a large amount of coffee directly from a ship captain and selling it merchants at a profit. He was selling rifles to union army for $22 where he was making a profit of $18 in each rifle sold. During late 1800s Morgan partner with various business men, where he finance the United States steel corporation, arranged the merger that form General electric, and also was involved in the American railroads. Morgan bailed out the US economy in 2 occasions.

JP Morgan renamed its company after his business partner passed away to JP Morgan & Co, where its primary focus was banking. JP Morgan passed away in 1913, but his company remains to operate without him, in 1914 they built their first headquarters at Wall St. During World War 1 JP Morgan was sole underwriter of bonds to Great Britain and France, which is approximately worth of $35 Billion in today’s money. JP Morgan in 1930s opened up his first investment banking operation naming it Morgan Stanley. JP Morgan continued its commercial banking, and in 1980s it started to focus on investment banking. While JP Morgan was developing its business over the last 200 years, so was Chase, it was founded in 1877 named after the US treasury secretary Salmon P Chase.

In 1930 they bought The Equitable Trust Company of New York, and for some time Chase was the biggest bank in the world. In 1955 Chase National bank merged with Manhattan Company, a company that specialized in clean water and had been around since the late 1700s. In 1958 Chase Manhattan bank was the first bank to issue credit cards; initially it issued credit cards could have been used around 6000 local stores. Its logo was designed by Chermayeff & Geismar, was an abstract art based on a design of primitive water pipes constructed by its Manhantan company in its early dates. The company still uses its old logo currently.

The Chase Manhattan bank merged with Chemical Banking Corporation in 1996, Chemical Banking Corporation was the first bank introducing ATM machines in the US. The merge of JP Morgan and Chase took place in the year 2000 and was known the biggest merger in the banking history, the company together renamed to JP Morgan Chase & Co. During the financial crisis in 2008, JP Morgan Chase & Co. took over troubled company Washington Mutual and Bear Sterns. Today JP Morgan Chase & Co. has over $2.7 trillion in assets and its Hedge Fund is the second largest in the US.

Company Overview

JP Morgan Chase & Co. is American banking and financial service center who is responsible in providing Commercial banking, Investment banking, and wealth management services to companies and individual. So many might ask how JP Morgan makes money. Unlike any other business it’s not as straightforward, JP Morgan’s commercial banking is solely responsible issuing loans and making profit on yields on those loans, it also raises revenue on cost of deposits. It has been reported that the financial service provider generated about $14 billion in the last quarter in commercial banking.

Wealth management is another way it makes money, this model of the business is pretty straightforward, as the company collects advisory fees and commissions on the assets it manages, for examples offering and managing mutual funds, brokerage accounts and etc. The company has $22 trillion in assets under control, and it is reported that its unit raised revenue of $ 3.5 billion in the last quarter.

Investment banking is the last way it raises revenue, thus the most complicated out of all. The sole purpose is to create a market for its clients by buying and selling stocks and bonds. It also advises companies on mergers and acquisition, in addition assists companies to accumulate capitals by underwriting bonds and stocks. It is known for the dominance in its investment banking sector, where the company is reported to make $5.5 billion in in fees, making it most profitable in its industry.

The company’s headquarter is in New York, New York located in a high rise commercial office building in center of Manhattan and clients are investors, hedge funds, corporations, governments and affluent individuals from all over the world.

Key Product Line and Competitors

JP Morgan Chase and Co. is extremely popular in its Community and consumer banking, which mainly offers services through local branches, ATM, via telephone services and online through the app. It mainly provide services such as mortgage loans, auto loans, credit cards, cash deposits, offering cash management and small loans to small businesses, also student loans. Community and Consumer banking is widely used by most Americans as due its attractive loan deals. JP Morgan Chase’s credit is the most used credit in the US. JP Morgan faces competition from bank such as Wells fargo, Bank of America, CITI group.

JP Morgan Chase’s private banking client is another product which is offered to individuals to maintain a certain balance in their savings and checking accounts. While Wells Fargo has a similar program called The Private bank, requires individuals to have deposit at least $1 million whereas Chase only demands $250,000 although providing similar perks. These incentives include mortgage perks, high yield on certain account deposit and better privatized services.

JP Morgan Asset and Wealth management segment is incorporated with investment and wealth management. It offers services to high net worth individuals, institutions, retail investors around the globe. It provides investment management and solution to broad range of customers in need and money market funds. For its wealth management clients, it assists in providing retirement and products and services, banking services and brokerage, consisting mainly in loan mortgages, deposits and trusts and estates.

Marketing Analysis

JP Morgan Chase has a high brand name due to its customer relation and because of its establishment in the business for over 200 years. JP Morgan chase client relation is their number one priority when it comes to marketing as the institution tries the best to help the client’s financial needs. It also has a program created called the ‘Chase at work’ in which employees makes regular visits to its clients to improve its relationship. Clients are also rewarded by the Chase for providing referrals to other customers. The company has over 5300 branches and 15,500 ATMs to provide convenience to its clients. The company’s websites and apps also inform customers with services and offers as it would in any local branch. JP Morgan Chase highly train their employees to be knowledgeable and skilled therefore creating a numerous loyal clients. JP Morgan Chase & Co. has robust presence on social media platforms such as Instagram, Facebook, and Twitter. They also publish blogs and articles which make them a highly informative company.

Marketing Research

After conducting a survey through the assistance of the website “surveymonkey.com” I was able get few results. I had initially asked 6 questions, which include the following-

1. How long have you been a customer of JP Morgan?
2. Overall, how satisfied are you with JP Morgan?
3. How well does our service meet your needs?
4. How would you rate the quality of our products?
5. How would you rate the value for money of our products?
6. How responsive have we been to your questions or concerns?

After analyzing the results I found out the company should have been conducted over young professionals, middle age individual or senior citizen. As my responses mainly were given by students, they have not had the opportunity to actually experience their product well enough due to not having much income.

Financial Information

Yahoo Finance

The above stock trend is a comparison of 3 major financial service providers in the US which are MER (Merrill Lynch), GS (Goldman Sachs), and JPM (JP Morgan Chase).

The stock trend in the past 5 years shows that JPM has been doing very well, we can notice that the stock prices has gone up imminently compare to GS. For a brief period of time JPM stocks were more valuable than GS. The strong growth in the stock prices is evident that the company has enjoyed great success.

Income Statement Annual (Yahoo Finance)

We can notice the JP Morgan Chase & Co. has generated more revenue and higher profit in recent years. This trend can be visually shown on the stock chart as we have seen it going up.

Recent Events

On April 17th, 2019 it was reported by New York times that JP Morgan Chase had switched around its to management posts, creating opportunities for two women now to be a candidate for the next CEO of the Company. JP Morgan announced that Marianne Lake, the former Chief Financial officer would become the new Chief Officer of consumer lending, a vital role in the banking division. It has been reported that Ms. Lake’s replacement would be another female candidate named Jennifer Piepszek. These two shuffles on the management open up opportunity for a female to be eventually succeed the long term CEO Jamie Dimon.

On July 17th, 2019 it is reported on New York times that the tax cut has helped JP Morgan Chase earn billions. JP Morgan tax reduction from 22% from 30% has produced remarkable performance on its quarterly report. It is said to have earned more $9.7 billion for the quarter, a 16% increase in compare to its last year’s quarter. Credit cards have flourished, and it also reported that the company will be buying back shares in the next years.

Strategic Recommendations

JP Morgan Chase & Co. being very well reputed over the years and have maintained a strong client relationship, growth in performance and creating more employment opportunities. However, their minimum wage has been still relatively low compare to other banks. Bank of America has recently announced that it will increase it minimum wage to $20 an hour, which will create discomfort among Chase’s employees who are earning only the minimum wage. Chase being the biggest bank in the US should offer incentives that will not only please their clients also the employees. Credit card fraudulent has been another issue across the globe, Chase customers unfortunately have been victims of such crime, strategic development should be improved in order to reduce such activity. JP Morgan Chase should also enhance their presence in the auto loan industry in the US.

Out of the above three strategic recommendation, increasing minimum wage to level its competitors is the most important one. Chase earning its reputation in providing the best client service would have not been possible without its hard working employees. Matching or allowing a higher incentive will make the minimum wage earners feel more important. As a consequence more and more long term employees could be leaving to a different bank. Chase would require additional time to train their new employees which will create productivity loss briefly.