JPMorgan Chase

The Company JPMorgan Chase & Co. was founded in 1968 and offers financial services to its customers. It is a lending and financial services company. It offers its customers private equity, asset management, financial transaction processing, commercial banking, financial services for consumers and small businesses, and investment banking.  The bank provides its products in five segments namely the Corporate and Private Segment, the Asset Management Segment, the Commercial Banking Segment, the Corporate and Investment Bank segment and the Consumer and Community Banking Segment. The company also operates through several subsidiaries namely, JPMorgan Chase Bank, JPMorgan Chase Bank National Association, and Chase Bank USA National Association (Reuters, 2015).

The principles of JPMorgan Chase

JPMorgan Chase has been showing gradual growth in the past. In the last quarter of 2014, the company made a profit before tax of $4.9 billion. The growth of the company has been inspired by a set of principles which are publicly acknowledged among company employees. According to JPMorgan Chase & Co. (n.d.), these principles are generated with the intention of helping the company achieve its goal of leading the financial Services sector in the world. These principles also serve to give the company and its leadership a roadmap on ethical decision making.

First, the company strives to offer the best services in the sector worldwide. To do this the company has developed a franchise that develops high quality products in every department it operates. The company also develops products that seek to meet the needs of the clients in every way. The company has also been intent to provide its consumers the best products at friendly rates. To develop these products, the company uses a method dubbed “Innovative, test and learn” (JPMorgan Chase and Co. n.d.). This is a method where all ideas thought to be innovative are first offered to consumers before either being accepted permanently or removed. This has served to improve the bank’s profile and granted the company a competitive advantage. The company is also intent to provide consumers with brands that are concerned with customer satisfaction.

The company executes its services and strategies superbly. The company has a devotion to serving its clientele with a strong financial discipline and to guide them to prepare for diverse situations. The company has also satisfactorily existed with a stable balance sheet over time. Through this principle, the company has successfully won the trust of its consumers. JPMorgan develops and maintains products that are of high quality at all times. By doing this, the company has been able to win a big market share in the long run. The company has also striven to reduce bureaucracy and waste and to offer its shareholders with a reliable investment that it viable and capable of reaping high rewards in terms of dividends. The governance system of the company has always been strong to offer quality leadership and decisions for the company.

The company has developed a winning culture in all its branches and departments. The company has a culture of integrity in allits operations. JPMorgan strives to always ensure that the company does not get into trouble as a consequence of dishonesty and lack of integrity. Employees are treated with respect and integrity at all times to maintain a loyal customer base. The company develops and retains its own managers so as to ensure that it has a good leadership system that understands the operations and culture of the organization. Through its culture, the company maintains a spirit of honesty between employees, shareholders and consumers. With this understanding, most employees are always devoted to creating understanding and maintaining relations with the organization. The company also always strives to give the right incentives to the right individuals. It would be cheating to give a bigger incentive to an individual who did not deserve it. The company also nurtures an environment of inclusiveness and respect among all the stakeholders of the company. By doing this, the company has drawn many customers to its fold. Finally, the company gives back to the society through various initiatives that are developed at community level.

Business Strategy

The growth of JPMorgan has mainly been seen in the past 15 years. While the company has been in operation for over 200 years, it had not been a performer until the early 2000s. In 2000, JPMorgan and Co. merged with Chase Manhattan Corporation. In 2004, the merger acquired Bank One a Chicago based bank. Again, during the period of the financial crisis, the company acquired Washington Mutual and Bear Stearns. From an initial 75,000, the company swelled to a total of over 225,000 employees (Wherry, 2011).

These acquisitions were important for the company in a big way. First, the initial merger provided the company with more resources and capital to enable it to acquire other companies in the future. Second, the acquisitions of the organization gave it access to markets it was not initially serving. Through the acquisition of Bank One, the bank got access to the smaller bank’s fixed income offerings.

The company has both gained and lost from its structure. After the acquisition of Bank One, the company elected Jamie Dixom as CEO. It is through the leadership of Dixom that the bank had seen the tremendous growth. Under his leadership, the profits of the company had more than doubled by the end of 2011. The fortified balance sheet of the company was also vital for the company’s survival during the financial crisis. The Bank’s acquisition of the Bear Stearns and WaMu was especially at a time when the global financial system was nearing its collapse. Another leader who has brought her strengths into the company is Mary Calahan. The leadership of Calahan has been especially highly regarded due to her high level of experience.

The management of an organization is often reliant on both reliant on both the internal and external environments. The performance of the parent company is measured by whether or not it is able to meet its Wall Street Estimates. Every division of an organization must be devoted to its role to the entire organization for the organization to perform. JPMorgan does not however strain its employees with the need to meet is goals. Instead, each individual is committed to discipline that would be effective in creating a good customer base in the long run.

The company has put most of its emphasis in product development and team work. Since 2005, the company developed over 59 funds products. Those funds have mainly been generated in the developing countries such as China, India and Latin America. One of these funds has been the innovative 130/30 product which is inflation managed and offers an absolute return strategy to its customers (Wherry, 2011). While the company has received credit for its innovative products, the products are of questionable use to most retail clients. The majority of investors are unable to make good use of the funds to make a reasonable return on the dollar. While the majority of the company’s funds have decent 3-year returns, a few of the newer products perform poorly in their categories. To get a bigger clientele, JPMorgan provides its consumers with education about the products. The company has many client portfolio managers with a ratio of 1:1 with the funds. Other companies competing with JPMorgan will have one client portfolio manager for every 4 to 5 products.

Through the products, the bank has been able to guarantee low risk on client funds. Due to the low risk, despite low returns, the bank has been able to get a good customer base in most of its markets. The strategy that the company uses is far better compared to the form that has a survival tendency. In the future, the funds have a potential for success better than they are doing.

In conclusion, the numerous products offered by JPMorgan have been vital for the growth of the company. Another thing that has been important is the set of principles used by the company. The company has only recently grown after having strategized in its acquisitions and mergers prior to the great recession. Recently, the company is exploring the funds market by developing low risk funds and placing itself strategically. This way, it has been able to obtain and train a large number of employees.

References

JPMorgan Chase & Co. (n.d.). Our Business principles

Reuters,. (2015). JPMorgan Chase & Co (JPM.N) Company Profile | Reuters.com. Retrieved 17 February 2015, from http://www.reuters.com/finance/stocks/companyProfile?symbol=JPM.N

Wherry, R. (2011). Why JPMorgan May Have The Best Strategy On Wall Street. Business Insider. Retrieved 17 February 2015, from http://www.businessinsider.com/an-inside-look-at-jp-morgans-long-held-strategy-2011-2