Using Porter's Five Forces Model on JPMorgan Chase. We can see that they have a high threat of their substitutes industry because of the nonindustry competition being able to lend out money. Loans are a key driver in the banking industry because that is how they are able to generate their profits through interest and investments. Anyone that can lend out money to people that need to borrow is taking away business from the banks. However, new entrants have a pose a weak threat to JPMorgan Chase as well as the entire banking industry. The reason is because of regulations and approves that is need from the Federal Reserve new entrants have a tough time join the industry. Another obstacle that new entrants will have is the enormous amount of capital needed. As well as the time required to build a trust with a particular brand. The rivalry that JPMorgan Chase has is with the two other biggest US banks, Wells Fargo and Bank of America. They also have to deal with multinational banking firms, such as HSBC and Barclays. Competition with rivals is intense because they must continue to draw in customers. They need to be more innovative because of the low switching cost that consumers face banks need …show more content…
Their two suppliers are the depositors and the employees. The depositors who are primary resource of capital are not a threat to JPMorgan unless they are either major corporate or they are a High Net Worth Individual. Individual depositors do not have any bargaining power because their deposits do not have a massive effect on the bank. Employees, which supply the labor end of banks are also not a threat to banks. The last of the five forces model is bargaining power of customers. The main group of customers is the depositors. They pose no threat to the banks because they have almost no say in how the company works. Unless customers begin to aggregate, by not using a certain bank, then they do not pose a