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American Express American Express Student: Niculescu Dana BA, YEAR 3, 8812 SHORT HISTORY American Express Company, also known as AMEX, is an American multinational financial services corporation headquartered in New York City. Founded in 1850, it is one of the 30 components of the Dow Jones Industrial Average. The company is best known for its credit card, charge card, and traveler‘s cheque businesse. Amex cards account for approximately 24% of the total dollar volume of credit card transactions in the US. It was founded as a joint stock corporation by the merger of the Henry Wells express companies owned by: Henry Wells (Wells & Company) William Fargo William Fargo (Livingston, Fargo & Company) John Warren Butterfield (Wells, Butterfield & Company). John Warren MAIN COMPETITORS Visa operates the world's largest consumer payment system and boasts more than 2 billion credit and other payment cards in circulation As part of its business, the company licenses the Visa name to member institutions, which issue and market their own Visa products and participate in the VisaNet payment system that provides authorization, processing, and settlement services The company also offers debit cards, Internet payment systems, value-storing smart cards, and traveler's checks. Visa's network connects thousands of financial institutions worldwide. Serving approximately 22,000 member financial institutions worldwide, MasterCard is the #2 payment system in the US. It markets the MasterCard (credit, debit, and prepaid cards) and Maestro (debit and prepaid cards, mainly in Europe) brands, provides a transaction authorization network, establishes guidelines for use, and collects fees from members The company provides its services in more than 210 countries and territories, and its cards are accepted at more than 35 million locations around the globe. Also operates the Cirrus ATM network. Best known for issuing Discover-brand credit cards, used by more than 25 million members. The company's cards, which include several levels of business and consumer accounts, repay cardholders a percentage of the purchase price each time they use their cards. Licenses Diners Club credit cards, which are accepted in more than 185 countries. Also offers direct banking services, makes student and personal loans and runs the PULSE Network ATM system. MAIN PRODUCTS AND SERVICES Card products Consumer cards Small business services (also known as American Express OPEN) Commercial cards and services Non-card products Traveler's Cheques Financial Advisors Travel services: booking, insurance, etc SWOT ANALYSIS STRENGHTS Customer satisfaction - J.D. Power and Associates award for customer satisfaction (2012); capability to provide quality services; Card memebership – 10% of the market share; customers with strong card rating and high income; Financial strenght – the company grew loans in 2012 by 4 pp and increased the Earnings Per Share from 4.04$ to 4.44$ Strong brand name Loyalty of customers and loyalty programs (membership rewards program) Global coverage Standardization of operations Product innovation(ex: Blue Bird card for youngsters) Ability to adopt and apply new marketing strategies and also technologies WEAKNESSES Low market share in card business Consumer banking segment not strong enough Redundant operations worldwide with no optimization of resources (lack of harmonization) Failure to comply with industry regulations(the failure to institute marketing, card member management, and consumer protection processes, policies and procedures that are in full compliance with regulations) OPPORTUNITIES Growing market share in e-payment services Expanding the number of small-business merchants offering Amex as a payment option Expanding product offerings to those not traditionally in the target market for the firm (Bluebird card) Expanding Loyalty Partner Program worldwide(marketing support for local merchants) Lawsuit against Visa and Master Card can stop their monopolistic practices and provide market share to American Express Opening up their network for use by financial institutions yields high returns Reduction of trade barriers and government regulations THREATS Instability in the economic and political environment worldwide Rapid changes in Financial Industry Intense competition Thank you for your attention! .
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