Essay - American Express Case Study Part I: Situation Analysis Analysis of...


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American Express Case Study

PART I: SITUATION ANALYSIS

Analysis of the Firm

American ***** (NYSE:AXP) is one ***** the world's leading providers of premium travel-related services and payment processing system support ***** globally. American Express (Amex) has grown steadily through a series of mergers, acquisitions and later divestures to focus entirely on their premium card and payment processes services (Taube, Gargeya, 2007). Amex concentrates today on a ***** of financial products and services to individuals, small businesses, and large corporati*****s including the Fortune 500, ***** higher education institutions globally. The company operates on a global scale, yet ***** majority of its revenue is generated in the U.S. For an analysis ***** ***** Express Revenues and Earnings before Interest and Taxes, see Table 1: American Express Geographic Analysis. In an effort ***** bolster foreign revenue, Amex reorganized to have operating segments re-aligned to a global consumer and global business-*****-business structure (Taube, Gargeya, *****). The company also completed this re-organization for corporate accounts and ancillary businesses as well. As part of ***** re-organization, Amex placed its U.S. Card Services unit (USCS) ***** it's *****ternational ***** Services (ICS) within the global consumer group with the intent of creating a more uniformly focused culture on customer service and recovery in this sector (Giglio, Michalcova Yates, 2007). Of all services divisions ***** the company, USCS is the most well-known as it ***** on ***** issuance of cards to consumers and the offer*****g of services to ***** businesses in the U.S. through 2007, and since the reorganization, glob*****y (Taube, Gargeya, 2007). As part ***** the re-organization the company has also integrated in ***** Travel Related Services (TRS) ***** w*****h its U.S. banking subsidiaries ***** include the icon of *****ir br*****, their consumer charge cards. From the classic green ***** Express personal card, to ***** American ***** Gold, Platinum and Centurion Card, to the revolving ***** including Blue with is the processor of Optima, this division manages ***** accounts. What is remarkable ***** that ***** average spending $8,360 per Amex ***** is four times that of competi*****r Visa's average ***** of $2,470 ***** card and MasterCard's $1,960 per card as well. This point made in the case quantifies how powerful the Amex ********** is ***** ***** upper income segments ***** the American credit ***** market, and also shows significant potential for global growth ***** affluent *****. To continually pursue global growth the company contracted in 2007 with Harrods to offer a customized American Express card ***** that store as well (Taube, *****, 2007). Amex realized that in addition to these customized cards, the need to *****cre*****e the number of redemption services was also critical, and as a result *****y added 1,400 redemption partners globally since the reorganization (*****, Gargeya, *****). This network is comprised of 80 different ***** in each country with only a *****th ***** them in the travel industry (McClellan, 2007). One of the strategic objectives as defined in the c*****e study ***** apparent from subsequent research is the development of the Global Commercial Services

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