American Express Is a Global, Diversified Financial Essay

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American Express is a global, diversified financial services company headquartered in New York. The company is over 150 years old, founded in 1850. It is best known for its credit card, charge card, and travelers check business, but has numerous ancillary operations that are profit centers. Analysis's rank American Express as the fourteenth most valuable brand in the world, estimating the worth of the brand at over $21 billion dollars (AXP, 2009). Despite this length of time in the marketplace and service level, American Express remains vulnerable to the machinations of the economy, and thus any additional product lines must be carefully considered.

Problem Statement- American Express using Quality Management to Excel in a Highly-Competitive Niche Market. Business Executive Exclusive Perks Card from U.S. Express (The BEEP Card) -- Do we launch with current levels of Business commitment in the field?

Organizational Background - American Express is a diversified global financal services company that was founded just prior to the American Civil War. It is best known for its business line of charge cards, traveler's checks, and in fact, holds about 25% of the total credit card transactions in United States, largely because of its perks and programs focusing on American business (Chenault, 2009). American Express does not really sell "anything tangible." Yes, they have some merchandise, but their primary focus for the consumer is to get as many American Express cards into the hands of qualified customers as possible. Money is generated through the fees charged to retailers and credit card clearing houses. But, American Express is essentially branded as a service-oriented business -- topnotch service that customers receive in their interaction with all U.S. Express staff (Bihlmier, 2002).

One of the reasons American Express has been so successful to date, despite the ups and downs of the economy, is its focus on customer experience and branding that experience into something that feels tangible, even though it is not tangible. They have done this through enhancement of the customer experience from initial contact through final payment, tagging celebrities for endorsements, and branding the experience (McCarthy, 2005; Davis, 2010; americanexpress.com).

Thus, for many businessmen, American Express is more of an experience -- they can call the company 24/7, 365 days per year in an emergency, have funds delivered or charges authorized by phone; they can received discounts on hotels, car rentals, meals, and even special events.

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Being an American Express member "has its perks." And, with the new BEEP card, specifically designed for that upper echelon of corporate executive, the experience offered will be even more customized and special.

Literature Review - Even with billions in global assets, however, American Express's business model is tied to the economic pulse of the business world. As one of the top rated "charge" cards for business and corporate use, the fiscal crises of the last few years has negatively impacted the company, and in November 2008, American Express won Federal Reserve System approval to covert its operation to a bank holding company, which made it eligible for government subsidies under the Troubled Assets Relief Program, which, at that time consisted of over $127 billion (Lanman, 2008). This troubling trend was serious enough for the Fed to waive its typical 30-day waiting period, and was the result in credit-card holders failure to repay loans at almost twice the rate of 2007. Indeed, one of the major strategic weaknesses of American Express is its tie to the economic health of the global financial markets -- American Express following the trends by posting several quarter profit declines even with some segments showing upturns. "Given the continued volatility in the financial markets, we want to be best positioned to take advantage of the various programs the federal government has introduced. We will [also] continue to build a larger deposit base to broaden our funding sources" (CEO Kenneth Chenault, Ibid).

American Express is a large enough company, with core values in banking, financial services, travel, and corporate/personal credit and charge cards. They have a Strategic Planning Group that operates consulting services to management of all its business units, and also services as a conduit for executive level recruiting. ("American Express Strategic Planning Group").

The business model for American Express consists of several major sections, (See Figure 1) with the top grossing centers: 1) Discount Revenue from card transactions (53%); 2) Interest from card….....

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