American Express and the Competition
Hoover’s and Morningstar define MasterCard Inc., Discover Financial Services, Western Union Co, PayPal Holdings Inc., and VISA Inc. as the primary competitors of American Express (AE). It should be pointed out that these companies are not exactly identical in their preferred field of work (take, for example, PayPal and its emphasis on the computer- and mobile-assisted payments). Nowadays, the main areas of AE’s operation include “charge and credit payment card products and travel-related services” (Bloomberg Business par. 1). Given the fact that the competitors listed by the analysts are mostly concerned with the first part of the company’s activities, it is logical to conclude that the most severe competition the company has to face is connected to this part of its business. Also, as it will be described below, in fact, this is the area that the company is most active in.
The competition that AE has had to face throughout its history was reflected, for example, in the 2004 lawsuit that AE won against Visa and MasterCard. The two companies had prevented a big number of banks from working with AE, and, in fact, AE proceeded to sue the two companies (that had already lifted the rules which were proved to break anti-trust laws) for the “historical damages plus future damages from the historical acts” (Kim par. 8).
The competition may be tough, but nowadays the position of the company is very stable and firm: this fact can be attributed in part to the popularity of the brand. According to Fortune’s Most Admired 2015 Companies, AE is ranked number eight. According to Forbes’ Most Valuable Brands, AE is ranked number 22. Morningstar rating of the company is four stars. The company claims to be one of the world’s most trusted brands, and it appears to be plausible (American Express Company par. 5). It is obvious that the consumer’s trust for the company is rather high. It should be also pointed out that the trust must have been won by the company’s strategies, policies and reliability that AE is proud of (American Express Company par. 1, 3, 5, 8-10).
American Express Businesses
Initially, AE was a transport company, but its specialty was changed: at the end of the 19th century the American Express Money Order and the American Express Travelers Cheque were introduced, and the company has kept to these two courses in the majority of cases (“American Express Company” par. 2). However, as AE developed, grew, and acquired new companies, the field of its activities also expanded, and nowadays it includes even publishing (“American Express Company” par. 5). The relatively complete list of AE’s services includes “charge and credit card products; payments and expense management products and services; consumer and business travel services; stored value products, such as traveler’s cheques and other prepaid products; and network services” (Bloomberg Business par. 1).
The traveling offers, for example, include the planning services or car-rental reservations (“American Express Company” par. 5). However, according to Hoover’s even though the company’s Travelers Cheque Group is the largest issues of travelers’ checks in the world, the “bread and butter” of the company is the credit cards business (Hoover’s Inc. par. 1). This suggestion is also supported by the fact that main competitors of the company are concerned with similar fields. In order to thoroughly incorporate the fields of activities within the AE brand, the company might consider paying closer attention to the underrepresented areas. It can be also concluded that the brand does not exactly embrace all the fields of the company’s activities, as the fame of the company is apparently connected to the main one. Therefore, improving the company’s brand and services integrity could be advisable.
American Express Customers
While AE’s target market included affluent consumers at the beginning of its history, as the times changed, variants for lower-income people started to arise. The new strategy allowed the company to increase its size tremendously. For example, nowadays the company operates in more than 130 countries with more than 112.2 million cards in force which would have been impossible with the previous target market policies (American Express Company par. 3). The inclusion of the lower-income customers into the target market appears to be one of the AE’s keys to success.
Apart from that, the switch from affluent-only target market demanded certain changes in the brand image. The company offers personal cards as well as cards for small and bigger businesses, and endeavors to treat their customers with respect and provide all of them with “superior value propositions” (par. 4). Instead of providing only “upscale” service, the company emphasizes its reliability and the respect it pays to every customer. At the same time, AE keeps referring to its card holders as “cardmembers” insisting on creating a community of Members who are valued personally. Therefore, even though the new target market of the company is not offered the same “elite” air as before, the company still does its best to evoke the feeling of belonging in its members (American Express Company par. 10). It can be concluded that the brand image was changed to accommodate the new policies, but the core ideas of customer relations promoted by the company remained the same. In general, the change of the target market strategy that has been carried out by AE appears to be a wise choice.
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