Introduction
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American Express is a financial services company with a business model built around issuing credit cards and providing travel-related services in addition to processing payments. American Express has built its business model on the strength of its brand, which allows it to charge higher fees than other credit card companies.
What is the American Express business model?
American Express is a financial services and credit card company. It provides its clients with wealth management, travel services, merchant chargeback protection, and rewards for their spending on the American Express network.
American Express is also a technology company. They have been in the payments business since before credit cards were invented (in fact, they invented one of the first credit cards). They have continued to innovate around payments over time with technologies like PayPass that let users tap their card to make purchases without having to swipe or insert it into an ATM machine; or Serve which lets you deposit checks right from your phone; or Apple Pay which lets you pay using your iPhone at checkout lanes at hundreds of thousands of stores around the world. All these innovations are part of what makes American Express so valuable as a brand: they know how pay works better than anyone else!
American Express is also known as “the bank that never sleeps,” because they’re always open – 24 hours per day every day! This means if something goes wrong during business hours when everyone else is sleeping (like say someone loses their wallet), then no problem – just call up Amex anytime between 6am-3am any day except Sunday (when offices are closed) because we’ll answer any questions about our products 24 hours per day every weekday even though most banks aren’t even open then anyway so don’t worry about calling us then either but if anything happens during those hours anyway just give us a call anyway because we’d rather help than not 🙂
Primary products and services offered by American Express
- Credit cards: American Express is one of the leading providers of credit cards. The company offers a variety of cards to help you manage your finances, from travel rewards cards to business charge cards.
- Travel services: Traveling with American Express is easy and convenient thanks to their travel services. You can book your flight or hotel through the company’s website or app, which will also keep track of all your trip details and itinerary for you. They even offer concierge services for help planning trips and setting up transportation once you arrive at destination!
- Loyalty programs: American Express Gold Rewards Card members can earn points towards free flights with the airline Delta SkyMiles on every purchase they make with this card (up to 10,000 per year). Plus there are other ways like shopping online where you can earn more miles faster by joining “Shop Your Way” loyalty program then earning bonus points when buying items at Sears/Kmart stores that are part of this network.
How does American Express create value?
American Express uses its network to create value. The company has a large customer base, merchant network, strong brand and reputation, distribution network, and excellent customer service.
How does American Express capture value?
American Express’ customer base and its brand are key differentiators for the company. The company has built a reputation as a premium card provider that caters to high-end customers, and this positioning enables it to charge higher fees than its competitors. In addition, American Express’ balance sheet has remained strong even during times of financial turmoil, which has allowed the company to take advantage of opportunities in other industries (such as lending).
What are the main challenges for the American Express business model?
American Express faces a lot of competition from other companies in the credit card industry, payment providers, financial services companies and financial institutions. As you can see in this chart below:
- American Express business model is challenged by:
- Competition from other credit card companies like Visa and Mastercard who also offer their own rewards programs.
- Competition from other payment providers like PayPal and Square that offer similar services as American Express but at lower costs to merchants (i.e., no transaction fees).
- Competition from other financial services companies like Fidelity Investments and Vanguard Group which provide investment products that compete with the brokerage services offered by Amex’s Wealth Management division.
- Competition from other financial institutions such as Citigroup & JPMorgan Chase who offer similar loans & mortgages to those available through Amex’s Consumer Lending division; however these banks have more branches than Amex so they may have better access to low-income customers & younger generations who don’t have bank accounts yet but could still use our cards/debit cards instead of cash where ever they go!
The future of the American Express business model
As you can see, American Express is a company with multiple lines of business. And while it has had its ups and downs over the years, it remains one of the most successful companies in history. If you are interested in learning more about how American Express operates as a business model and how its management team works to deliver results, check out this whitepaper on “What Makes A Great Company?” The paper offers an in-depth look at how leaders at some of America’s biggest companies are leading their organizations through times of rapid change.
Conclusion
The American Express business model has allowed AMEX to create a very successful company. They have created a network of card members and merchants, which allows them to earn money on both sides of that network. In addition, they offer various services that help make the lives of their customers easier. This is a great example of how building up your customer base can lead to additional revenue streams outside of the main product or service you provide them with initially. As long as there are people who need financial support in some way (and this will never go away), there will always be an opportunity for American Express’s business model to thrive!
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