Thesis on "American Express"
Thesis 5 pages (1417 words) Sources: 0
[EXCERPT] . . . .
American ExpressThe first surprise in this company's history is that they did not start out in 1850 as a financial company, but rather as a "pony express" type business that delivered all the packages, parcels, gold, etc. that the early U.S. Post Office couldn't -- or wouldn't. They also delivered to destinations that the post office didn't reach. American Express gained their reputation by delivering their cargo, whether on horseback or stagecoach, reliably and, for the most part, on time.
Banks happened to be their biggest customers -- because it was more profitable than hauling the bigger freight. They carried money, gold, financial instruments of all kinds and other small parcels to financial institutions. And the banks appreciated the high quality of performance they received from American Express, and paid them accordingly.
Around 1890, the company decided that the banking and financial business could be profitable for them too, so they began issuing money orders. In 1891, the famous American Express Traveler's Check was introduced. Because of its previous reputation, this money order business grew very quickly into a worldwide opportunity for the company. They had offices in England, Germany, Belgium, Germany and France.
The second surprise fact about this company is how they started into the travel services business.
It seems, when WWI broke out in Europe in 1914, more than 150,000 U.S. citizens were left stranded without a way to get home because foreign banks would no longer honor their American letters of credit. American Express did, and funded the safe passage of these Americans to their home c
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However, the late 1920s and 1930s were times of great struggles for the company, as well as the era of the Great Depression. First, Chase Bank, without any publicity, bought up 95% of American Express' stock and made an offer for the company. But the remainder of the American Express stockholders would not sell to Chase. Then, in 1933, Congress passed an act prohibiting banks from participating in non-banking services -- and Chase lost its chance.
Then, during WWII, the company's WWI experience paid off, and the U.S. government encouraged GI's in Europe to convert their cash pay into traveler's checks for safety. It probably saved American Express from going under.
During the post WWII boom, the company thrived and grew tremendously. As the economy improved and servicemen came home, travel in the U.S. expanded rapidly, and so did the company's travel business...and a new financial instrument came into being -- something called a credit card. American Express began issuing its first one in 1958. Then it began local currency credit cards in other countries, the Gold card in 1966, and by the late 1970s, both traveler's check and credit card business were extremely profitable.
The late 1970s and 1980s brought about massive buying by the company, which, by now, had decided to become a conglomerate of diversified businesses in order to protect any one market. They acquired several large corporations and financial institutions. However, the strategy didn't pay off as they had expected, and by the late 1980s they were focusing on their core businesses and divesting some of the companies they had purchased.
Then, during the late 1980s and 1990s, disaster struck -- almost. The very center of their business, the American Express credit card began losing market share for two reasons: First, merchants in the U.S. protested their "high" fees for the use of their card. Second, internationally, businesses were trying to persuade customers not to use American Express for the same basic reason. This was in spite of the fact that AmEx introduced a revolving credit card in1987. Even the CEO of AmEx admits that the company almost collapsed during that time period.
However, by 2000, the company was back, having again focused on its core businesses, divesting others, strengthening relationships with business owners, and forming alliances with airlines, banks and retailers around the world.
The disastrous events of 9/11 slowed AmEx and its headquarters operations across the street from ground zero. Several… READ MORE
Quoted Instructions for "American Express" Assignment:
American express: History of this company, Why AMEX succeed in USA, around the world. How AMEX survived the 08/09 economic crisis. would AMEX's strategy work in asia? especially in China?
How to Reference "American Express" Thesis in a Bibliography
“American Express.” A1-TermPaper.com, 2009, https://www.a1-termpaper.com/topics/essay/american-express-first-surprise/9413. Accessed 27 Sep 2024.
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