Professional Documents
Culture Documents
American Express
American Express
On
Submitted to
2012-2014
Submitted By
Anand Khadka
Acknowledgement
I would like to express my sincere thanks to Prof. Director, (IIBR) for their support
and co-operation.
I owe a deep sense of gratitude to my project guide, Prof. for his valuable
guidance & encouragement which enabled me to complete this project successfully.
I would also like to sincerely thank all faculty members of MBA, (IIBR) for their
valuable guidelines.
I would also like to thank all the other employees of AMERICAN EXPRESS who
have largely contributed to completion of this project.
Date:
Place: Pune
TABLE OF CONTENTS
Cover Page
Certificates
Acknowledgement
1 Introduction
2 History
3 Company Profile
4 Review of Literature
5 Merger Acquisition & Business Growth
6 Vision, Mision & Values
7 Research Methodology
Bibliography
Annexure
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American Express is the only company with a strong, global presence across the entire payments
chain.
We are the world’s largest card issuer, the premium network for high-spending cardmembers, a
processor of millions of transactions daily, and a partner that provides business-building services
to a worldwide merchant base.
Having this horizontal scale across payments gives us diverse opportunities to grow our business
and drive innovation in the marketplace. It’s also a gateway to a broader array of services that
further differentiate American Express.
Our direct relationships with many millions of consumers, businesses and merchants worldwide
-- combined with our leading-edge marketing, information management and rewards capabilities
-- enable us to offer an array of valuable services that enrich lives, build business success,
encourage financial responsibility, and create communities of people with common interests.
This is what makes American Express a unique, and uniquely powerful, services company.
and for merchants to sell their goods and services. An engine of commerce, American Express
provides innovative payment, travel and expense management solutions for individuals and businesses of all sizes.
Most of all, we help our customers realize their dreams and aspirations through industry-leading benefits, access to
unique experiences, business-building insights, and global customer care. We enable our customers to do more and
achieve more.
History of the company
American Express was started as an express mail business in Buffalo, New York, in 1850. It was
founded as a joint stock corporation by the merger of the express companies owned by Henry
Wells (Wells & Company), William G. Fargo (Livingston, Fargo & Company), and John Warren
Butterfield (Wells, Butterfield & Company, the successor earlier in 1850 of Butterfield, Wasson
& Company). The same founders also started Wells Fargo & Co. in 1852 when Butterfield and
other directors objected to the proposal that American Express extend its operations to
California.
American Express first established its headquarters in a building at the intersection of Jay Street
and Hudson Street in what was later called the Tribeca section of Manhattan. For years it
enjoyed a virtual monopoly on the movement of express shipments (goods, securities, currency,
etc.) throughout New York State. In 1874, American Express moved its headquarters to 65
Broadway in what was becoming the Financial District of Manhattan, a location it was to retain
through two buildings.
At the end of the Wells-Fargo reign in 1914, an aggressive new president, George Chadbourne
Taylor (1868–1923), who had worked his way up through the company over the previous thirty
years, decided to build a new headquarters. The old buildings, dubbed by the New York
Times as "among the ancient landmarks" of lower Broadway, were inadequate for such a rapidly
expanding concern. In March 1914, Renwick, Aspinwall & Tucker filed for the construction of a
32-story concrete-and steel-framed office tower in which all of the company's operations, then in
four separate buildings, were to be consolidated. The building proposal of 1914 was abandoned,
probably due to the war in Europe, but was resurrected two years later in a reduced form, at an
estimated cost of $1 million.
Nationwide expansion
American Express extended its reach nationwide by arranging affiliations with other express
companies (including Wells Fargo – the replacement for the two former companies that merged
to form American Express), railroads, and steamship companies.
Financial services.
In 1882, American Express started its expansion in the area of financial services by launching
a money order business[11] to compete with the United States Post Office's money orders.
Sometime between 1888 and 1890, J. C. Fargo took a trip to Europe and returned frustrated and
infuriated. Despite the fact that he was president of American Express and that he carried with
him traditional letters of credit, he found it difficult to obtain cash anywhere except in major
cities. Fargo went to Marcellus Flemming Berry and asked him to create a better solution than
the traditional letter of credit. Berry introduced the American Express Traveler's Cheque which
was launched in 1891 in denominations of $10, $20, $50, and $100.[15]
Traveler's cheques established American Express as a truly international company. In 1914, at
the outbreak of World War I, American Express offices in Europe were among the few
companies to honor the letters of credit (issued by various banks) held by Americans in Europe,
despite other financial institutions having refused to assist these stranded travelers.
Investment banking
During the 1980s, American Express embarked on an effort to become a financial services
supercompany and made a number of acquisitions to create an investment banking arm. In mid-
1981 it purchased Sanford I. Weill's Shearson Loeb Rhoades, the second largest securities firm
in the United States to form Shearson/American Express.
After the purchase of Shearson, Weill was given the position of president of American Express
in 1983. Weill grew increasingly unhappy with responsibilities within American Express and his
conflicts with American Express' CEO James D. Robinson III. Weill soon realized that he was
not positioned to be named CEO and left in August 1985. In 1984, American Express acquired
the investment banking and trading firm, Lehman Brothers Kuhn Loeb, and added it to the
Shearson family, creating Shearson Lehman/American Express. It was Lehman's CEO and
former traderLewis Glucksman who would next lead Shearson Lehman/American Express.
In 1984 Shearson/American Express purchased the 90-year-old Investors Diversified Services,
bringing with it a fleet of financial advisors and investment products. In 1988, Shearson Lehman
acquired E.F. Hutton & Co., a brokerage firm founded in 1904, this was merged with the
investment banking business and the investment banking arm was renamed Shearson Lehman
Hutton, Inc.[16]
However, when Harvey Golub became CEO of American Express in 1993, American Express
decided to get out of the investment banking business and negotiated the sale of Shearson's retail
brokerage and asset management business to Primerica. The Shearson business was merged with
Primerica's Smith Barney to create Smith Barney Shearson. Ultimately, the Shearson name was
dropped in 1994.[17]
In 1994, American Express spun off of the remaining investment banking and institutional
businesses as Lehman Brothers Holdings Inc which after almost fifteen years of independence
would file for bankruptcy protection in 2008 as part of the Late-2000s financial crisis.
Recent history
Current CEO Ken I. Chenault took over leadership of American Express in 2001 from Harvey
Golub, CEO from 1993 to 2001. Prior to that, the company was headed by James D. Robinson
III from 1977 to 1993.
Cable TV
American Express formed a joint venture with Warner Communications in 1979 called Warner-
Amex Satellite Entertainment, which created MTV, Nickelodeon, and The Movie Channel. The
partnership lasted only until 1984. The properties were sold to Viacom soon after.
Controversy in the UK
In November 2010 the UK division of American Express was cautioned by the Office of Fair
Trading for the use of controversial charging orders against those in debt.[23] The regulator said
that the company was one of four companies who were encouraging customers to turn their
unsecured credit card debts into a form of secured debt.
Loyalty acquisition
In March 2011, American Express completed a $685m purchase of Loyalty Partner, which
operates the Payback loyalty program in Germany and Poland, and the i-Mint loyalty program in
India.[24]
Business model
Typical credit card business model
When a consumer makes a purchase using a credit or charge card, a small portion of the price is
paid as a fee (known as the merchant discount), with the merchant keeping the remainder. There
are typically three parties who split this fee amongst themselves:
1. Acquiring bank: the bank which processes credit card transactions for a merchant,
including crediting the merchant's account for the value charged to a credit card less all
fees.
2. Issuing bank: the bank which issues the consumer's credit card. This is the bank a
consumer is responsible for repaying after making a credit card purchase. The issuer's
share of the merchant discount is known as the interchange fee.
3. Network: the link between acquiring banks and issuing banks. These banks have
relationships with a network, rather than with each other, for fulfilling card purchases.
This allows a card issued by a community bank in Peru to be used at a shop in South
Africa, for instance, without requiring the banks to have a direct relationship with each
other. The two largest networks in the world are Visa and MasterCard. American
Express operates its own network.
The average merchant discount in the United States is 1.9%. Of this, approximately 0.1% goes to
the acquirer, 1.7% to the issuer, and 0.09% to the network.[25]
Most Prime and Superprime card issuers use the majority of their interchange revenue to
fund loyalty programs like frequent flyer points and cash back, and hence their profit from card
spending is small relative to the interest they earn from card lending.
Card products
Consumer cards
The cards
See also: Centurion Card, American Express Red, and ExpressPay
American Express is best known for its iconic Green, Gold, and Platinum charge cards, and
offers credit cards of similar color levels in most countries.
In the 1950s, American Express issued its first credit card, which caught on quickly in the
booming postwar economy and signaled the company's transition to a wider consumer base. In
1966, the company issued its first gold card, in an effort to cater to the upper echelon of business
travel. Its platinum card debuted in 1984 and continues to be immensely popular as it is second
in exclusivity only to the Centurion Card.
In 1999, American Express introduced the Centurion Card, often referred to as the "black card,"
which caters to an even more affluent and elite customer segment. The card was initially
available only to select users of the Platinum card. The annual fee for the card is $2,500 (up from
$1,000 at introduction) with an additional one-time initiation fee of $5,000. American Express
created the card line amid rumors and urban legends in the 1980s that it produced an ultra-
exclusive black card for elite users who could purchase anything with it.[26]
American Express cards range between no annual fee (for Blue and many other consumer and
business cards) and a $450 annual fee (for the Platinum card). Annual fees for the Green card
start at $95 (first year free), while Gold card annual fees start at $125.
American Express has several co-branded credit cards, with most falling into one of three
categories:
Traveler's checks
Amex is the largest provider of traveler's checks in the world.
In 2005, American Express released the American Express Travelers Check Card, a stored-value
card that serves the same purposes as a traveler's check, but can be used in stores like a credit
card. The card has since been discontinued as of October 31, 2007, due to "changing market
conditions". All cardholders were issued refund checks for the remaining balances.
Shearson/American Express
See also: Shearson/American Express
Travel
American Express established a Travel Division in 1915 that tied together all of the earlier
efforts at making travel easier, and soon established its first travel agencies. In the 1930s, the
Travel Division had grown widely. Albert K. Dawson was instrumental in expanding business
operations overseas, even investing in tourist relations with the Soviet Union. Dawson during
World War I had been a photographer and film correspondent with the German army. Today the
focus of The Travel Division is on business customers and business travel.
Management Hierarchy
Key executives include:[4]
Rewards Program
Exotic family vacations. Exquisite dining experiences. Exciting shopping privileges. With the touch
of Platinum, it’s a more rewarding life indeed.
Membership Rewards First Collection
Redeem your Rewards Points from a distinctive collection of Premium Partners , offering an array of luxury
Rewards.
Whether it’s discovering new experiences while you travel, savouring the finest tastes from around
the world, or having every wish fulfilled, Platinum makes it all possible.
Platinum Travel
From access to premium airport lounges to exclusive privileges at the finest hotels, Platinum makes every
journey extraordinary.
Platinum Concierge
Platinum Travel Services
24-hour Card Related Assistance
Global Assist
Travel Emergency Assistance
Home Assist
Platinum Protection
Eligibility
To save time before you apply for your Card, it's best to make sure you can say yes to the following:
Highlights-
Get a Welcome Gift 1 of 22,000 Bonus Membership Rewards Points
Get 1 Membership Rewards Point for every Rs.40 spent
Enjoy complimentary membership 2 to Priority Pass, with the US$99 annual membership fee
waived off exclusively for you
Get exclusive access to the luxurious American Express Platinum Lounges 2 at Delhi and Mumbai
Dosmestic Airports
Savour exciting dining privileges at Taj Hotels with complimentary membership 2 to Taj Epicure
Plus
Enjoy complimentary golf 2 at 5 premier courses in India.
Reward Programes
Make a unique fashion statement or experience the finest that the world has to offer – make it a more
rewarding life with the exquisite touch of Platinum.
Platinum Stays2
Platinum Golf2
Platinum Wine2
Platinum Concierge3
Platinum Assist4
Welcome Everywhere
Additional & Supplementary Cards5
Eligibility
To save time before you apply for your Card, it’s best to make sure you can say yes to the following:
Highlights
Reward Program
From the moment you start using your Card, it starts making it a more rewarding journey for you.
Welcome Gift1: Get 20,000 Bonus JPMiles on the first charge on your Card + get a complimentary Jet
Airways Base Fare Waived Domestic Ticket2
Earn 6 JPMiles for every Rs.100 on all your regular spending
Earn 12 JPMiles per Rs.100 spent for revenue tickets booked on www.jetairways.com or
www.jetkonnect.com using your Jet Airways American Express Platinum Credit Card
Enjoy an accelerated earn rate of up to 15/20 JPMiles per Rs.100 on your spending atselect American
Express Platinum Partners 4.
Besides helping you accumulate JPMiles at an incredible rate, your Jet Airways American Express
Platinum Credit Card also brings you a range of exclusive privileges.
Complimentary access to American Express Platinum Lounges at Delhi and Mumbai Domestic
Airports3
Enjoy complimentary membership5 to Priority Pass, with the US$99 annual membership fee waived off
exclusively for you
Enjoy Dedicated Check in6 & Excess Baggage Waiver 6 of 10kg on Jet Airways and JetKonnect flights
within India.
Jet Airways & JetKonnect Privileges
Enjoy 5% discount7 on Base Fare for revenue ticket bookings made on jetairways.com or
jetkonnect.com
Get 25% Base Fare discount 8 on one Domestic Business Class Companion Ticket (valid till November
30, 2013).
Enjoy exclusive offers on travel, dining, shopping and entertainment around the world, with American
Express Global Selects.
Your Jet Airways American Express Platinum Credit Card entitles you to exclusive benefits and the
highest standard of personalized service that American Express is renowned for.
Platinum Concierge
Zero Lost Card Liability
Supplementary Cards
Eligibility
To save time before you apply for your Card, it’s best to make sure you can say yes to the following:
Highlights
Welcome Gift1 of 5,000 Milestone Bonus Membership Rewards Points redeemable for IndiGo
Vouchers worth Rs.4000
Spend Rs.1.90 lacs in a year and get IndiGo Vouchers2 worth more than Rs.8000
Spend Rs.4 lacs in a year and additionally get IndiGo Vouchers 2 worth more than Rs.12,5003. Also get
a voucher4 worth Rs.10,000 from the Taj Group
Enjoy complimentary membership5 to Priority Pass, with the US$99 annual membership fee waived off
Pay in easy installments with the 'Pay-in-Parts' privilege
Rewards Programme
Welcome Gift1 of 5000 Milestone Bonus Membership Rewards Points redeemable for IndiGo
Vouchers worth Rs.4,000
Spend Rs.1.90 lacs in a year and get IndiGo Vouchers2 worth more than Rs.8,000
On spending Rs.1.90 lacs in a year, earn 7,500 Spend Milestone Bonus Membership Rewards Points
redeemable for IndiGo Vouchers worth Rs.6,000
You also earn 1 Membership Rewards Point for every Rs.40 spent on the Card. On spending Rs.1.90
lacs in a year, earn 4,750 Regular Membership Rewards Points redeemable for IndiGo Vouchers worth
Rs.2,375
You can further accelerate your Regular Membership Rewards Points by 10 times and 5 times at
Membership Rewards partner merchants6. These points can be redeemed for additional IndiGo Vouchers
In case you don't want to redeem your rewards points for IndiGo Vouchers, you can redeem them by
choosing from over 600 other redemption options. The redemption value will vary depending upon the item
redeemed
Spend Rs.4 lacs in a year and additionally get IndiGo Vouchers 2 worth more than Rs.125003
On spending Rs.4 lacs in a year, earn 10,000 Spend Milestone Bonus Membership Rewards Points
redeemable for IndiGo Vouchers worth Rs.10,000
You also earn 1 Membership Rewards Point for every Rs.40 spent on the Card. On spending Rs.4 lacs
in a year, you earn additional 5,250 Regular Membership Rewards Points redeemable for IndiGo Vouchers
worth Rs.2,625
You can further accelerate your Regular Membership Rewards Points by 10 times and 5 Times at
Membership Rewards partner merchants6. These points can be redeemed for additional IndiGo Vouchers
In case you don't want to redeem your rewards points for IndiGo Vouchers, you can redeem them by
choosing from over 600 other redemption options. The redemption value will vary depending upon the item
redeemed
Spend Rs.4 lacs in a year and get a voucher4 worth Rs.10000 from the Taj Group. This voucher will
be mailed to you once you reach the spend threshold of Rs.4 lacs
That's not all. You can continue to earn Membership Reward points on all your spending with the
American Express Platinum Travel Credit Card.
Supplementary Cards
Zero Lost Card Liability
PAY-IN-PARTS Privilege
Platinum Services
Eligibility
To save time before you apply for your Card, it’s best to make sure you can say yes to the following:
American Express® Gold Card
Highlights
Earn 1000 Bonus MR Points for simply using your Card 4 times every month
Earn 5000 MR Points upon First Year Card Renewal
Redeem from the fabulous 18 carat and 24 carat Gold Collection
Enjoy flexibility in spending with no predefined credit limit.
Rewards Programme
You can earn 1 Membership Rewards Point on every Rs 50 in purchases except on
telecommunications, insurance, fuel and other utility services * where you will earn 1 Membership
Rewards Point per Rs. 100. Your Points are worth their weight in Gold with a range of exciting
rewards to choose from.
Get fabulous Rewards from the stunning new 18 carat and 24 carat Gold Collection, specially chosen
for you. As your Membership Rewards Points keep growing, the rewards shine brighter with every carat.
Points
Rewards
24,000
18,000
Enjoy the flexibility to redeem your Points from over 600+ exciting redemption
options including leading airlines and hotels, electronics and more.
Enjoy discounts of up to 20% off every time you dine at select restaurants across your
city.
Gold Services
24X7 Card Related Assistance
Dispute Resolution
Zero lost Card liability
Emergency Card Replacement
2 Complimentary Supplementary Gold Cards.
Eligibility
To save time before you apply for your Card, it’s best to make sure you can say yes to
the following:
Highlights
Rewards Programme
The NEW American Express PAYBACK Credit Card rewards you with
PAYBACK Points from both American Express and PAYBACK 1 – India's largest
loyalty programme
Get 3 PAYBACK Points from American Express on every Rs.100 spent
Boost your PAYBACK Points when you shop at over 40 PAYBACK partner brands,
including Big Bazaar, MakeMyTrip.com, Pantaloons and many more . These PAYBACK
points vary from partner to partner1.
Here are examples of how you can earn multiple Points:
For every Rs.100 spent at PAYBACK partner Pantaloons, you will get 3 Payback
Pointsfrom American Express and 4 Payback Points from Pantaloons, adding up to 7
Payback Points
For every Rs.200 spent at PAYBACK partner Big Bazaar, you will get 6 Payback
Pointsfrom American Express and 5 Payback Points from Big Bazaar, so you will get a
total of11 Payback Points.
Welcome gift
Get gift vouchers3 worth Rs.3,000 as a special gift on enrollment to the NEW
American Express PAYBACK Credit Card
Earn 6 additional PAYBACK Points for every Rs. 100 spent along with the regular 3
PAYBACK Points, on spending Rs.15,000 within the first 60 days from the date of Card
approval, giving you a total of 1,350 PAYBACK Points2.
Here's how:
On spending Rs.15,000 in the first 60 days, you earn:
Regular Points (3 PAYBACK Points for every Rs. 100 spent) = 450
Additional Points (6 PAYBACK points for every Rs. 100 spent) = 900
Total PAYBACK Points = 1350
Additionally, if you shop at PAYBACK partners 1, you can earn multiple points, making
this a truly special offer.
Redeem your rewards
Your Points bring you closer to fabulous rewards with every purchase. Here are 3 easy
ways to redeem them:
PAYBACK Online Catalogue
PAYBACK Partner Outlets
PAYBACK Online Partners
With the 'Pay-in-Parts' Privilege4 on American Express PAYBACK Credit Card, convert
your transactions above Rs.5,000 into installments at:
0% Processing Fee
1.49% p.m. interest and
No foreclosure charges
Please SMS 'EMI' to 5616166 to know more or email at emi@aexp.com.
Additional Offers
Enjoy big savings and discounts from time to time with the American Express
PAYBACK Credit Card at our Offer Centre.
Other exciting offers are available on:
Dining
Shopping
Fuel
Eligibility
To save time before you apply for your Card, it’s best to make sure you can say yes to
the following:
Time Inc. And American Express Reach Agreement for Time Inc. to Acquire American
Express Publishing
NEW YORK, September 10, 2013 --
Time Inc. and American Express Company (NYSE: AXP) today announced an agreement for
Time Inc. to acquire American Express Publishing Corporation. The sale is expected to be
completed in the fourth quarter of 2013, subject to satisfaction of customary closing conditions.
American Express Publishing, with brands including Travel + Leisure and Food & Wine, will
become a wholly-owned subsidiary of Time Inc.
“American Express Publishing is home to the most desirable brands in the luxury space and
we’re delighted they will become part of Time Inc.,” said Joe Ripp, Chief Executive Officer,
Time Inc. “We have deep respect for Ed Kelly and his talented team. We know their business
well and we believe we can create some exciting synergistic opportunities across our portfolio.”
“We have a long-term relationship with Time Inc. that goes back many years,” said John Hayes,
Chief Marketing Officer, American Express. “Under Ed Kelly’s leadership, American Express
Publishing has done extraordinary work with great skill, passion and accomplishment. While the
company has outperformed its peers by creating editorial products of exceptional quality,
banking regulations limit our ability to engage in non-financial activities. We concluded that
Time Inc. is the ideal partner to continue the group’s tradition of excellence, and we expect to
work closely with them on a range of marketing initiatives in the future.”
“We’ve built a great business around respect for our people and the brands that they serve,” said
Ed Kelly, President and Chief Executive Officer of American Express Publishing Corporation.
“This sale is a formula for success that will allow us to further develop our extraordinary brands,
services and traditions, and we look forward to being part of the Time Inc. family.”
The acquisition follows a 20-year relationship between Time Inc. and American Express
Publishing during which Time Inc. has provided management services support to the company.
Eligible American Express Card Members will continue to receive Departures,Black
Ink and Executive Travel.
The American Express Publishing brands reach 36 million consumers worldwide across its
portfolio which includes the company’s magazines and branded books, digital properties, social
media platforms, membership clubs, retail stores and more than a hundred events and
experiences.
American Express and Isis® announced today that they will introduce American Express Serve
to the Isis Mobile Wallet™. The new co-branded account will be offered in every Isis Mobile
Wallet as a part of a nationwide launch later this year, enabling millions of Americans to tap and
pay using their American Express Serve account.
By adding American Express Serve to the Wallet, customers will be able to pay bills online and
send money to friends and family. They will also be able to add cash to their American Express
Serve account or fund it using an existing bank account, any credit or debit card or through direct
deposit.
“Linking the platforms will allow millions of people to conveniently and inexpensively manage
and move their money,” said Dan Schulman, group president, Enterprise Growth, American
Express. “From the palm of your hand, consumers including those without access to traditional
bank accounts or credit can have access to everyday financial services. And our combined
solution works in today’s retail environment, and in the emerging ‘tap to pay’ point of sale
ecosystem.”
“Our relationship with American Express Serve underscores our mutual commitment to
providing consumers with choice and value in mobile payments,” said Michael Abbott, chief
executive officer, Isis. “We learned through our pilot that customers love the convenience of tap
and pay with the ability to manage their payments and loyalty programs from one app. By adding
American Express Serve to the Isis Wallet, we can immediately provide millions of consumers
the opportunity to participate in mobile commerce as we continue to enrich the consumer
experience.”
Customers will be able to use eligible American Express Serve accounts within the Isis Mobile
Wallet to:
Load funds to their American Express Serve account from a variety of sources,
including a bank account, debit, credit or charge card, or by receiving money from
another American Express Serve account
Load cash to their American Express Serve account
Tap and pay with their phone at any NFC enabled retail location that accepts
American Express
Use their American Express Serve Card at any merchant that accepts American
Express Cards, both online and offline
Pay bills electronically
Make person to person (P2P) payments to other American Express Serve
accountholders
Add funds using direct deposit
According to the FDIC, nearly 70 million Americans do not have bank accounts or access to
credit. Many of these Americans are paid in cash and must rely on expensive services to pay
their bills or send money to friends or family. By adding alternatives to traditional banking
services at a low cost to the Isis and American Express Serve experience, American Express
Serve is now able to provide a unique service proposition to millions of Americans.
The Isis Mobile Wallet uses near field communications (NFC) technology to allow consumers to
pay, redeem coupons and present loyalty cards with their mobile phones. American Express'
U.S. Consumer and OPEN® Small Business Cards are currently available in the Isis Mobile
Wallet. Isis recently announced plans to expand nationwide later this year.
About American Express
American Express is a global services company, providing customers with access to products,
insights and experiences that enrich lives and build business success. Learn more
at americanexpress.com and connect with us
on facebook.com/americanexpress,twitter.com/americanexpress and youtube.com/americanexpre
ss.
Key links to products and services: charge and credit cards, business credit cards,travel
services, gift cards, prepaid cards, merchant services, business travel, andcorporate card.
About Isis
The joint venture is between AT&T Mobility LLC, T-Mobile USA, Inc. and Verizon Wireless
and is based in New York City. The venture is chartered with building Isis, a national mobile
commerce venture that will fundamentally transform how people shop, pay and save. The Isis
Mobile Commerce Platform™ will be available to all merchants, banks, payment networks and
mobile carriers. Isis, Isis Mobile Wallet, Isis Ready, Isis Mobile Commerce Platform and the
associated logos are trademarks of JVL Ventures, LLC in the U.S. and/or other countries. Other
logos, product and company names mentioned herein may be the trademarks of their respective
owners. For more information visit www.paywithisis.com.
Consolidated expenses totaled $5.7 billion, up 1 percent from $5.6 billion last year. The increase
reflected higher rewards costs, driven by higher cardmember spending. Expense levels for the
quarter reflected, in part, ongoing efforts to contain operating expenses(2) throughout the
company.
The effective tax rate was 30 percent, up from 29 percent a year ago.
The company's return on average equity (ROE) was 23.6 percent, down from 26.6 percent a year
ago.
“We generated record bottom line results this quarter despite an uneven global economy,” said
Kenneth I. Chenault, chairman and chief executive officer. “Cardmember spending grew by 7
percent (8 percent adjusted for foreign currency translations), with broad-based gains throughout
the business both here in the U.S. and internationally. We continued to build our cardmember
loan portfolio while maintaining credit indicators at historically strong levels.
“We are well on track with the restructuring and related initiatives that we announced earlier this
year. They are helping us contain expense growth and that, in turn, is giving us the flexibility to
make substantial investments designed to grow the business and expand into newer segments of
the market.
“We continue to believe that maintaining a lean operating structure will be a critical component
of delivering shareholder value in the current environment.
Segment Results
U.S. Card Services reported second-quarter net income of $743 million, up 3 percent from $718
million a year ago.
Total revenues net of interest expense increased 5 percent to $4.2 billion, from $4.0 billion a year
ago. Revenues reflected higher cardmember spending and a rise in net interest income that was
driven by the growth in cardmember loans.
Provisions for losses totaled $402 million, up 29 percent from $312 million a year ago. The
increase primarily reflected lower reserve releases this year, partially offset by the benefit of
lower net write-offs.
Total expenses were $2.7 billion, up 3 percent from $2.6 billion a year ago. The increase
primarily reflected higher rewards and marketing costs, partially offset by lower operating
expenses. The higher rewards costs were driven by stronger cardmember spending.
The effective tax rate was 37 percent compared to 38 percent from a year ago.
International Card Services reported second-quarter net income of $208 million, up 17 percent
from $178 million a year ago.
Total revenues net of interest expense were $1.3 billion, unchanged from a year ago. Adjusted
for foreign currency translations, revenues rose 3 percent from the year ago quarter.(3)
Provisions for losses totaled $116 million, up 23 percent from $94 million a year ago. The
increase primarily reflected lower reserve releases this year.
Total expenses were $1.0 billion, down 3 percent from $1.1 billion a year ago. The decrease
primarily reflected lower operating expenses. Adjusted for foreign currency translations,
expenses were down 1 percent compared to the year ago quarter.(3)
The effective tax rate was (33) percent compared to (22) percent a year ago. The current period
tax rate reflected the resolution of certain prior years' tax items. The prior year’s tax rate
reflected the realization of certain foreign tax credits. In addition, tax rates in both quarters
reflect recurring permanent tax benefits allocable to the segment.
Global Commercial Services reported second-quarter net income of $226 million, up 3 percent
from $219 million a year ago.
Total revenues net of interest expense rose 1 percent to $1.2 billion. The increase primarily
reflected higher cardmember spending, partially offset by lower business travel commissions and
fees.
Total expenses were $853 million, down 4 percent from $886 million a year ago. The decline
primarily reflected lower salaries and employee benefits and other operating expenses. Partially
offsetting the decrease were higher rewards costs during the quarter.
The effective tax rate was 32 percent compared to 27 percent a year ago. Last year’s tax rate
reflected the realization of certain foreign tax credits.
Global Network & Merchant Services reported second-quarter net income of $412 million, up
11 percent from $372 million a year ago.
Total revenues net of interest expense rose 5 percent to $1.4 billion, from $1.3 billion a year ago.
The increase reflected higher merchant-related revenues driven by a rise in global cardmember
spending.
Total expenses decreased 4 percent to $715 million, from $744 million a year ago. The decline
reflected lower operating expenses, as well as lower marketing, promotion, rewards and
cardmember services costs.
The effective tax rate was 36 percent compared to 34 percent a year ago.
Corporate and Other reported second-quarter net loss of $184 million compared with net loss
of $148 million in the year ago period.
The 2013 Second Quarter Earnings Supplement will be available today on the American Express
web site at http://ir.americanexpress.com. An investor conference call will be held at 5:00 p.m.
(ET) today to discuss second-quarter earnings results. Live audio and presentation slides for the
investor conference call will be available to the general public at the same web site. A replay of
the conference call will be available later today at the same web site address.
This release includes forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are based on the company's expected business
and financial performance and are subject to risks and uncertainties. Actual results may differ
from those set forth in the forward-looking statements due to a variety of factors, including those
contained in the company's Annual Report on Form 10-K for the year ended December 31, 2012,
its Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 and the company’s
other filings with the Securities and Exchange Commission. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the date on which
they are made. The company undertakes no obligation to update or revise any forward-looking
statements.
(1) Represents net income less earnings allocated to participating share awards of $13 million
and $14 million for the three months ended June 30, 2013 and 2012, respectively, and $24
million and $28 million for the six months ended June 30, 2013 and 2012, respectively.
(2) Operating expenses represent salaries and employee benefits, professional services,
occupancy and equipment, communications and other expenses.
(3) As reported in this release, FX adjusted information, which constitute non-GAAP financial
measures, assume a constant exchange rate between the periods being compared for purposes of
currency translation into U.S. dollars (i.e., assumes the foreign exchange rates used to determine
results for the three months ended June 30, 2013 apply to the period(s) against which such results
are being compared). The company believes the presentation of information on an FX adjusted
basis is helpful to investors by making it easier to compare the company's performance in one
period to that of another period without the variability caused by fluctuations in currency
exchange rates.
Vision
We work hard every day to make American Express the world’s most respected service brand.
Operating Principles-
Living up to our values is our first priority. These three operating principles also guide our
daily actions:
Offer superior value propositions to all of our customers- We aim to provide products,
services, benefits and rewards that deliver more value than any competitor.
Support the American Express brand- American Express has one of the world’s most trusted
brands. We strive to always provide the world-class service and personal recognition that our
customers expect from us.
RESEARCH OBJECTIVES AND SCOPE OF RESEARCH PROJECT
Creadi card company were with good background human being and through rigorous process of
recruitment but still not able to perform up to the expectation level of company, HR is not able to
sort out the problem why the performance is not coming even after giving the full marketing and
operational support. The communication technique and dealing with the customers is also a
problem to the Creadi card company.
To acquire new customer by convincing them and to promote the benefits of those which
are provided by the American Express.
To find the different way of convincing customers.
To study brand image of the American Express.
To increase the business of the American Express.
Studying the increasing business scope of the American Express. Market segmentation to find
the potential customers for the American Express. To study how the various products are
positioned in the market. Corporate marketing of products. Customers’ perception on the various
products of the American Express.
All the findings and conclusions obtained are based on the survey done in the working area
within the time limit. I tried to select the sample representative of the whole group during my
summer training. I have collected data from people linked with different professional at Pune.
In which data on the situation surrounding the problems shall be gathered to arrive at.
The correct definition of the problem. An understanding of its environment.
Research was initiated by examining the primary and secondary data to gain insight into the
problem. By analyzing the primary and secondary data, the study aim is to explore the short
comings of the present system and primary data will help to validate the analysis of secondary
data besides on unrevealing the areas which calls for improvement.
The data for this research project has been collected through self Administration. Due to time
limitation and other constraints direct personal interview method is used. A structured
questionnaire was framed as it is less time consuming, generates specific and to the point
information, easier to tabulate and interpret. Moreover respondents prefer to give direct answers.
In questionnaires open ended and closed ended, both the types of questions has been used.
2: PRIMARY DATA: All the people from different profession were personally visited and
interviewed. They were the main source of Primary data. The method of collection of primary
data was direct personal interview through a structured questionnaire.
4.3 SAMPLING PLAN: Since it is not possible to study whole universe, it becomes necessary
to take sample from the universe to know about its characteristics.
4.4 SAMPLE SIZE: My sample size for this project was 100 respondents. Since it was not
possible to cover the whole universe in the available time period, it was necessary for me to take
a sample size of 100 respondents.
It was not possible to understand thoroughly about the different marketing aspects of the
Financial Consultant within 60 days. As stipend, money was not given it was difficult to
continue the project work. All the work was limited in some limited areas of Pune so the findings
should not be generalized. The area of research was Pune and it was too vast an area to cover
within 60 days.
Q1.Your Age?
Ans.
1. 18-23 Years 20 Person
2. 24-29 Years 40 Person
3. 30-35 Years 20 Person
4. 35 Years and above 20 Person
Interpretation
Age 18 to 23
Age 24 to 29
Age 30 to 35
Age 35 & above
Marital Status
Married
Single
Q3. Educational Qualification?
Undergraduate □
Graduate □
Postgraduate □
Ans.
Undergraduate 20 Person
Graduate 52 Person
Postgraduate 28 Person
60
50
40
Undergraduate
30
Graduate
20 Post Graduate
10
0 Post Graduate
Undergraduate
Interpretation From above response it can be seen that.
20% respondents are Under graduate.
52% respondents are Graduate.
28% respondents are Post graduate.
In pune
Occupation
Business
Profession
Service
Annual Income
Less than 2 lac
2lac to 5 lac
5lac to 8 lac
8 lac & above
Ans.
Less than 2 lacs 30 Person
Between 2 to 5 lacs 45 Person
Between 5to 8 lacs 13 Person
More than 8 lacs 12 Person
Interpretation From above response it can be seen that.
30% respondent’s annual household income is less than 2 lacs.
45% respondent’s annual household income is between 2 to 5 lacs.
13% respondent’s annual household income is between 5 to 8 lacs.
12% respondent’s annual household income is more than 8 lacs.
Q7. What is your perception about different products/services provided by American Express?
Lucrative □
Not lucrative □
No idea □
Ans.
Lucrative 42 Person
Not lucrative 53 Person
No idea 15 Person
Q9. Do you have all the documents which are required to open an account?
Yes
No
Ans.
Yes 85 Person
No 15 Person
Documents availability
Yes
No
Q10. Are you aware that the American Express provides you free phone help & online services.
If you open a new savings account with American Express?
Yes □
No □
Ans.
Yes 62 Person
No 38 Person
Service Awareness
Yes
No
Q11.Are you aware of different terms and conditions which are very much essential to maintain
an account at American Express?
Yes □
No □
Ans.
Yes 55 Person
No 45 Person
yes
no
Q13. Do you know about American Express’s recruitment policies related to Credit card
company?
Yes □
No □
Ans.
Yes 68 Person
No 32 Person
Yes
no
6.1 CONCLUSIONS:
The project opportunities provided was market segmentation and identifying prospective
customers in potential geographical location and convincing them to attract more customers so
that new business opportunities of the American Express can be explored. Through this project,
it could be concluded that people are not much aware about the various products of the American
Express and many of them not interested to open an account, to invest money at all. services was
considered as unsought good which require hard core selling, but in changing trend in income
and people becoming financially literate, the demand for American Expressing sector is
increasing day by day.
So, at last the conclusion is that there is tough competition ahead for the company from its major
competitors in the American Expressing sector. Last but not the least I would like to thank
American Express for giving me an opportunity to work in the field of Marketing and Operation.
I hope the company finds my analysis relevant.
6.2 SUGGESTIONS:
To make people aware about the benefit of becoming a customer of American Express,
following activities of advertisement should be done through
CHAPTER 7- LIMITATIONS
Every work has its own limitation. Limitations are extent to which the process should not
exceed. Limitations of this project are:
The project was constrained by time limit of two months.
Mindset of people may very depending upon their age, gender, income etc.
Getting appointment from the concern person was very difficult.
People mind set about the survey was obstacles in acquiring complete Respondents were
very busy in their schedule. So it was very time consuming for information & positive
interaction, them to answer all the questions properly.
ANNEXURES
1. QUESTIONNAIRE
DearSir/Madam,
Name: ………………………………………………………………………..
Address: ……………………………………………………………………..
Contact No :®………………( O)……………… (M)………………………
City: ………...............Pin: ………………….State: ………………………
I am a student of IIBR presently doing a project on“IN WHICH AREA MORE FOCUS Sales
& Promotion”.I request you to kindly fill the questionnaire below and I assure you that the data
generated shall be kept confidential.
1. Your Age: ____________________
2. Education Qualification.
1. Undergraduate □
2. Graduate □
3. Postgraduate □
3. Marital Status .
Married □
Single □
No. of Children: __________
5. Occupation.
Business
Profession
Service
(Please mention below the type of business/profession you are in incase of service please
mention your organization name and designation)
7. What is your perception about different products and services offered by American Express?
Lucrative □
Not lucrative □
No idea □
10. Do you have all the documents which are required to open an account?
Yes □
No □
11. Are you aware of that American Express credit card facilities ?
yes □
No □
12. Are you aware of different terms and conditions which are very much essential to maintain
an account at American Express?
Yes □
No □
13. Do you know about American Express’s recruitment policies related to Credit card
company?
Yes □
No □
14. How much limit do you want if you go for a credit card ?
Less than 1 lack □
1 Lack to 2 lack
2 Lack to 5 Lack
5 lack & above □
Date:
Place: Signature
Thank You
Bibliography
Various Books.