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American Express SWOT & PESTLE Analysis

ID : 52380653| Sep 2020| 17 pages

COMPANY PROFILE -American Express

Business Sector :Banking and Financial Services

Operating Geography :United States, Global

About American Express :

American Express is a financial service MNC founded in 1850. It is headquartered in New York City. It provides charge and credit card products, travel-related services to consumers and businesses globally, merchant acquisition and processing, servicing and settlement, point-of-sale marketing and information products and services for fraud prevention. Its vision is to become the world’s most respected service brand by providing the premium value products and unsurpassed service to customers. It had 59,000 employees as of 2019. It is #40 in America’s top public companies by Forbes.
American Express Mission Statement states " The mission of our program is to bring to life the American Express value of good corporate citizenship by supporting diverse communities in ways that enhance the company’s reputation with employees, customers, business partners and other stakeholders.”

American Express Revenue :


Total revenues net of interest expense
US $ 43,556 million- FY ending Dec 2019 (year-on-year growth of 7.97%)
US $ 40,338 million- FY ending Dec 2018 (year-on-year growth of 9.38%)
US $ 36,878 million- FY ending Dec 2017

Competitive Analysis of American Express

SWOT
PESTLE
The SWOT analysis of American Express is presented below:
Strengths
Weaknesses
1. Strong brand with global footprint
2. Spend Centric Business Model
3. Broad portfolio of global consumer services
4. Cobrand portfolio and partnerships - large and growing
5. Global Merchant Services (GMS)
1. Over-dependence on digital systems for operations
2. Substantial Reliance on third-party for key services
Opportunities
Threats
1. Technological Advancements to supplement growth
2. Strategic mergers and acquisitions
3. Development of alternate payment Channels for greater market share
1. Stiff competition in financial services sector
2. Increasing regulatory requirements
3. Competitive Merchant discount rates
4. Dynamic and rapid growth of alternative payment mechanisms
5. Risk of currency fluctuation
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Detailed SWOT Analysis of American Express

 

Strength

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Weakness

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Opportunity

1. Technological Advancements to supplement growth: Innovative payment mechanisms, services and advancement in data management and analytics will enhance customer interactions and communication and authentication processes. This will increase its competitiveness in domestic and international market. If American Express’s new product development keeps pace with the changes in banking industry then it can further expand its market penetration globally which will increase its revenue. The rapidly changing payments landscape driven by innovative technologies will drive a 17% projected global digital commerce growth through 2021 and 10% projected consumer spend growth through 2022 as per Amex investor presentation. Technological advancement such as automation, usage of distributed ledger technologies (e.g. blockchain), app and mobile based services, use of big data, etc. Can ensure greater transparency, increased risk management and information management. This will lead to efficient operations and also reduce the operational costs and increases profit margins.

2. Strategic mergers and acquisitions: Mergers and acquisitions can improve the scale of American Express’s operations. If the bank continues to undertake potential transactions then its services, operations and financial condition will significantly improve and facilitate further expansion. Centurion Bank will be combined with American Express by mid-2018 and integrate more financial services into their product offerings and support its closed-loop functionality. In 2019, American Express acquired a digital payment automation platform, Strategic M&A which can also ease operational difficulties and get greater market access even in emerging economies by exploiting the brand value of the domestic institutions. It lowers operational costs through technological spill over, greater synergies and thus reduces liabilities. It will create new customer acquisition channels as well. The will also lead to deep rooted market growth as well as widen its global footprint as more products and services are offered.

3. Development of alternate payment Channels for greater market share: American Express continues to develop alternate payment channels for payment of credit card outstanding and other payments and dues like AmEx Express Checkout. It has also partnered with Ripple, the third largest cryptocurrency by market cap. This will increase liquidity and leverage the alternate non-card payments. Such mechanisms can increase cross-border financial flow like from USA to Britain in this case. This can improve Amex’s credit books and efficiency. More integration in payment gateways with more food joints, local brands & enabling peer-to-peer transfer mechanisms for payments through its digital payment. By expanding alternate payment systems to e-wallet, mobile-wallet, contactless payments it can tap on the growing consumer demand and attract more merchants for digital payments through its faster and seamless banking system and thus, can capture greater market share.

Threat

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Check Out Analysis of Other Relevant Companies

TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
References used in American Express Analysis Report

1. https://about.americanexpress.com/csr/docs/Amex-CSR-Report-Full-2016.pdf

2. https://www.snl.com/Cache/c392232277.html

3. https://www.forbes.com/sites/ciocentral/2018/03/15/how-american-express-excels-as-a-data-driven-culture/#2470e96c1635

4. https://www.pymnts.com/news/b2b-payments/2018/american-express-conferma-travel-booking/

5. https://www.ft.com/content/715d785e-23fc-11e8-ae48-60d3531b7d11

6. https://thefinancialbrand.com/68528/top-payment-trends-banking-p2p-digital/

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American Express SWOT & PESTLE Analysis - SWOT & PESTLE.COM

SWOT & PESTLE.com (2020). American Express SWOT & PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/american-express/ [Accessed 26 Nov, 2020].

In-text: (SWOT & PESTLE.com, 2020)

Copyrights and Disclaimer

American Express SWOT and PESTLE analysis has been conducted by Kanupriya Sheopuri and reviewed by senior analysts from Barakaat Consulting.

Copyright of American Express SWOT and PESTLE Analysis is the property of Barakaat Consulting. Please refer to the Terms and Conditions and Disclaimer for usage guidelines.

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American Express SWOT & PESTLE Analysis
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