American Express Company is a financial service-providing and bank-holding American company. The merger of various cash-in-transit companies laid the foundation of American Express in 1850 as a freight forwarding company. Today, we’ll discuss the SWOT analysis of American Express; it outlines strengths and weaknesses; opportunities, and threats that the company has to face; as a business strategy analysis example company.
Products and services portfolio of American Express
- Payment card services
- Insurance services
- Travel services
- Debit payment cards
- Traveler’s cheques
- Corporate banking
- Charge payment cards
- Credit payment cards
American Express business in Industries
- Payment card services
- Banking and finances
Statistical facts and figures of American Express
- Annual revenue – 60.52 billion USD (2023)
- Net income – 10.51 billion USD (2023)
- Employees – 74600
- Asset net worth – 261.1 billion USD (2023)
Competitors of American Express
- Discover
- Visa Card
- Master Card
- Capital One
- US Bank
- FIS
- Truist
- Stripe Payments
- Shopify POS
- Karbon
- Amazon Pay
- Fresh Books
The SWOT analysis of American Express would analyze the internal strengths and weaknesses of the company; and external opportunities and threats that the brand has to face. Here’s American Express SWOT analysis as a business strategy analysis example company as follows;
Strengths of American Express
Some of the main internal strengths in the American Express SWOT analysis example company as business strategy analysis are as follows;
Recognized Brand
American Express is a well-recognized financial service-providing company. The card payment company has earned a significant market share and the company’s financial services have got positive associations. In fact, the company has earned a reputation for top-quality customer service, premium status, quality, and prestige.
Satisfied Customers
American Express offers a seamless experience to its customers and the company has established a very large database of loyal customers. Premium services and offering exclusive access to the events, concierge services, and other services further improve the customer satisfaction level.
Large Product Portfolio
American Express has established a portfolio comprising a very wide range of financial services. They’re like insurance, personal loans, card payments, digital banking, travel, and other business services. A large financial service portfolio helps the company to target various segments of the customer markets.
High Spending in the US Market
American Express card has a higher card acceptance rate across the USA, approximately 99% of the retailers and merchants accept Amex cards except Costco. In fact, Amex Cardholders perform heavy transactions and more spending through it than any other US card. It amplifies the company’s earnings with high fees and per-transaction charges.
Rewards & Incentives
In order to retain and maintain the loyal database of customers and Amex card users; American Express offers multiple rewards and incentives. They could be in the form of cashback, discounts, gifts, and other rewards. It helps the company to attract new customers and retain the existing ones.
Brand Value
American Express has a high brand value with a market capital of 163.95 billion USD, according to Forbes. Along with higher market capital, Amex has a strong financial position with an asset net worth of 261 billion USD. All of these statistical figures strengthen the company’s financial position.
Weaknesses of American Express
Some of the main internal weaknesses in the American Express SWOT analysis example company as business strategy analysis are as follows;
High Fees & Charges
Being the premium brand, American Express charges higher fees per transaction than any other card service providing companies; Mastercard and Visa. That’s why many small businesses and price-conscious customers avoid performing transactions through Amex because they want to save capital resources.
Heavy Reliance on Cards
Card payment fees are the main source of revenue of American Express, and the company is heavily relying on it. It puts the company’s financial position at a great risk; in case of any uncertain event.
Opportunities for American Express
Some of the main available opportunities in the American Express SWOT analysis example company as business strategy analysis are as follows;
Market Expansion
The acceptance rate of Amex cards is lower in Europe, Asia, and other countries. American Express should consider expanding its business in developing markets and other geographical regions. It allows the company to amplify its customer market share and approach new customers.
Portfolio Expansion
As mentioned earlier, American Express is heavily relying on card service fees as its main source of income. It is not a good financial strategy. The company should diversify its financial service portfolio and offer new services to online users. It allows the company to further strengthen its market position.
Strategic Alliance
Spending on market expansion, American Express should develop strategic partnerships and alliances with card service-providing companies. It allows the company to smoothly enter new regions and markets and amplify its market.
Blockchain Technology
The trend of digital currencies like Bitcoin and blockchain technology is increasing significantly. American Express should offer conversion into digital currency and accept Bitcoin for transactions. It helps the company attract a lot of new users and customers.
Threats to American Express
Some of the main potential threats in the American Express SWOT analysis example company as business strategy analysis are as follows;
Competition
The financial market and payment card service market have become highly competitive in recent years. There are multiple companies and banks offering card payment services, and it is gradually decreasing the market share of Amex Card.
Regulatory compliance
Government regulations are very strict for banks and financial service-providing companies like data security, privacy, and data protection. It poses a significant challenge to American Express to comply with the strict regulations and maintain its profitability.
Conclusion: American Express SWOT Analysis Example Company |SWOT Analysis of American Express |Business Strategy Analysis
After an in-depth study of the SWOT analysis of American Express; we have realized that American Express is the world’s leading premium financial service company. If you are learning about the American Express SWOT analysis example company; then you should keep in mind the abovementioned internal strengths and weaknesses; external opportunities and threats as brand strategy analysis.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.
