Case study of two cultures Essay Example For Students

Contextual investigation of two societies Essay It is difficult for her to comprehend why westerners don't accomplish more to help one another and why when help is offered do we not acknowledge it without any problem. Alice considers everyone to be family and thinks that its difficult to live in regions where there is a low feeling of network, Alice experiences serious difficulties coordinating with these sorts of social orders and says she is a lot more joyful living in Bali than Australia since it is like her own way of life and ethnicity. She clarifies that it is difficult to get a handle on why a few times individuals think they owe something when somebody has helped them, she says that is the thing that you need a greater amount of in this culture, individuals need to comprehend that at some stage we as a whole need assistance from somebody and we ought to have the option to give without waiting be reimbursed and we ought to have the option to get with out agonizing over reimbursing (Alice Bebe, individual meeting, March 22, 2010). Airini clarifies that her way of life has been extraordinarily influenced by her ethnic foundation. Her dear companions are predominately from New Zealand or Samoan and every last bit of her companions enjoy their ethnic foundations. Despite the fact that she distinguishes herself as Australian and cherishes the Australian culture she says she fits into a sub bunch which is essentially recognized by her ethnic foundation. I love Australia and the manner in which individuals are here, however I feel generally comfortable with individuals that share my social information, we like to do things the conventional way and I find that in Australia there isnt numerous genuine Aussie customs aside from perhaps from tossing a shrimp on the BBQ and having a brew or two. I feel that my customs give me a sentiment of wealth in knowing who I am. I dont think any less of individuals that dont follow my customs, on the off chance that anything I feel frustrated about certain individuals that I think simply get somewhat lost since they have no strong base of who they are(Airini Manaia, individual meeting, March 22, 2010). How Culture Impacts on their Interaction with Others Often in the public eye people groups culture and ethnic foundations Within this paper a contextual analysis has been given looking at the likenesses and contrasts between two social foundations. An investigation on viewpoints of culture has been given. An assessment of what these points of view mean for a person in an alternate society has been performed, likewise the article takes a gander at how social orders can and do, manage social assorted variety. This data was sourced from two interviewees. Foundation data has been given on every interviewee and their point of view on culture was clarified. A depiction of how culture has affected on the educational encounters and conviction frameworks of every interviewee was investigated. The manner in which culture impacts on every interviewee cooperations with others will be portrayed. A few recommendations with respect to limiting the effect of social partitions were provided. At long last a conversation contrasting the social experience and likenesses and contrasts between the two meetings have been given. All through the paper important references were given to interface thoughts to hypothesis and reinforce contentions. References Bolstead, R. Hamblett, M. (2001). Traveling Communication. NZ: PearsonEducation John, O. Pervin, L. A. (2001). Character: hypothesis and research (eighth ed). New York: John Wiley and Sons Inc. Kosslyn, S. Rosenberg, R. (2001). Brain science: the mind, the individual and the world. Boston: Allyn and Bacon Inc. Matsumoto, D. , Juang, L. , (2008). Culture and brain research (fourth ed. ). Belmont, CA: Wadsworth Cengage Learning. Van Kreiken, Smith, Habibis, McDonald, Haralambous Holbourn, (2000) Sociology topics and points of view (second Ed), NSW, Pearson Education.

Good Business Schools With One-Year MBA Programs

Great Business Schools With One-Year MBA Programs A one-year MBA program is a Master of Business Administration (MBA) program that takes a year to finish. One-year MBA programs are otherwise called quick track MBA programs, quickened MBA projects, or year MBA programs. What separates this program from a customary MBA program is the measure of time it takes to finish the program and procure a degree. Customary MBA programs ordinarily take two years to finish. Along these lines, a one-year MBA program permits understudies to procure their degree in a fraction of the time it takes a normal understudy. One-year MBA programs additionally have money related advantages more than two-year programs. For example, educational cost is a large portion of the cost since you need to pay for only one year of training instead of two. There is additionally missed salary to consider. Going to class full-time for a long time implies two years without all day work salary. A one-year MBA program gets you back to work in a fraction of the time. Business colleges With One-Year MBA Programs INSEAD started offering the first year MBA program decades back. These projects are presently typical in numerous European schools. The notoriety of the projects has incited numerous U.S. business colleges to offer a quickened MBA choice notwithstanding conventional two-year MBA programs, official MBA projects, and low maintenance MBA programs. You won’t locate a one-year MBA program at each business college, however you ought to have no issue finding a one-year MBA program at a decent business college. Lets investigate a portion of the notable and respectable business colleges that permit understudies to gain a MBA in one year or less. INSEAD We start our investigation of one-year MBA programs with INSEAD on the grounds that it spearheaded the one-year MBA and is broadly viewed as outstanding amongst other MBA schools on the planet. INSEAD has grounds in France, Singapore, and Abu Dhabi. Their quickened MBA program can be finished in only 10 months. During that time, understudies take 20 courses (13 center administration courses and 7 electives). Understudies can browse in excess of 75 distinctive elective alternatives, which takes into account a completely adaptable encounter. Another positive trait of this program is the chance to encounter multicultural training. INSEAD understudies are various, speaking to in excess of 75 nationalities. During the initial four months of the program, understudies total many gathering ventures with the goal that they can realize what it resembles to lead and work in various groups. At any rate half of INSEAD graduates proceed to possess or deal with their own organization. Peruse increasingly about the INSEAD MBA program. Kellogg School of Management The Kellogg School of Management at Northwest University is one of the most noteworthy positioned U.S. schools with a one-year MBA program. It was likewise one of the first U.S. schools to offer a one-year MBA program. The most intriguing part of the Kellogg program is that it doesn’t jam two years worth of courses into a year like a few schools do. Rather, Kellogg understudies get the choice to skip center courses and spotlight on electives that coordinate their vocation objectives. With in excess of 200 courses to look over, understudies can truly ensure their training is as expansive or as engaged as they might want it to be. The customization proceeds with experiential learning. Kellogg has in excess of 1,000 experiential taking in chances to look over, including uncommon labs, courses, and ventures that furnish genuine involvement in basic business and the board issues. Peruse progressively about the Kellogg One-Year MBA program. IE Business School IE Business School is a Madrid school that is reliably positioned among the best schools in Europe and on a worldwide scale. The understudy body in the one-year MBA program, otherwise called the IE International MBA program, is 90 percent worldwide, which implies homerooms are differing. MBA understudies can browse either English or Spanish guidance. The educational plan avoids the customary - up to 40 percent of the program can be altered and custom-made to your individual vocation objectives and necessities. One-year MBA understudies begin with a center period that underlines business enterprise before proceeding onward to a lab period that comprises of two quickened labs intended to provideâ experiential, challenge-based learning. The program comes full circle with an elective period that permits understudies to tweak the remainder of their instruction with courses, learn at Wharton (an accomplice school), serious IE counseling ventures, a 7-multi week temporary job, and other interesting chances. Peruse increasingly about the IE International MBA program. Johnson Graduate School of Management For understudies who need to acquire an Ivy League MBA from a U.S. school in only a year, the Johnson Graduate School of Management at Cornell University is the spot to be. Johnsons one-year MBA program is explicitly intended for present and hopeful experts with solid administration and quantitative abilities. Understudies in the one-year MBA program take center courses during 10-week summer term before joining two-year MBA understudies in residual courses. One-year MBA understudies additionally approach the full scope of courses across Cornell University, which adds up to around 4,000 distinct choices. Features of the one-year MBA program incorporate worldwide examination trips, a fall semester Management Practicum that permits understudies to pick up hands-on understanding through genuine counseling ventures, and a spring semester Immersion Program that coordinates coursework with hands on work. Peruse increasingly about the Johnson One-Year MBA program. Choosing a One-Year MBA Program The business colleges referenced in this article are not by any means the only great schools with a one-year MBA program. There are a great deal of them out there! Be that as it may, these schools do give a strong case of what you should search for in a one-year program. Probably the most alluring projects offer: Various classroomsA strong center curriculumCustomizable electivesExperiential learning experiencesGlobal learning experiencesInternship openings

Living With Bad Credit is One Thing, But Can You Make It in Life With NO Credit

Living With Bad Credit is One Thing, But Can You Make It in Life With NO Credit Living With Bad Credit is One Thing, But Can You Make It in Life With NO Credit? Living With Bad Credit is One Thing, But Can You Make It in Life With NO Credit?If you want to live your life without ever using creditâ€"which means no loans and no credit cardsâ€"get ready to do a lot more transactions in straight cash.We often write about bad credit. How you get it, how to manage it, and how to get rid of it. But what if you don’t have any credit at all? Humans aren’t born with credit scores and it is totally possible to get well into adulthood without one.But can you have a successful life without a credit score in this day and age? And if so, how? With the help of our experts, those are the questions we’re going to answer for you today! Let’s get the basics out of the way.As we always like to do when we talk about credit, let’s cover what exactly a credit score is and how you might end up without one. A credit score is a three-digit number that determines how likely you are to be granted a loan and with what terms.That number is generated from informat ion in credit reports maintained by the three major credit bureaus: TransUnion, Experian, and Equifax. Factors in your score include payment history, amounts owed, length of credit history, credit mix, and recent credit inquiries.But what if you never use credit? If you’ve never taken out a personal loan or used a credit card? Well, then you might not have a credit score at all. And where exactly does that leave you? Can you just go through life without borrowing any money whatsoever?Living well without credit is certainly possible.We’ll be straightforward here: Many things in life are much easier when you have a good credit score. But lacking a credit score doesn’t mean you’ll be forced to go live in the woods. You can theoretically live your life without having any credit to your name. In fact, we heard from someone who did just that!“Up until two years ago, I had zero credit,” recalled Mikhail Shvartsman, in-house counsel for USB Memory Direct (@usbmemorydirect). “I never opened a credit card, I bought pre-owned cars outright, and bought my house on foreclosure. You cant possibly live without credit unless you buy your own assets.”But as Shvartsman implied, you’re going to have to live your life in a very specific way if you’re hoping to get by without credit. He eventually found himself in a situation requiring a change of gears:“After finishing law school, I had $200,000 in student loan debt. So why did this change my need for credit? I had to lease out my apartment and find a place closer to work. Credit helps you manage when you pay for things. You still have to pay all of your debts, but this way you can do it over time.If you plan properly, and have a large enough salary, you can do this without the assistance of loans and credit cards. Regardless of my effort to do this, when it came time to rent an apartment closer to work, I knew I had to work on my credit.“With just a $200,000 debt posted for my student loans, it took me tw o years to create a credit history enough to score me over 600. For you to survive without credit, you have to manage your own finances by saving at least 10 percent of your income each year. However, if you are not making enough to make ends meet, that is not likely.The most important part is making sure 10 percent of your salary is enough to cover unforeseen costs. If you dont own your own house, this is unlikely. When leasing or renting anything, lack of creditworthiness will often deter anyone from renting to you.In this case, without credit, you would have to be able to pay your rent for a year up front. If you do, then you still shouldnt rent. You should use that money as a down-payment to own your property. In reality, the best practice is to build your credit, and not use it unless needed.”Want to skip credit scores? Then get comfortable using cash.Kalen Omo, of Omo Financial Coaching, gave us a slightly rosier idea of living without credit:“I believe people today can ab solutely live without a credit score. If mom and grandma could do it, why cant I? As long as cold hard cash is the primary mode of payment for goods and services, you can live without a credit score.”Omo went on to offer some common issues you might run into when living without credit and how you could handle them:“Buying a home: The best way to buy a home without a credit score is either through a process called manual underwriting, the way mom and grandma used to get mortgages, or the one hundred percent down plan (aka buy a house in cash).“Buying a car: If youre wanting to buy a car, the best way to do exactly that without a credit score is saving up your money over time and buying it with cash. Also, because you are a cash buyer, you are also in a better negotiating position with the dealership, as you have walkaway power, and are not held to a car loan or its interest rate.“Renting a car: The best option is to do your research and find a rental car company that takes a debit card instead of a credit card. You may need to have a deposit put on your checking account, but as long as you bring the car back in the shape you left it in, youll get that back.”So to sum it up, your life is going to look a lot like a cash-only venue.But if you do want to fix itAs we said above, life will be easier with good credit. Even  Shvartsman, who was doing really well with no credit history, eventually hit a point where he needed a decent credit score. But how can you go from no credit to good credit?One of the most reliable ways is to get a secured credit card. That’s a credit card that requires a cash collateral but is much easier to qualify for. Then you just have to use about one-third of your credit limit each month and pay your bill in full and on time.Heres something that WONT help your credit: Taking out a predatory payday loan or title loan. These are no credit check loans that almost always go unreported to the credit bureaus. (You should watch out for cash advance loans, too.) However, there are bad credit loans out there that  do  get reported to the credit bureaus, so keep your eye out for one of thoseâ€"especially if theyre installment loans.Life without credit isn’t impossible. But you’ll probably have an easier time if you start building up your credit now. To learn more about how you can improve your credit score, check out the rest of our Know Your Credit Score blog series:Credit ScoresPayment HistoryAmounts OwedLength of Credit HistoryTypes of Credit UsedRecent Credit InquiriesHave you or someone you know chosen to live without credit? We want to hear from you! You can find us  on  Facebook  and  Twitter.ContributorsKalen Omo is the founder and owner of  Omo Financial Coaching. Kalen has been in the world of personal finance since 2010 and has earned the title of Ramsey Solutions Master Financial Coach in 2017, after completing training with Ramsey Solutions, the company owned by National Best Selling Author and Finan cial Expert, Dave Ramsey. Kalen works with peoples personal finance issues and pain points ranging from budgeting to dealing with debt collectors to bankruptcy to estate planning to retirement. In his spare time, he enjoys spending time with his family, playing music, and is an avid musician.Since Mikhail  Shvartsman was a kid, he has loved fiddling with computers. Before law school, he worked in technology as a web developer, system administrator, and even worked in the realm of online marketing. He currently works as the general counsel of  USB Memory Direct (@usbmemorydirect). Navigating the law for an electronics wholesaler and manufacturer allows him to grow his knowledge in both technology and law.

Description of Major Figures of the Trojan War

Rebecca- Tell Tale Heart Comparative Essay - 842 Words

Rebecca and the Tell Tale Heart Comparative Essay Alfred Hitchcock successfully incorporates Gothic conventions within the film Rebecca, based on Daphne De Maurier’s novel written in 1938.Likewise, Edgar Allan Poe’s ability to incorporate Gothic themes within his short story ‘The Tell Tale Heart’, published in 1843, has been a success. Although both their abilities to create Gothic Compositions has been successful, their techniques used to incorporate Gothic conventions within them are both similar and different. Similarities arise when observing the Gothic theme of obsession in that both the texts obsession is explored to the point of madness. Alternatively, the techniques used to explore the Gothic theme of death and loss within†¦show more content†¦The literary technique of black humor is used within the statement Oh, you would of laughed to see how cunningly i thrust it in! I moved it slowly, very slowly, so that i might not disturb the old mans sleep; to express his ridiculous delight in mu rder, while plunging a weapon into the old man, but cringes at the idea of disturbing his sleep. After accomplishing murder the persona proclaims â€Å" I could scarcely contain my feelings of triumph†. The statements adequately describe the difference between the effects of incorporating the theme of death and loss within both death within both texts. In Rebecca death is dreaded and in â€Å"The Tell Tale Heart† death is yearned for. After analyzing two Gothic themes successfully conveyed within the film Rebecca and the short story â€Å"The Tell Tale Heart† it can be concluded that the two texts share similarities and differences within the film/ literary techniques used and their effect. They are similar in that both texts explore the theme of obsession to the point of madness; and they are different in that their attitude towards death is completelyShow MoreRelatedThe House of the Seven Gables by Nathaniel Hawthorne Essay6806 Words   |  28 PagesClifford has long since forgotten the secret. One day , Judge Jaffrey comes again, looking for Clifford. He manages to force Hepzibah to let him see her brother and she goes up to fetch him. He is not in his room and when she comes back to tell the judge, she finds him dead. And Clifford is standing beside him. Afraid that he would be accused of murder again, Clifford flees, bringing Hepzibah along. In their absence, Holgrave and Phoebe fall in love. Eventually, it was discoveredRead MoreThe Studio System Essay14396 Words   |  58 PagesWasserman of Universal Studios emerged as the key innovator in creating a second studio system. 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The American Express Card Free Essays

9-509-027 REV: APRIL 22, 2011 JOHN A. QUELCH JACQUIE LABATT The American Express Card Marketing is fully integrated into our overall strategy. Our largest investor, Warren Buffett, is very focused on brand health and customer metrics. We will write a custom essay sample on The American Express Card or any similar topic only for you Order Now — Kenneth I. Chenault In April 2008, Jud Linville, president and chief executive officer of U. S. Consumer Services at American Express Company, was preparing for a meeting with Ken Chenault, American Express’s chairman and chief executive officer since 2001, and Al Kelly, president of American Express Company. The purpose of the meeting was to discuss further growth prospects in the United States for the American Express consumer card business while maintaining the brand’s premium positioning. The performance of the American Express card, launched 50 years earlier in 1958, had been remarkable. By 2008, there were 52 million American Express cards in circulation in the U. S. , held by 41 million â€Å"cardmembers† (see Exhibit 1). American Express commanded nearly a 24% share of U. S. credit card payments. 1 As Linville prepared for the meeting, he wondered whether he could continue to rely on the same business growth drivers that had served American Express well in the past. With the U. S. economy slipping into recession, the proliferation of cards in the market required American Express to deepen its consumer understanding to provide innovative, value-added products that would attract and retain cardmembers. Company Background The American Express Company was a leading global payments and travel company with revenue net of interest expense of $27. 7 billion in 2007, up 10% from 2006. American Express’s principal products and services included charge and credit card payment products and travel-related services offered to consumers and businesses around the world. American Express was the world’s largest issuer of charge and credit cards as measured by the annual value of purchases charged on these cards. 3 Yet American Express maintained a â€Å"best-in-class† credi t quality, reflecting in part the company’s traditional focus on the affluent segment, its expertise in evaluating the credit risk of individual consumers, and its ongoing commitment to investing in risk capabilities. In 2007, around 70% of American Express’s revenue net of interest expense and 85% of its pretax income from continuing operations5 was generated in the United States. The global diversity of the business included 86 million cards in force worldwide, more than 115 card-issuing or merchant-acquiring ________________________________________________________________________________________________________________ Professor John A. Quelch and Research Associate Jacquie Labatt prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright  © 2008, 2011 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-5457685, write Harvard Business School Publishing, Boston, MA 02163, or go to www. hbsp. harvard. edu/educators. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School.. This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN 509-027 The American Express Card arrangements with banks and other institutions, and over 650 American Express network branded products. 6 Fortune magazine ranked American Express the â€Å"Most Admired† megabank/credit card company in its 2008 annual survey. 7 American Express’s roots date back to 1850, when Henry Wells, William Fargo, and John Butterfield founded an express delivery company. The very nature of handling and transporting customers’ assets depended on security and trust, core attributes that had remained at the heart of the company and brand. In the late 1800s, American Express introduced financial products such as money orders and Travelers Cheques. The company later expanded into the travel business to further support its Travelers Cheques customers who were increasingly going abroad. The First Card The first American Express card targeting the business traveler was launched in 1958. The decision to enter this new business â€Å"faced strong opposition within the company with senior leaders evenly divided on the issue. 8 The debate began when the Diners Club card was introduced in 1950. American Express recognized the card as a potential threat to the company as consumers began using this card as a substitute for Travelers Cheques. 9 Some argued that a charge card would cannibalize the Travelers Cheque business, while others believed competing car ds would hurt those sales regardless. There was further concern that launching a card would upset the American Automobile Association (AAA), one of American Express’s largest distributors of Travelers Cheques. At the same time, AAA was known to be considering launching a card of its own. Finally, with the economy in recession, many executives argued that it was a risky time to be launching a charge card. Nevertheless, in December 1957, American Express president Ralph Reed decided to launch such a card without further delay, stating at the time: â€Å"All we have to sell is service. † When word of the card’s imminent launch leaked, the company was inundated with calls from potential applicants. Further, the American Hotel Association approached American Express regarding forming an alliance, which gave the company an immediate customer base of 150,000 cardmembers and 4,500 participating merchants. 0 By the official launch date of October 1, 1958, American Express had already issued 250,000 cards at an annual fee of $6 each, $1 higher than the fee for a Diners Club card. The first American Express card11 was targeted at businessmen on expense accounts, offering them a convenient method of payment rather than a means of financing purchases. This American Express card was a charge card that required the user to pay off the balance monthly. It was not a credit card that offered the user the option of paying interest on the balance as if it were a cash loan. The Gold (1966), Corporate (1966), and Platinum (1984) cards followed despite concerns over cannibalizing the original American Express card. This hierarchy of cards with progressively higher annual fees and services offered business travelers the aspirational prospect of being invited to move up from Green to Gold to Platinum. (In 1999, American Express added an unadvertised, byinvitation-only product, the black Centurion card. Equipped with VIP benefits such as a personal concierge, the Centurion card was offered by invitation only to a small, elite group of Platinum card customers. Celebrities and the very rich clamored for the right to carry this new card. ) American Express launched its first credit card, Optima, in 1987. The Optima card was the first American Express card to allow customers to carry a balance and pay interest. It was marketed only as a â€Å"companion† card to existing American Express cardmembers. A downturn in the economy in 1991 resulted in unexpected losses as some Optima customers failed to make their payments. As a result, American Express deferred plans to expand its credit card business and tightened its existing 2 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN The American Express Card 509-027 credit modeling programs and controls. In addition, American Express â€Å"card suppression,† whereby merchants tried to dissuade consumers from using their American Express card, began with the 1991 â€Å"Boston Fee Party. † Boston estaurateurs were upset with what they viewed as American Express’s excessive discount rate, the percentage fee American Express charged merchants on consumer purchases made with American Express cards. This practice of not honoring the American Express card gained momentum and discouraged some consumers from using their American Express cards. Scale was viewed as a key competitive success factor in the payments in dustry; American Express considered its 16%—and falling—market share of the U. S. payments market in the early 1990s too low. With too few cards in circulation and too few merchants accepting the American Express card, American Express management faced a â€Å"chicken and egg† dilemma in trying to determine which aspect of the problem to address first. Turnaround Harvey Golub’s appointment as chairman and chief executive officer in 1993 set the stage for restoring health to the American Express business and brand. Golub became the â€Å"vocal guardian† of the American Express brand as he outlined his vision for the company: â€Å"To become the world’s most respected service brand. 12 American Express’s purpose was to manage, market, and promote the core attributes of the American Express brand, â€Å"trust, security, integrity, quality and customer service,† through educating employees, incorporating these attributes into card products and services, and reflecting them in all marketing communications. Future chief executive officer Ken Chenault, who was then runnin g the card business, laid down three guiding principles: to provide superior value to customers, to achieve best-in-class economics, and to direct all activities to support the American Express brand. In addition, Golub established long-term goals as the guiding metrics for the business: earnings per share growth of 12%–15% per year, revenue growth of at least 8% per year, and return on equity of 18%–20% on average over time. With a business strategy built on the company’s brand, Golub refocused American Express on the card business. Starting in 1981, American Express had purchased brokerage and financial advisory firms in an effort to become a â€Å"financial supermarket. † This strategy proved to be a distraction. By 1993, Golub had divested American Express of most of its non-core businesses. Concurrently, the U. S. card business underwent a significant review under the leadership of Chenault. He identified three issues: Costs were too high compared to American Express’s most efficient competitors; the division was too slow to change and adapt, particularly in introducing new products; and the organization was not sufficiently flexible to meet the needs of specific, more targeted consumer segments. 13 By 1995, signs of a turnaround were evident in the American Express card business. New card products began to appear with increased frequency, including proprietary and co-branded cards. A co-branding strategy was initially opposed by branding purists who argued that the American Express brand was too precious to be shared with a partner. This had led American Express to turn down an opportunity to co-brand air-miles-earning AAdvantage credit cards with American Airlines in the mid-1980s. The company came to regret this decision as American Airlines and, later, United Airlines both launched co-branded cards with Visa and MasterCard. The launches of the co-branded Hilton Optima card (1995) and the Delta SkyMiles American Express card (1996) marked the company’s new willingness to partner with other strong brands. In future years, agreements were also struck with Costco, Starwood, and JetBlue. In 1996, Golub decided to open the American Express network and invited other banks and institutions to issue cards on its network. Doing business with other card issuers that were often competitors was a significant shift for the company. But, by carefully choosing the right partners who 3 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN 509-027 The American Express Card would tailor American Express products for their high-spending customers, the company could efficiently supplement its own efforts to grow the number of cards-in-force, cardmember spending, and merchant acceptance. The Global Network Services (GNS) division was formed in 1997 to build these relationships. By 2007, there were more than 750 different American Express cards (including cards co-branded with merchants and banks) available around the world. Exhibit 2 lists the principal American Express card offerings and features in the United States as of 2008. In evaluating prospective product offerings, Linville asked whether the company was, first, â€Å"removing friction† from the system— making everyday life easier in some way for consumers such as with a â€Å"contactless† card—and, second, â€Å"providing special recognition,† or badge value, to cardmembers. Linville sought to make the American Express brand available more broadly while ensuring that it retained its premium status. Organization As of 2007, the company was organized into two major customer groups: Global Consumer Services and Global Business-to-Business Services. The Global Consumer group contributed 67% of the company’s revenues net of interest expense and 52% of its income from continuing operations. 14 Its range of products and services included charge and credit card products for consumers and small businesses worldwide, consumer travel services, and prepaid, stored value products such as Travelers Cheques and Gift Cards. Business-to-Business Services contributed 29% and 38%, respectively, to the company’s revenue and income, and offered business travel, corporate cards, expense management products and services, network services, and merchant acquisition and processing for the company’s network partners and proprietary payments businesses. (See Exhibit 3 for a breakdown of company revenues by operating group and division, and see Exhibit 4 for income statement data on the company’s U. S. card business. ) U. S. Payments Industry Payment Systems American Express competed against all forms of payments for consumer purchases, a market that exceeded $7 trillion in the U. S. in 2008. 15 Payments could be divided into three broad categories: paper-based payments (checks, cash, money orders, official checks, Travelers Cheques); card-based payments (credit, debit, prepaid, electronic benefits transfer); and electronic-based payments (preauthorized and remote). Consumers were shifting from paper-based payments toward cards and electronic methods (see Table A). Converting even a small portion of the paper market to American Express payments represented a big opportunity. Many of these transactions were cash/check-based because either they were low-value transactions (at mom-and-pop stores) or high-value captive transactions where there was little incentive for the merchant (for example, a utility company or apartment landlord) to accept charge/credit cards and absorb the discount fees charged for the service. American Express estimated that around 25% of the cash/check segment represented high-value transactions such as car purchases, tuition fees, and rent/mortgage payments. This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN The American Express Card 509-027 Credit and Debit Credit cards held a leadership 26% share of the payments market and had grown 45% in dollar terms since the year 2001. Debit cards, which were issued by banks and allowed a purchase payment to be deducted immediately from the cardholder’s bank account, held a 14% share of the payments market and had grown 162% over this same period. Since American Express was not a bank, it did not offer debit cards. The average purchase per debit card in the U. S. was $39 compared to $87 per credit card purchase. 16 While debit card transactions were projected to exceed credit card transactions by 2011, the average purchase per credit card transaction was expected to remain higher. 17 Table A U. S. Consumer Purchases by Payment Type—2006 Method of Payment Paper Checks Cash Other $3,365 1807 1439 119 Cards Credit Cards Debit Cards Other Source: % Change Versus Previous Five Years Market Share -4 % -19 +23 -3 47% 25 20 2 3,048 1,871 ,010 167 +77 +45 +162 +209 43 26 14 3 751 443 307 +177 +136 +270 10 6 4 7,165 Electronic Preauthorized Remote Total Consumer Purchases (billions) +30 100 Adapted from The Nilson Report, Issue 890, October 2007. The average American adult carried 4. 4 payment cards in his/her wallet, be they debit, credit, and/or charge cards. 18 Competitors in the card payments business were either card network s that processed transactions (Visa, MasterCard), card issuers (primarily banks), or organizations that both issued cards and processed transactions (American Express, Discover Financial Services). Charge cards for specific retail chains were declining in importance. American Express aimed to increase its â€Å"share of wallet† by making American Express the payment card of choice for all transactions. This was especially important, as recent evidence showed the average number of cards per wallet falling rather than increasing; 20% of consumers shed payment products in 2007 versus 16% in 2004. 19 Further, only 31% of consumers were adding new payment products to their wallets, a drop from 56% three years earlier. 0 Many American consumers â€Å"compartmentalized† their spending, using different cards for different types of payments. For example, some long-standing American Express members still used the American Express card just for travel and entertainment, and used a Visa or MasterCard credit card for other purchases. 5 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to Decembe r 2012. For the exclusive use of Y. SUN 509-027 The American Express Card Competitive Card Networks Payment networks operated under two business models. â€Å"Open-loop† payment networks, as employed by Visa and MasterCard, were multiparty. Processing a payment typically involved connecting two financial institutions: one that issued the card (issuer) and one that serviced the merchant (acquirer). The open-loop network managed the information and transfer of value between the two banks. In a â€Å"closed-loop† network, as used by American Express and Discover, the network â€Å"owned† the relationship with both the cardholder and the merchant. Leading payment networks are listed in Table B. Credit Card Networks—U. S. Market Share 2007 Table B Share of Credit Card Purchases Visa MasterCard American Express Discover Source: Share of Credit Card Transactions 42. 2% 28. 7 23. 8 5. 3 43. 8% 30. 5 18. 3 7. 4 Adapted from The Nilson Report, Issue 889, 2007. Visa, Inc. Visa operated the world’s largest retail electronics open-loop payment network. Visa provided financial institutions, their primary customers, with product platforms, including consumer credit, debit, prepaid, and commercial payments (see Table C). Visa operated a data-processing network that transferred transaction data and managed payment flow between issuers and acquirers. Visa generated revenue primarily from financial institutions based on fees calculated on the dollar volume of payment activity on Visa-branded cards (service fees) and from fees charged for providing transaction processing (data-processing fees). In 2007, Visa USA generated 82% of its gross operating revenue from service and processing fees combined. 21 U. S. Results for Visa, Inc. , Annual Product Performance (June 30, 2007) Table C Payment Type Consumer Credit Consumer Debit Commercial and Other Total Payments Volume Cash Volumea Total Volume Total Transactions (in millions) Source: Payment Volume (billions) Share of Payment Volume by Payment Type $ 624 637 188 34% 35 10 1,449 79 382 1,831 21 100% 25,942 Adapted from Visa, Inc. , Form 10-K, December 2007. a Cash volume includes cash access transactions, balance transfers, and convenience check transactions associated with Visa. 6 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN The American Express Card 509-027 Visa went public on March 18, 2008, raising $19 billion in the world’s second-largest initial public offering (IPO). 22 The IPO created a cultural and business challenge: Visa had to shift its focus from delivering benefits to its partner banks toward maximizing profits for long-term shareholder value. 23 As stated in Visa’s 10-K report, â€Å"Many of our employees have limited experience operating in a profit-maximizing business environment. †24 Further, the proceeds of the IPO bought out the interests of the partner banks. As a result, the banks were no longer Visa’s partners and co-owners but were now Visa’s customers. MasterCard MasterCard (MC), which successfully went public in 2006, was a global payment solutions company that was similar to Visa’s open-loop network. MC’s primary sources of revenue were transaction service fees, data-processing fees, and assessments on gross dollar use (purchases, cash disbursements, balance transfers) of MC-based cards. In 2007, transaction fees and assessments represented approximately 74% and 26%, respectively, of the company’s net revenues. 5 Discover Financial Services Discover Financial Services (DFS) was the consumer credit and financial services division of Morgan Stanley until it was spun off to shareholders as an independent closed-loop payments network company in July 2007. Founded in 1986, DFS was the only issuer whose wholly-owned network operations included both debit and credit card capability. 26 DFS also offered a range of banking products, such as personal and student loans, certificates of deposit, and money market accounts. DFS’s primary source of revenue in its U. S. ard business was interest income earned on revolving cardmember balances. Other sources of revenue included late-payment, over-the-limit, and merchant discount fees. Like American Express, the company offered a rewards program to cardholders; under the Discover program, card users earned a cash-back discount on the value of their transactions. Competitive Card Issuers Competitive card issuers (largely banks) issued credit and debit cards, predominantly under the Visa and MasterCard brands, and were responsible for the pricing, positioning, and marketing of their co-branded cards. The top three banks accounted for more than 60% of outstanding bank-issued credit card purchases, as indicated in Table D. Card issuers competed on the basis of card features and quality of service, including rewards, number of cards issued and quality of users’ credit and spending, number of establishments accepting the card, success of target marketing and promotional campaigns, and the ability of the issuer to manage credit and interest rate risks through economic cycles. The primary revenue source for bank issuers was interest income earned on outstanding credit card balances. They acquired new cardholders by cross-selling cards to the customers of their retail branch networks and, increasingly, targeted high-spending consumers, offering premium cards with enhanced services such as larger lines of credit, cash rebates, lower interest rates, and co-brand benefits with airline frequent-flyer programs. 7 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN 509-027 The American Express Card Table D U. S. Credit Card Volumes by Card Issuer in 2007 Volume of Purchases billions) American Expressa JP Morgan Chase Bank of America Citigroup Capital One Discovera U. S. Bank HSBC Wells Fargo GE Money Other Sources: $459 317 263 222 106 90 65 41 37 27 87 Adapted from The Nilson Report, Issue 896, February 2008, except for American Express (American Express Annual Report 2007). a Do not include third-party business. Emerging Payment Networks New entrants offering nontraditional, convenient, technology-based payment methods were growing in number and importance. It was estimated that credit and debit cards generated approximately $200 billion in purchase volume from online bill payments in 2006. 7 New payment methods included online â€Å"aggregator† networks, such as PayPal and Google Checkout, and telecom providers that leveraged new technologies and customers’ existing charge and credit card relationships to create mobile payment solutions where the plastic card would not need to be presented to the merchant. PayPal used encryption software to allow consumers to make financial transfers between computers. 28 Similarly, Google Checkout, which accepted and processed existing payment methods such as American Express, Visa, and MasterCard, aimed to offer buyers a fast, safe, and convenient purchase experience. American Express Card Business Model The American Express â€Å"spend-centric† business model (see Exhibit 4) depended on increased cardmember spending. American Express’s primary source of income was â€Å"discount revenue,† revenue earned from fees charged to merchants for processing purchases made using an American Express card. The fee charged represented a percentage of the dollar value of these transactions. In 2007, discount revenue and card fees accounted for more than 70% of U. S. Card Services’ revenue net of interest expense (see Exhibit 5). The average American Express cardmember charged more each year than the average Visa or MasterCard credit card user. In 2007, the annual average purchase volume per American Express card of $8,360 in the U. S. was substantially higher than that for Visa ($2,470/card) or MasterCard ($1,960/card). 29 By accepting American Express cards, merchants benefited from attracting as patrons the higher-spending American Express consumer. As a result, American Express could justify a premium discount rate from merchants over its competitors. American Express invested this price premium in information systems that studied the purchase habits and inclinations of cardmembers. These insights led to the development of targeted 8 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN The American Express Card 509-027 promotions, connecting merchants with interested American Express cardmembers who were in turn motivated to spend even more on their American Express cards. In this way, the spend-centric model became a virtuous cycle, benefiting cardmember, merchant, and company alike. From the outset, American Express targeted the affluent, high-spending consumer. â€Å"High-wallet† consumers were defined by American Express in 2007 as those who spent more than $30,000 annually using cards. Affluent consumers represented roughly 10% of card users but accounted for half of U. S. charge/credit card consumer spending. 30 American Express’s target consumer typically liked to travel, liked to be different, and liked special access to exclusive experiences. For many years the American Express consumer skewed slightly toward affluent, older men, a reflection of the company’s early targeting of the male business traveler. The company had successfully increased American Express brand penetration of affluent younger and female consumers. Unlike its transaction-oriented competitors, Visa and MasterCard, the American Express card always emphasized an aspirational lifestyle. An early example was the 1985 launch of Departures magazine for Platinum cardmembers who were active, affluent consumers. The Departures editor defined luxury not as status and privilege but in terms of quality and authenticity. Membership in a Lifestyle From the outset, American Express executives emphasized that the company sold not just a card but a relationship. The relationship involved a â€Å"membership† in which the company committed to providing the member with the following: Access (premium and exclusive access and enhanced experiences for cardmembers), Advocacy (in merchant disputes, for example), Accountability (privacy of information, fairness in billing), and Affiliation (a sense of belonging to a community). Every American Express charge card included the â€Å"Member Since† designation on the front followed by the year the consumer became an American Express cardmember. To underscore the membership status of American Express consumers, the company in 1991 launched the Membership Miles program to motivate customer sign-ups, customer retention, and more frequent card usage. At launch, the Membership Miles program gave cardmembers one point for every dollar charged on the card and the ability to redeem points with seven airlines. The program was renamed Membership Rewards (MR) in 1995. Spending on American Express cards linked to MR averaged four times higher than that on cards without rewards activity. 31 Seventy percent of cardmembers used the MR program. Cardmembers enrolled in the program were found to be lower credit risks as well as more profitable. 32 The company’s â€Å"data-mining† capabilities helped shape the MR program into an industry-leading loyalty program. For these reasons, American Express’s marketing spending on MR had grown at a compound annual growth rate of 24% since 2001, compared to an average 12% increase in marketing and promotion spending. 33 The MR program in the U. S. had more than 160 redemption partners34 and featured 29 airlines among its 250 merchandise brands. Analytics not only helped to determine whom to reach and with what offer, but also how rewards influenced loyalty. In 2005, the MR analytics team analyzed which members were more likely to redeem, in which categories, how many points they would redeem, and at what cost to the company. This research enabled American Express to craft a more appealing mix of reward offers, to predict more accurately the volume of demand for particular offers, and to negotiate better deals with suppliers. Innovations such as â€Å"First Collection,† a luxury tier exclusively for U. S. Platinum and Centurion cardmembers that included redemption partners such as Tiffany and Lamborghini, and â€Å"Bonus Points Mall,† an online gateway to more than 100 retailers, were 9 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN 509-027 The American Express Card examples of how American Express increasingly tried to match the nature and the level of rewards to what its members sought and expected. Data-Based Marketing As a card issuer and network provider, American Express had direct relationships with both its cardmembers and its merchants. â€Å"Data-based marketing† became a competitive advantage at American Express. Analyses of cardmember purchases enabled American Express to develop offers that boosted spending with particular groups of merchants. Open-loop competitors Visa and MasterCard could not match American Express’s data-driven capabilities because they controlled access to either the cardholder or the merchant data, not both. The purpose of data-based marketing was to develop insights and offers that would match members’ interests, drive charge volume, and increase loyalty to American Express. 35 The company did not use individual consumer data for marketing purposes but rather clustered cardholders into segments based on personal, financial, and lifestyle characteristics evident in the patterns of their transactions. Cardmember clusters might have greater than average spending in, for example, entertainment, dining, home, fashion, electronics, or automobiles. Cardmembers whose spending showed them to be more â€Å"passionate† about their homes might then receive offers from local homeimprovement retailers. The company also researched correlations across spending categories to identify potential partnerships. For example, research indicated that affluent consumers who owned at least one luxury automobile brand had a strong affinity not only to other luxury brands but also to consumer electronics brands, an above-average tendency to engage in skiing and antiquing, and a strong likelihood of owning a second, more practical vehicle. Data mining also enabled American Express executives to predict how spending behavior evolved through various â€Å"life stages† and increasing levels of affluence. For example, the company’s predictive model indicated that non-affluent cardmembers who made a single luxury purchase, such as a first-class airline ticket, were three times as likely to become affluent. Card upgrade offers distributed following a cardmember’s first luxury charge purchase resulted in response rates over 50% above normal. 36 Emerging Challenges By 2005, competitors had begun to imitate American Express’s lifestyle platform with premium product offerings (e. g. , Visa Signature, MasterCard World Elite), exclusive experiential rewards (e. g. , MasterCard’s Unique Experiences program), and lifestyle advertising. Visa’s â€Å"Life Takes Visa† advertising campaign emphasized the â€Å"brand’s promise to deliver innovative products and services that empower cardholders to experience life and business their way and on their terms. †37 The quality of a card’s rewards program was increasingly important to higher-spending consumers. No longer did they evaluate rewards programs just on ease of earning and redeeming points. The variety and frequency of unique rewards (such as backstage access at a concert) were more and more critical. American Express had an edge over Visa and MasterCard owing to its cumulative expertise in arranging special events, but bidding wars for such opportunities were increasingly common. While continuing to emphasize relationship and lifestyle over transaction, American Express had to broaden its merchant network to maintain its share of consumer spending. In 1990, 64% of 10 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN The American Express Card 509-027 American Express U. S. billings came from the travel and entertainment (TE) sectors and 36% came from retail and other sectors. 38 This reflected the company’s belief that spending could be segmented into â€Å"business† and â€Å"personal. † American Express’s focus on TE concerned Chenault and Kelly. They believed that, in the interests of scale, American Express had to expand its presence in the â€Å"everyday† retail market. This change in strategy was opposed initially, partly because it would necessitate launching more new products and, in the eyes of some traditionalists, weaken the brand. However, by 2007 the sources of cardmember spending had more than reversed, with everyday retail spending representing more than 69% of U. S. American Express card billings. 39 Marketing Communications Advertising Campaigns American Express had a long history of successful, distinctive advertising that consistently stressed prestige, inviting consumers to join an exclusive club of cardmembers. One of the first TV campaigns, â€Å"For People Who Travel† (1969–1974), demonstrated how the American Express card is â€Å"All You Need† for your travel and entertainment needs. This was replaced by the â€Å"Do You Know Me? † campaign, which that ran for more than a decade, produced 125 commercials, and marked the beginning of the company’s strategy of using famous American Express â€Å"members† to sell cards to consumers. Do You Know Me? † used a variety of celebrities to highlight the special treatment and recognition cardmembers enjoy, the premise being that people with famous names don’t always have equally famous faces; anyone who carried an American Express card would be immediately identified as someone of note. In 1987, American Express premiered t he â€Å"Membership Has Its Privileges† campaign, which highlighted the company’s superior service and showed how the card â€Å"not only facilitated the variety and enjoyment of a cardmember’s lifestyle, but that membership is also invaluable when emergencies arise. 40 To complement this television campaign, the â€Å"Portraits† print campaign was launched. Portraits underscored the message that â€Å"superior customer service, security, and convenience† were important American Express qualities that cardmembers relied on. Shot by celebrity photographer Annie Leibovitz, â€Å"Portraits† focused on a unique group of high-profile cardmembers. The company’s first global advertising campaign, â€Å"Do More,† was launched in 1996 and emphasized brand attributes such as trust, customer focus, travel relevance, and financial insight. A variety of â€Å"product† commercials highlighted individual card benefits such as no preset spending, purchase protection, and global assist, while talent-driven â€Å"stories,† such as Tiger Woods’s â€Å"Manhattan† commercial in which he plays the world’s toughest â€Å"island† course—Manhattan—were intended to drive emotional relevance. In an effort to encourage everyday usage of the card, the â€Å"Do More† campaign introduced a series of ads showing comedian Jerry Seinfeld using the American Express Card in supermarkets and drugstores. In 2004, a new global campaign with the tagline â€Å"My Life. My Card. featured snapshots of the lives of celebrities, including Robert DeNiro, Tiger Woods, and Ellen DeGeneres. The campaign portrayed American Express cardmembers as exceptional people no matter where they lived or what they did. The campaign was also the first to support both American Express’s proprietary and network businesses. John Hayes, American Express’s chief marketing officer, believed that the company’s history of tastefully portraying the rich and famous had provided it with an edge in attracting A-list talent. DeGeneres purportedly pointed to Seinfeld’s ads before signing on to do her own. 1 11 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN 509-027 The American Express Card American Express launched its most recent campaign, â€Å"Are You A Cardmember? ,† in 2007. Hayes explained: â€Å"The new campaign continues the tradition of defining the value of belonging to the American Express community by showcasing some of our most exceptional cardmembers and the ways in which membership works for them. But our latest campaign not only reaffirms for existing members why they belong, it also calls on nonmembers to consider becoming a cardmember. †42 See Exhibit 6 for a summary of American Express’s U. S. card advertising campaigns. Expenditures The company’s mix of marketing spending had changed to reflect the growing importance of targeted communication over mass mailings and the emergence of the digital world. Over time, spending on direct mail, while still large, had decreased along with spending on television advertising. Event/experiential marketing and Internet spending had both grown. American Express used direct marketing both to acquire new customers and to motivate existing members to upgrade. Traditionally, American Express sought new customer applications from outbound telemarketing, â€Å"Take Ones† (applications placed in restaurants and other retail establishments), and direct-mail efforts. By 2008, only 40% of successful new applicants still came from direct-mail solicitations and response rates had slipped well below 1%. By contrast, a significant portion of applications came from new channels such as the Internet, co-branded partner channels, and consumer-initiated phone calls to American Express customer service. The American Express website had become one of the company’s largest sources of new member applications. It allowed the company to leverage its datamining expertise to provide real-time consumer rewards and offers. The Web simplified the card selection/application process by guiding the applicant through card choices. Based on the applicant’s stated card feature priorities (fees, rewards, payment terms), the American Express website provided card product comparisons and recommended the most appropriate card options from American Express’s portfolio. The growing importance of the digital world was reflected in the company’s shift in media spending, as shown in Table E. American Express Company—U. S. Card Media Spending Table E Share of Media Spend 2003 Media Type Online Share of Media Spend 2007 7% Television 19% 48 57 14 10 Print 23 13 Radio 2 Non Traditional Source: Mediaa Company records. a Non Traditional Media includes billboards, transit, cinema, and other out-of-home media Investing in the website reduced American Express’s costs and built brand presence and prestige. By 2008, 38% of American Express applications, payments, and reward redemptions had migrated to the Web at cost rates 53%, 84%, and 86% lower, respectively, than offline. 43 The Internet allow ed the company to attract new customers faster (one application every eight seconds) and more 12 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN The American Express Card 509-027 economically. The website, serving as a virtual service center around the clock, increased the frequency with which the company was in contact with its customers, making it a powerful marketing channel. Claiming the americanexpress. com site â€Å"gets more traffic than the Wall Street Journal online,† the company noted that its members used the Web primarily for checking statements and cashing in rewards. With more than 50% of American Express payments left to migrate online, upside opportunity existed for further cost savings and deeper relationships with customers. Bank and Merchant Partners As of 2008, American Express obtained customers in two ways: through direct company solicitations and communications that resulted in consumers being issued proprietary American Express cards; and through third-party financial institutions that solicited their customers to sign up for American Express cards through them, a business managed by the company’s Global Network Services (GNS) division. Bank Partners American Express’s GNS business was set up in 1997 to build partnerships with banks and other institutions to issue American Express–branded products. GNS products were designed to help issuers develop products for their highest-spending, most affluent customers and to support the value of American Express card acceptance with merchants. GNS enabled American Express to broaden its cardmember base internationally at relatively low cost. By 2008, GNS had over 120 partners in more than 125 markets and accounted for nearly 25% of American Express’s overall cardsin-force. American Express particularly wanted to help each bank design card products for their highspending, affluent private banking clientele, and to benefit from new distribution channels that included each bank’s website, direct-mail capabilities, and retail branch network. For their part, the banks were interested in partnering with American Express because of its superior marketing expertise as a card issuer and the higher-spending profile of American Express cardmembers. Merchants stood to benefit from more American Express cards in circulation. For American Express, expanding the GNS business required little capital; the banks owned the receivables and therefore absorbed the consumer credit risk. While consumers could choose between American Express proprietary cards and those issued under GNS partnerships, cannibalization of direct sales appeared to be minimal. While GNS began building a healthy international business, it was effectively barred from doing business in the U. S. by Visa and MasterCard’s policies preventing their U. S. member banks from issuing other card brands. In 1998, the U. S. Department of Justice filed suit against Visa, MasterCard, and eight of their member banks, charging anticompetitive practices. The suit charged that Visa and MasterCard prohibited their U. S. partner banks from issuing American Express–branded cards on the American Express network. Discover cards were affected similarly. The legal battle was resolved in 2004 when the U. S. Supreme Court let stand a court ruling that Visa and MasterCard had violated antitrust laws. Visa settled for $2. 25 billion. MasterCard later settled for $1. 5 billion. American Express soon signed Network Card License Arrangements (NCLs) to issue American Express–branded cards with seven leading U. S. banks. MBNA was the first, followed by Citibank, Barclaycard U. S. , USAA, GE Money, HSBC, and Bank of America. Though the banks were licensed to issue American Express–branded cards, American Express owned the relationships with merchants. 13 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN 509-027 The American Express Card This meant that GNS earned discount revenue from both the bank issuer and the merchant acquirer, a sum that represented roughly one-third of total GNS revenues. This design feature underscored the importance of the continued focus on the high-spend segment. American Express developed strong account-management teams to manage the relationships with these major banks. Two major banks that had not yet signed on to issue American Express cards were JP Morgan Chase and Capital One. Merchant Partners In addition to U. S. anks, American Express depended on relationships with merchant partners, seeking always to expand its merchant coverage. These relationships were managed by the Merchant Services Group. Despite American Express’s premium discount rate, American Express believed that merchant coverage was not a function of price alone; if it were, Kmart and Walmart, for example, would not have chosen to accept American Express. Further, the Disco ver card discount rate was less than American Express’s yet Discover had a much lower merchant penetration. (See Table F for fees paid in 2005 by U. S. erchants to accept card payments. ) American Express account managers and third-party sales organizations aimed to convince merchants of two benefits to offset American Express’s higher discount rate: that American Express cardmembers would spend more with them than with competitive cardholders and that American Express data mining could target promotional offers that would drive business their way. To persuade reluctant merchants to sign up, the Merchant Services Group might target members who were likely shoppers at a new merchant with double points promotions for an inaugural period. Since 2000, American Express increased merchant acceptance of its cards in many categories, especially quick-serve restaurants, mass transit, and health care. American Express card acceptance also increased in industries where cash, checks, or bank transfers were the predominant forms of payment, including apartment rentals, private jet travel, and destination clubs. By 2008, the American Express card was accepted at millions of merchants in the U. S.. Management estimated that U. S. ocations where the American Express card was accepted covered more than 90% of American Express cardmembers’ general-purpose charge and credit card spending. 44 Table F Fees Paid by U. S. Merchants to Accept Card Payments—2005 Payment Card Brand Visa/MasterCard Credit Cards Visa/MasterCard Debit Cards American Express Discover Source: Fees Paid (billions) Weighted Averagea $25. 13 9. 76 8. 51 1. 46 2. 19% 1. 75 2. 41 1. 76 Adapted from The Nilson Report, Number 862, August 2006. a Fees vary according to merchant category, volume, and type of card. Conclusion By the spring of 2008, American Express was strategically focused on the payments and travel businesses, having sold off the last of its banking interests. Michael O’Neill, senior vice president of corporate affairs and communications, explained this transformation: â€Å"We narrowed the business and broadened the brand. † Warren Buffett, who was the company’s largest shareholder, described 14 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN The American Express Card 509-027 American Express’s â€Å"powerful world-wide brand† as â€Å"an enduring moat that protects excellent returns on invested capital†45 and Chenault as one of the â€Å"giant-company managers whom I greatly admire. †46 In March 2008, Barron’s named Chenault as one of â€Å"The World’s Best CEOs† for having â€Å"positioned American Express well to withstand turbulence. He hasn’t compromised credit standards to gain new cardholders, nor has he cut back on marketing spending to prop up earnings. His loss rates on cards remain among the industry’s best. †47 In the second half of 2007, a U. S. housing downturn and credit crunch slowed U. S. economic growth. American Express issued a profit warning in early 2008. Chenault explained that the slowdown in cardmember spending that had come on suddenly in December 2007 was broad-based and was expected to continue into 2008. â€Å"Now we’ve been through slowing economies before, but none of us can recall such a dramatic drop over such a short time frame, except for the event-driven decline of 9/11. †48 Past-due loans and write-offs also rose, especially in parts of the U. S. that had experienced a housing price bubble. However, superior risk management and credit controls at American Express meant that it was less affected than competitors. 9 It was in this context that Jud Linville prepared for his meeting with Ken Chenault and Al Kelly. How could the American Express consumer card business continue its growth while maintaining the company’s premium positioning? Were there opportunities for his organization to serve U. S. consumers and merchants in new ways while continui ng to turn in the profits that shareholders had come to expect? 15 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN 509-027 The American Express Card Exhibit 1 American Express Card Business Statistics: 2006–2007 Years Ended December 31 (billions, except percentages and where indicated) 2007 2006 Card billed businessa United States Outside the United States $459. 3 188. 0 $406. 8 154. 7 $647. 3 $561. 5 52. 3 34. 1 48. 1 29. 9 86. 4 78. 0 40. 9 29. 2 37. 1 25. 4 70. 1 62. 5 Total b Total cards-in-force (millions) United States Outside the United States Total Basic cards-in-force (millions) b United States Outside the United States Total Average discount ratec Average basic cardmember spending (dollars)d Average fee per card (dollars) d Source: 2. 56% $12,106 32 2. 57% $11,201 $32 Company documents. a Card billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements, and certain insurance fees charged on proprietary cards. Card billed business is reflected in the United States or outside the United States based on where the cardmember is domicile d. b The number of cards that are issued and outstanding. Proprietary basic consumer cards-in-force includes basic cards issued to the primary account owner (â€Å"cardmember†) and does not include additional supplemental cards issued on that account. Proprietary basic small business and corporate cards-in-force include basic and supplemental cards issued to employee cardmembers. Non-proprietary basic cards-inforce includes all cards that are issued and outstanding under network partnership agreements. c Designed to approximate merchant pricing, the percentage of billed business (both proprietary and Global Network Services) retained by the Company from merchants it acquires, prior to payments to third parties unrelated to merchant acceptance. d Average basic cardmember spending and average fee per card are computed from proprietary card ctivities only. 16 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN The American Express Card Exhibit 2 509-027 Selected American Express U. S. Charge and Credit Card Products: 2008 CARD TYPE SELECTED FEATURES AND BENEFITS CHARGE CARDS Green (1958) Gold(1966) â€⠀Preferred Rewards Gold (2002) —Rewards Plus Gold (1994) Platinum (1984) Centurion (1999) One from American Express (2005) 1% of purchases deposited to high yield savings account CREDIT CARDS Blue (1999) —Blue (1999) —Blue Cash (2003) —Blue Sky (2005) —Blue for Students (2001) Optima (1987) —Optima Platinum (1997) City Rewards —In New York City (2004) —In Los Angeles (2005) —In Chicago (2005) Clear (2005) No annual fee, flexibility to pay over time, free additional cards No annual fee, earn up to 5% cash back, unlimited cash rewards No annual fee, earn points redeemable on airline, hotel or cruise services. No annual fee, flexibility to pay over time, Membership Rewards No annual fee, transfer balances for free, Membership Rewards No annual fee, earn Inside points to at, drink and play in New York No annual fee, earn Inside points to eat, drink and play in L. A. No annual fee, earn Inside points to eat, drink and play in Chicago. No fees of any kind, automatic rewards, flexibility to pay over time PARTNER CARDS Airlines —Gold Delta Sky Miles (1996) —Platinum Delta Sky Miles (2002) —JetBlue Card ( 2005) Hotels —Starwood Preferred (2001) —Hilton HHonors (1995) Costco—True Earnings Card (2004) Lifestyle Cards —The Knot (2005) —The Nest (2005) Earn Sky Miles on every dollar spent, earn double miles on some purchases Earn Sky Miles, earn 1 companion ticket each year Earn points towards JetBlue flights Earn points towards free hotel stays, upgrades, even flights Earn HHonors points on every purchase Earn cash back on purchases Membership Rewards, no annual fee, get special offers from The Knot Membership Rewards, no annual fee, get special offers from The Nest FOR CORPORATE CLIENTS American Express Corporate Cards (1966) Business ExtrAA Corporate Card (2003) Comprehensive reporting to track spending and increase compliance Savings through airfare rebates, free travel awards FOR SMALL BUSINESS Business Gold Rewards (2005) Business Platinum Card (1995) Plum (2006) Starwood Preferred Guest Business Credit Card (2001) Business Cash Rebate Credit Card (2003) Source: Membership Rewards, no limit, year-end summary Membership Rewards, access to special events Membership Rewards, access to special events, 5 free additional cards Airport Club access, 24 hour concierge service, by Invitation Only events Save 3-25% on business expenses at selected partners (e. g. : FedEx, Delta) Access to airport lounges, professional office space, personal concierge Trade terms, pay within 10 days, get 2% off or defer payment Free awards nights at Starwood Hotels, awards flights on over 30 airlines Earn 2. % on all purchases and up to 5% for certain business purchases. Company documents. 17 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN 509-027 The American Express Card Exhibit 3 Source: American Express Company Overview: 2007 Company records. 18 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN The American Express Card Exhibit 4 509-027 American Express: Spend-Centric Model The American Express spend-centric business model focused primarily on generating revenues by driving spending on its cards, and secondarily finance charges and fees, allowing the company to grow market share in the payments industry. Source: Company documents. 19 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN 509-027 The American Express Card Exhibit 5 American Express U. S. Card Services—Selected Income Statement Data Year Ended December 31 (millions) Revenues Discount revenue, net card fees and othera Cardmember lending revenueb Securitization income Excess spread, net Servicing fees Gains on sales from securitizations Securitization income, net:c 2007 2006 $10,435 4,762 $9,421 3,434 1,025 425 57 1,055 407 27 $ 1,507 $ 1,489 Total revenues Interest expense Cardmember lending Charge card and other $16,704 $14,344 1,518 964 957 767 Revenue, Net of Interest Expense $14,222 $12,620 Expenses Marketing, promotion, rewards and cardmember services Human resources and other operating expenses Total Provisions for lossesd Pretax segment income Income provision 5,140 3,354 $ 8,494 $ 2,998 $ 2,730 $ 907 $ 4,445 3,227 $ 7,672 $ 1,625 3,323 $ 1,171 Segment Income $ 1,823 $ 2,152 Source: American Express Company Annual Report 2007, p. 53. a Discount Revenue represents revenue earned from fees charged to merchants with whom the company has entered into a card acceptance agreement for processing cardmember transactions. b Cardmember Lending Reven ue represents the outstanding amount due from cardmembers for charges made on their American Express credit cards, any interest charges and card-related fees and balances with extended payment terms on certain charge products. Securitization Income, Net includes non-credit provision components of the net gains from securitization activities; excess spread related to securitized cardmember loans; and servicing income net of related discounts or fees. d Provisions for Losses include credit-related expenses. 20 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN The American Express Card Exhibit 6 509-027 Major American Express Advertising Campaigns in the United States 1958–early 1960s Good As Gold. The World Around! Establish prestige image for AmEx card and provide application instructions. 1969–1974 For People Who Travel Show how the American Express card is â€Å"all you need† for your travel and entertainment needs. 1975–1987 Do You Know Me? Show celebrities receiving the special treatment and recognition cardmembers enjoy around the world. Tagline, which continued through 1995, is â€Å"Don’t Leave Home Without It. † 1987–1992 Membership Has Its Privileges Introduce notion of â€Å"membership† and showcase the benefits of respect, recognition, unsurpassed service as well as Global Assist, Buyers Assurance. 996–2000 Do More/Seinfeld Highlight individual card product benefits such as no pre-set spending, purchase protection, global assist. Talent-driven â€Å"stories† drive emotional relevance and recognition benefit. Use Jerry Seinfeld in a larger than life manner to increase awareness and use of the American Ex press card at everyday spend locations. Sub-campaign uses everyday moments to highlight individual product benefits such as retail protection and roadside assistance. Make Life Rewarding 2002 Relaunch American Express brand post 9/11 using charge card as the face of propriety. Sub-campaign introduced â€Å"revitalized† charge card with membership reward programs built in. 2004–2007 My Life. My Card. Demonstrate the company’s belief that American Express cardmembers are exceptional people no matter where they live or what they do. Featured extraordinary individuals including Robert DeNiro, Tiger Woods, Ellen DeGeneres, and Laird Hamilton, revealing snapshots of their lives. Acclaimed director Martin Scorsese and celebrated photographer Annie Leibovitz were commissioned to lend their vision to elements of the campaign creative. While the creative direction varied from ad to ad, the campaign theme was consistent: achievers of all types choose American Express. 2007–2008 Are You A Cardmember? Entice prospective cardmembers to apply and join the American Express community and reinforce the membership benefits to current cardmembers via showcasing the advantages American Express offers versus competition. Celebrities such as Beyonce Knowles, Ellen DeGeneres, Tina Fey, and Diane Von Furstenberg are featured within a lifestyle and access theme. Source: Company documents. 21 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN 509-027 The American Express Card Endnotes 1 Adapted from The Nilson Report, Issue 902, 2008. 2 American Express Annual Report, 2007, inside front cover. 3American Express Fixed Income Presentation, March 12, 2008, http://media. corporate-ir. net/media_files/ irol/64/64467/DebtInvestorPres. pdf, accessed June 12, 2008. 4 American Express Financial Community Meeting 2/16/2008 K. Chenault speech, texthttp://media. corporateir. net/media_files/irol/64/64467/KCSTalkingPoints020608. pdf, accessed June 12, 2008. 5 American Express Annual Report, p. 110. 6 American Express Fixed Income Presentation, March 12, 2008, ir. net/media_files/irol/64/64467/DebtInvestorPres. pdf, accessed June 12, 2008. 7 American Express Fixed Income Presentation, March 12, 2008, ir. net/media_files/irol/64/64467/DebtInvestorPres. pdf, accessed June 12, 2008. http://media. corporatehttp://media. corporate- 8 Americ How to cite The American Express Card, Essay examples

Introducing the Good, Bad and the Ugly in Off-Page SEO

by B. Coleman The world of search engine optimization a constantly changing one. As Google improves the way that its search engine algorithm works in order to provide quality content to its users, the older methods of SEO are no longer quite as effective. In fact, in some cases, such methods can even lead to you getting penalized by the Internet search giant. As opposed to on-page SEO, which is all about optimizing your SEO content for the search engines, off-page SEO is only partly under your control. Off-page SEO refers to those elements which are more often influenced by your readers and other publishers. It incorporates the essential key elements of link building and social media marketing. The following takes a look at the things to do and the things to avoid when it comes to off-page SEO. Link Building In spite of what some people might say, the latest release of the Google Penguin algorithm did not kill link building as an effective form of SEO – it just changed the game somewhat. There is now a greater emphasis on where you place your links rather than how many you have leading back to your website. The Good * Links on quality, relevant sites. Having your links posted on sites containing content which is relevant to your own is still useful. If the website where your link appears is a respected one with a high search engine ranking and a large number of unique visitors every day, the value of the link will be much higher. * Diverse anchor text. Anchor text refers to the text which accompanies a hyperlink. This is the underlined, highlighted text which shows that it is a link to another page or website. Anchor text is often made up of keywords chosen from the content of an article and turned into a hyperlink. The more you diversify your anchor text, the less over-optimized your content looks. * Internal linking. When you refer to a subject about which you have more information on your website, do you place a link to it in the content referring to the information? This can be very useful to your readers and it makes it easier for the search engine crawlers to index your site. The Bad * Links on unrelated or low quality websites. Having links on the wrong websites can be counterproductive. If you have used aggressive link building strategies in the past, then it is likely that your links appear in places such as low quality article directories and online magazines. Such links will do nothing for your search engine marketing and you will be best off removing them entirely. The Ugly * Spam containing links. Particularly unscrupulous search engine marketers often try to boost their number of backlinks by posting spamming blog comments, social networking sites and online forums. Often, the places where they post such things are completely irrelevant to the content of the website that they are supposed to be advertising. Spam is a sure-fire way to get yourself kicked off Google. * Link buying. Link buying is a completely artificial and unethical method of increasing your search engine ranking and it has always been against Google’s webmaster guidelines. While it may have once worked to a degree, Google is getting better and better at finding out who has been paying for links and is blacklisting them as a result. Trust and Social Media Another factor that heavily influences your standing with the search engines is your reputation. Your reputation largely goes hand in hand with your interaction with others through social media channels. Factors such as content sharing, brand identity and authority are all important when it comes to increasing your standing with both your visitors and Google itself. The Good * Showing yourself to be an authority on your subject. Links to your site and sharing of your content should reflect your authority on the subject you are dealing with. If you can show that you are an authority, your standing will increase with both your visitors and the search engines. * A well-established site. The older your site is and the longer you have been dedicated to it, the better it should perform in the longer term. A site which has a long history of using the right marketing techniques is one which is more likely to earn the trust of your readers. * People sharing your content. People are more likely to share good content on their favourite social media services. This effectively means that they end up advertising for you and without you having to pay either. Content that is widely shared tends to do very well in the search engines. It is sharing which makes content go viral. * Interacting with others via social media channels. Social media is just as much about listening as talking. Interacting with your targeted audience helps to build up rapport and has the potential to improve your reputation. The Bad * Excessive posting and blatant advertising in social media outlets. While social media provides an invaluable medium for you to advertise your business and its products and services, it is generally not a platform for sales pitches and aggressive advertising. Social media is for sharing content rather than constantly posting your latest sales pitches. * Not getting involved. Ignoring your targeted audience instead of responding to their questions is a quick way to lose their respect and make your social media marketing campaign and related SEO fall flat on its face. The Ugly * Breaking the terms of use of social media services. Posting offensive content or content which in any other way violates the terms of use of the social media service that you are using can get you banned and damage your reputation which, in turn, can harm your SEO.