How Poverty Effects Character - 2276 Words

The Role of Wealth in Our World Poverty is something we all love to talk about when it comes to other people. Unfortunately, when it comes to ourselves it’s a different story. Sooner or later we find out where we stand in the social ladder in life. We find out if we have less than we thought we had or vice versa. I remember the first time I truly learned to appreciate the things that I had. Back in 8th grade I had a friend named Daniel and he lived in a mansion. After a few months of hanging out with him, I started to feel jealousy over the amount of wealth his family had. It made me so angry that Daniel lived in a mansion and I was just a regular middle class kid. What I ended up finding out though is that Daniel’s relationship with his†¦show more content†¦He discovered a suit case filled with $100,000 and was given a second chance in life. However, due to how he was raised and the type of people he grew up around, like his mother who he called a â€Å"bar whore†, this created a very bad influence which lingered into his adult life. Along with this wealth he found that his family was willing to bring him into their lives once more. For once in over 20 years Ted had everything he wanted and he destroyed it pretty quickly. Ted was very hesitant to get a job or something to fall back on. He is constantly warned week after week by his family to get a job or invest it wisely into a rental property. This idea was foreign to Ted due to his mentality and work ethic. When Ted was homeless, he would only look forward to the end of the day. Weeks went by and Ted did not abandon this foolish mentality which ended up costing him all of his money and the respect of his family. Even though Ted was basically given a second chance in life, he messed it up due to his background of short term goals and bad work ethic. Human nature is a powerful drug that is deep within us all and is waiting for a perfect opportunity to expose itself. Wealth is known to do many things to a man. Some say it changes people, but I disagree. Wealth actually tends to bring out people’s true colors. In the short essay â€Å"My Wood† by E.M. Forster, he portrays himself obtaining a large amount ofShow MoreRelatedAnalysis Of As I Lay Dying 1682 Words   |  7 PagesProfession of Poverty As Robert Kennedy once said, â€Å"I believe that, as long as there is plenty, poverty is evil† (Kennedy). Money and wealth contribute to the image a person presents. In a world based on standards such as those, the wealthy will seem to be superior to the poor and that almost never ends in a positive way. William Faulkner, author of As I Lay Dying, was aware of the effects of poverty and took the opportunity to use his characters to depict poverty s effects. The novel takes placeRead MoreThe Other Wes Moore And Its Consequences889 Words   |  4 PagesPoverty is one of the main subject matters that is present in the book of The Other Wes Moore, and its consequences are revealed through various outcomes that are being portrayed by both characters. Poverty is being characterized through the social environment that both characters live in. Both Wes Moore’s were living in an environment that had an impact not only on the way they behave, but also their psychological behav iour. â€Å"Living in the Bronx and Baltimore had given me the foolish impressionRead MoreThe Film Crash By Paul Haggis992 Words   |  4 PagesThere are many social issues that plague our society and many of these problems are closely related to social class and race. Some of these issues include prejudice, individual discrimination, institutional discrimination, relative poverty, absolute poverty, and social class. Much of this is touched upon in Paul Haggis’ 2004 film Crash that even over a decade after its release the social issues brought up in the film still apply. The film Crash depicts many scenes of discrimination that all applyRead MoreThe Motif of Poverty Throughout Crime and Punishment by Dostoyevsky 1221 Words   |  5 PagesPoverty is an essential motif in Crime and Punishment that enables characters to expose their isolation from society. Raskolnikov demonstrates the true effect that poverty can have on an unemployed man in the 1860s. Razumikhin is seen as Raskolnikov’s foil character that reacts to his form of poverty in the opposite way of Raskolnikov towards society. The weight of being desperately pour effects Marmeledov to extensive lengths that ultimately ends in his death. Crime and Punishment revolvesRead MoreUnder The Persimmon Tree By Suzanne Staples1530 Words   |  7 Pagesand PTSD into her characters, and incorporates it into the plot very well. (BS-3) She also inputs many facts about the differing beliefs in Islam. (TS) Throughout the book Under The Persimmon Tree, Mrs. Staples incorporates several real world concepts into the plot and details to advance the plot and characterization. (MIP-1) One real world concept that was inserted into the book is the effects that the Taliban’s regime has on the countries they occupy. (SIP-A) One of these effects is the increaseRead MoreClassic Principal of Argument Essay example891 Words   |  4 Pagesin writing or face-to-face. To accomplish that goal, a writer should imply the three classical principles of argument; ethos, pathos, and logos. Ethos occurs when an author gains respect based on his or her character. Authors use ethos to convince their audience based on his or her character. Authors using pathos in an argument, it persuades the audience through emotions. Logos supports the argument by reasoning (Lamm amp; Everett, 2007) (Dlugan, 2010). An author uses logos to persuade his or herRead MoreA Child s Education Is Vital991 Words   |  4 PagesWhat is poverty and does social class shape the character of a child’s life and education, especially those children of poverty? These questions are important t o consider for educators and all involved in the goal for children to have greater achievement. It s even more important to note that forty percent of the poor, in the United States, are children (Stevenson, 1997). Knowing this is the reason that finding solutions and studying the effects of parent involvement, both at school and at homeRead MoreQuestions On Equity And Education1741 Words   |  7 Pagesis affecting the students in poverty (Nielson, 2013). There has also been a problem with tracking students and the way that the school sorts them out. Depending on race, low academics, special ed. and the non-white students are also disproportionally represented and subject to discipline policy that removes them from school (Nielson, 2013). Poverty Poverty is a huge issue in a child’s educational success. That does not mean that children living in poverty will never be successful, butRead MoreConsequences Of Poverty In Oliver Twist By Charles Dickens1306 Words   |  6 Pagesmany interrelated ideas.it is concentrated with the miseries of poverty and the spread of its degrading effects through society,Many evils are awaken in the society because of poverty for instance hunger, homelessness illiteracy etc.which was shown clearly in the novel.one of the worst consequences of poverty and being deprived of life’s essential is crime,with all of its corrosive effects on human nature.in the Victorian era,poverty experienced was extreme in case of the working classes.the mostRead MoreBehind the Beautiful Forevers Essay1136 Words   |  5 PagesBrett Potter HST 104 Section 002 Yixin Chen 27 November 2012 The Poverty of Annawadi as seen in Behind the Beautiful Forevers The city of Mumbai has seen much growth in the past years. A string of elegant hotels have been set up for travelers and high-class business men. An ever growing, top of the line airport has been built for those coming in and out of the country. From the outside, Mumbai seems to have taken a liking to being internationally integrated with the rest of world, otherwise

Coming Home Essay - 785 Words

How does the poet bring out the theme of ‘passing of time’ in the poem ‘Coming Home’? The poem ‘Coming Home’ by Owen Sheers, explores the description of the poets visits to his family, and how the passage of time has changed some things and make some things feel odd. There are three main characters in this poem, namely the mother, father and the grandfather, as well as the narrator, who is the poet and reflecting on this visit of his. It is in the form of omnipresent narration, which gives it somewhat of a constant flow throughout each stanza. The reflection is done in a low tone, which makes the reader not focus at any particular part of the poem, while the vivid imagery and attention to detail captivates the readers mind throughout the†¦show more content†¦This stanza ends in a grim fashion, which is â€Å"it is a tune that he plays faster each year†, which tells us that time has taken a severe toll on his grandfather, and that there is nothing that those around him can do but hope for his wellbeing. Finally, I would like to say that this poem paints an accurate picture of aging and passage of time in real time, and though it is grim, it is nothing but the truth that is seen in the worldShow MoreRelatedComing for to carry me home Essay1549 Words   |  7 Pagesthe main ideas of the song and overall this verse is repeated three times throughout the song: â€Å"Swing Low Sweet Chariot, Coming for to carry me home.† In this verse the â€Å"Chariot† refers to the people who control the Underground Railroad. Thus, the singer is informing the slaves to be aware and prepare to escape (Jones 1). Throughout the song â€Å"Coming for to carry me home† is repeated in every verse. This represents the people who were against slavery. They were helping the slaves to get to theRead MoreComing Home From The Great War Diary Essay1056 Words   |  5 PagesNovember 10, 1918 One more day! Tomorrow is the day father is coming home from the Great War and I couldn’t be any more excited than I already am! He’s been gone for so long and I’m really looking forward to this. Everything’s going to be better. Mother won’t be sad anymore and everything will be normal again. She won’t be so tired from all of the work that father did when he was home. In my opinion, he shouldn’t have even left. He didn’t even have to go. He knew things were going to be hard forRead MoreImmigration Is Up Of The United States1274 Words   |  6 Pages Flora Ho Prof. Rocklin Hist 152 Essay Assignment Question 1 Immigration makes up of the United States. The life of an immigrant faces many struggles. Coming to the United States is a very difficult time for immigrant, especially when English is not their first language. In Oscar Handlin’s essay, Uprooted and Trapped: The One-Way Route to Modernity and Mark Wyman’s Coming and Going: Round Trip to America, both these essays describes the life of immigrants living in America and how they are ableRead MoreRhetorical Analysis : English 102971 Words   |  4 Pagessince the beginning of the semester. Coming in to this class, I knew that the rhetorical appeals were ethos, pathos and logos. However, I was not very proficient at using them in my writing. This class allowed me to practice using the rhetorical appeals it strengthen my writing. In my argumentative essay I used pathos to appeal to the reader emotions and to make them feel bad for the college athletes because they were not being paid. An example of this from my essay is w hen I used the quote, â€Å"student-Read MoreHome Of Home Essay1135 Words   |  5 PagesSimilarly, home is also defined differently for everyone. Some people might believe that home is just the house they live in, and with each move comes a new home. Others, however, believe that home is where their family is. People use family as a way to define home in slightly different ways. For example, in her essay â€Å"On Going Home,† Joan Didion writes about wanting to give her daughter â€Å"home† for her birthday. Didion describes her home as being where her family is. In his essay, â€Å"Coming Home Again,†Read MoreAnalysis Of The Poem Achievement Of Desire By Richard Rodriguez1330 Words   |  6 PagesMarissa Foote Professor Mary Morley Composition 110 September 6, 2014 In the essay, â€Å"Achievement of Desire†, author Richard Rodriguez, recalls the difficulties of balancing life as a thriving student and the life in a working class family. Growing up, Rodriguez was the exception to the stereotypical student coming from an immigrant/working class family. From an early age, he prospered in academics. He made school his top priority. Rodriguez spent time with his books rather than with family or friendsRead MoreThe Knife1115 Words   |  5 PagesAnalysisThis  essay Short Stories- amp;Quot;The Knifeamp;Quot; By Judah Waten Textual Analysis  is available for you on Essays24.com! Search Term Papers, College Essay Examples and Free Essays on Essays24.com - full papers database. Autor:  Ã‚  anton  Ã‚  24 November 2010Tags:   StoriesWords:  2398  Ã‚  Ã‚  |  Ã‚  Ã‚  Pages:  10Views:  1338Save essay in my profilePrintable Version Essay:Please  Upgrade your account  to read the full essay. ---------------- Essays24.com  is one of the most comprehensive databases of essays, termRead MoreReading, And The Learning Environment Of English983 Words   |  4 Pagesenvironment of English. Coming to this college my first year, I had taken an English class before Ms. Kuwabara’s; I honestly did not like the other professor s teaching style, so, in the end, the class didn’t go well. As I started this semester I had a good feeling about being in your class again. Before, I had taken English 307 with you, and I had really enjoyed the class; if you can tell, I was never absent to your class because I felt I would miss something important. Coming into English 100 wasRead MoreJoan Didions on Going Home- Analysis Essay639 Words   |  3 PagesIn Joan Didion’s essay, â€Å"On Going Home† Didion describes her experiences and thoughts on what defines her meaning of home. Didion uses many asyndetons and polysyndetons to emphasize her emotions and poses several rhetorical questions. Throughout the essay, Didion poses an important point that, perhaps her generation is the last to truly know the meaning behind the word â€Å"home†. The contributing factors to such conclusion derived from her personal experiences with her direct family (mother, fatherRead MoreEssay on An Individuals Reflection on Academic Writing 951 Words   |  4 Pagespracticed constantly regularly. After three months of taking ESL 273, I have accumulated various experiences in writing advanced sentences and organizing academic essays which are really necessary for me to perform well in the next English course, ESL 5, as well as other classes. As a result, I think I am well-prepared and ready for the next coming course ESL 5. During the ESL 273 course, one of my strengths which is the ability of using various examples as well as explanations to reinforce my main

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

Sundiata an Epic of Old Mali free essay sample

D. T. Niane’s book Sundiata: An Epic of Old Mali tells the history of Mali’s former ruler from the perspective of a royal griot, Djeli Mamoudou Kouyate of the village of Dejliba Koro (Siguiri) in Guinea. According to Niane, he is not trying to write a traditional history book, rather, he is trying to present the history of Sundiata’s empire through the traditional African form of memory using oral tradition as his only sources. He claims that the West has taught historians to avoid oral traditions and to rely instead primarily on written documents. However, Niane disagrees with these methods and claims that much can be learned from the stories and traditions passed from generation to generation through spoken word. He makes a wonderful case for the problem of Westernization of the historical discipline; stressing that it is important to understand the people being studied on their own terms, instead of viewing their histories from Eurocentric perspectives. We will write a custom essay sample on Sundiata: an Epic of Old Mali or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The story of Sundiata begins before his birth. In the beginning, the griot establishes his authority on the subject by claiming that he was entrusted with these stories from his father and his father’s father. The griot also explains that griots take an oath and are unable to lie. According to tradition, Sundiata came from a long line of Malian kings. His father was a great and handsome man who was loved by his people. One day, Sudndiata’s father, Maghan Kon Fatta received a visiting hunter and soothsayer, who foretold that the king would one day have a son, that son would become a great ruler. However, the stranger informed Maghan Kon Fatta that in order for these things to come true, he must marry an ugly woman that would bear him this child. The woman eventually came in the company of two hunters; she was known as the buffalo woman and would become Sundiata’s mother. After the king Maghan Kon Fatta married the buffalo woman, Sologlon Kedjou, she became pregnant with a son, Sundiata. The king was overjoyed and upon the birth of the son, his first wife, Sassouma Berete, became increasingly jealous of Sologlon and her son. The child was named Mari Djata and will later be called Sologlon Djata and eventually Sundiata. However, Mari Djata failed to live up to his father’s high hopes as a child. He was unable to walk or talk at age three. Nonetheless, the king Maghan Kon Fatta entrusts the child with his griot, Doua to pass on the traditions and stories of Mali. Soon after, the king dies and so does Doua, the griot. At this point, the jealous first wife sends Sologlon, Mari Djata and his sister, Sogolon Djamarou, out of the palace and her son Dankaran Touman takes his father’s place as ruler of Mali. Sologolon is embarrassed because of her son and is taunted by Sassouma. One day, she returns from the palace crying and Sundiata hears his mother’s sobs. He decides to have a blacksmith create him an iron rod. He uses this rod to prop himself up and stand for the first time. Upon seeing him stand and walk, his mother and the whole city cheer and rejoice. This frightens the jealous Sassouma who convenes with a group of witches to plot out Sundiata’s murder. However, the witches refuse to follow through with his murder because of his kind nature. Unable to kill Sundiata, the queen mother, Sassouma exiles the family from Mali and they travel from city to city and kingdom to kingdom seeking refuge. Sundiata swore that he would return and take his proper place on the throne. As the years passed, Sundiata grew up. He was a great hunter and became very close friends with his half-brother Manding Bory. For a long time, the family stayed in Mema where the king, Moussa Tounkara, became very fond of Sundiata and trained him as a warrior and even made him heir to the throne of Mema. However, during this time the king of Sosso, Soumaoro Kante, had taken over Mali. Sundiata knows that as a man he must return to Mali and defeat the sorcerer king. Bella Fasseke, the griot, son of Doua belonged to Sundiata and was prisoner of Soumaoro Kante along with Sundiata’s sister Nana Triban, who had become one of the king’s many wives. Sundiata was a brave and fierce warrior and was able to defeat Soumaoro after several battles and was able to return his sister and his griot from under the power of Soumaoro. Sundiata became the rightful ruler of Mali and expanded Mali’s Empire far through conquering many lands. He was a kind and just ruler, loved by all. For the people of Mali, Sundiata is a national hero. This story is important to the identity of these people even today as a way to define themselves outside of their colonial status. Sundiata provides an example of greatness  for the people to cherish and aspire to. Sundiata, like Mali, is eternal. This book does an excellent job at portraying the life of Sundiata. However, it is not a traditional history book, meaning that it relies primarily on oral rather than written primary sources. Also, the author, Niane, does not present an argument, he simply retells or translates a story that is highly based on magic, superstition, and biased facts. Thus, while this book is an excellent story, it may not be totally objective or historically accurate in some of its assumptions and claims.