American Express is a financial services and travel-related services company based in the United States. It is one of the 30 components of the Dow Jones Industrial Average and is one of the Big Four American banking and finance companies, along with Mastercard, Visa, and Discover. American Express has a presence in over 160 countries. It provides customers with various credit cards, charge cards, traveler’s checks, insurance, and other financial products and services.
Analysis of American Express’ Current Economic Situation
American Express’s most important resources are its customer base and its financial products and services. These resources are necessary for the company to remain competitive in the market and to generate revenue. The company’s customer base is its most valuable resource because it provides the foundation for its future growth and profitability (Nelson et al.,2006).
Scarcity affects the future of the company in several ways. The first is that if the company’s resources become scarce, it can lead to higher costs and reduced profits. Additionally, if the company loses customers due to a lack of resources, it can reduce its market share and lead to lost revenue. Furthermore, if the company is unable to expand its customer base, it can lead to a decrease in the company’s value. Besides, American Express has several specializations and comparative advantages. For instance, the company offers various credit cards, charge cards, traveler’s checks, and other financial products and services. Secondly, the company is one of the Big Four American banking and finance companies, giving it a competitive advantage in the market (Nelson et al.,2006). Thirdly, the company is one of the 30 components of the Dow Jones Industrial Average, which indicates customers’ trust in the company. Finally, the company has a presence in over 160 countries, giving it a global reach and the ability to serve customers in multiple countries.
The elasticity of demand and supply can significantly impact American Express’s operations (Vasigh et al.,2018). If demand for the company’s products and services is inelastic, it can lead to higher prices and reduced profits for the company, as customers may not be willing to pay higher prices for the same product or service. On the other hand, if demand is elastic, the company can benefit from lower prices and increased profits. Similarly, suppose the supply of products and services is inelastic. In that case, it can lead to higher prices and reduced profits, as the company may not be able to produce enough products or services to meet demand. On the other hand, if supply is elastic, the company can benefit from lower prices and increased profits.
Thoughts about American Express’ Economic Situation
American Express is in a good position to remain competitive in the market and generate future revenue. The company has several specializations and comparative advantages that give it a competitive edge in the market (Melamed,2019). Additionally, the company’s presence in over 160 countries gives it a global reach and the ability to serve customers in multiple countries. Furthermore, the company is one of the 30 components of the Dow Jones Industrial Average, which indicates customers’ trust in the company. However, the company has its challenges. The most significant challenge is the elasticity of demand and supply. If demand for the company’s products and services is inelastic, it can lead to higher prices and reduced profits for the company. Similarly, if the supply of products and services is inelastic, it can lead to higher prices and reduced profits. The company must be able to anticipate and adjust to changes in the market in order to remain competitive and profitable.
Recommendations
In order to remain competitive and profitable in the future, American Express should focus on several key areas. Firstly, the company should focus on expanding its customer base, which is the foundation of its future growth and profitability. Secondly, the company should focus on anticipating and adjusting to changes in the market, such as changes in demand and supply. Thirdly, the company should focus on offering innovative products and services to meet customers’ changing needs. Finally, the company should focus on expanding into new markets and countries to generate new revenue sources and grow its customer base.
The Market Structure in which American Express Operates
A monopolistically Competitive market structure is a market structure in which many firms offer similar but not identical products. This type of market structure allows for product differentiation, meaning that firms can compete for customers based on factors such as price, quality, and service (Vasilev,2020). The large number of firms that participate in this type of market structure creates competition and keeps prices lower than they would be under a monopoly.
In addition, the presence of multiple firms provides customers with more options to choose from, which encourages innovation and product development. American Express operates in a monopolistically competitive market structure (Vasilev,2020). The company offers various financial services, including credit cards, loans, and travel services. As one of the largest financial services companies in the world, American Express has a competitive advantage over its competitors. The company’s ability to offer various services and its extensive customer base allows it to remain competitive in the market. American Express also offers services that are tailored to different customers, such as business owners, frequent travelers, and college students. This product differentiation allows American Express to compete with other firms in the market and capture a larger market share.
The Economic Situation in the Market
The economic situation in the Monopolistically Competitive market structure in which American Express operates is characterized by competition among firms for customers (Vasilev,2020). This competition can lead to lower prices and better-quality products and services for customers. Additionally, the market structure allows for some degree of product differentiation, which allows firms to compete for customers based on price and other factors such as quality and service. This competition can lead to increased profits for firms.
Conclusion
American Express is a financial and travel-related services company based in the United States and is one of the Big Four American banking and finance companies. The company’s most important resources are its customer base and its financial products and services. Scarcity affects the future of the company in several ways, and the company has several specializations and comparative advantages that give it a competitive edge in the market. The elasticity of demand and supply can significantly impact American Express’s operations, and the company must be able to anticipate and adjust to market changes to remain competitive and profitable. American Express operates in a Monopolistically Competitive market structure, and the economic situation in the market is characterized by competition among firms for customers. In order to remain competitive and profitable in the future, American Express should focus on several key areas, such as expanding its customer base, anticipating and adjusting to changes in the market, offering innovative products and services, and expanding into new markets and countries.
References
Melamed, D. (2019). The American Express case: Back to the future. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3407652
Nelson, R. A., Kanso, A. M., & Levitt, S. R. (2006). Integrating public service and marketing differentiation: An analysis of the American Express Corporation’s “Charge against hunger” promotion program. Service Business, 1(4), 275-293. https://doi.org/10.1007/s11628-006-0013-8
Vasigh, B., Fleming, K., & Tacker, T. (2018). Supply, demand, and elasticity. Introduction to Air Transport Economics, 46-105. https://doi.org/10.4324/9781315299075-3
Vasilev, A. (2020). A business-cycle model with monopolistically competitive firms and Calvo wages: lessons for Bulgaria (1999–2018). Journal of Economics and Development.
write