Social Strategy at American Express Case Solution

1. How does AMEX's business strategy differ from the business strategies that Visa and MasterCard, and issuing banks pursue? 

As compared to the 44 million members of American Express, Visa appealed to almost 111 million cardholders, and Mastercard interested around 98 million members. A regular yearly charge by American Express is considered to be $13,832, whereas, for Visa consumers, it is indicated to be $4,292 and $3,458 for MasterCard users. 

American Express opted for a distinct strategy than that of the central competitors, including Visa, issuing banks, and MasterCard. Along with supervising trade settlements, they also distributed their own cards and managed the finances. This implied that the employer would get to know both buyers and sellers and would be able to assist both parties in making judgments. Meanwhile, Visa and MasterCard primarily focused on bank settlements, whereas banks and other financial institutions, such as Chase and Bank of America, dealt with card issuing and service provider administration. As a result, neither Visa nor MasterCard had access to the actual transactions between consumers and businesses. Additionally, Visa and MasterCard charged a reduced fee (in accordance with the card used, around 2% of the total transaction), which usually came at the price of providing cardholders with fewer advantageous advantages. This was done to attract more businesses.

The direct engagement between American Express and customers and companies, which provided a huge competitive advantage, was a fundamental emphasis of Chenault's approach to digital transformation. He thought that the firm would be able to offer value to both in a manner that no other company could, particularly as a catalyst for digital commerce. To do this, Chenault gave the corporation the assignment of identifying the digital transformations that were essential to its existing operations. The goal of Chenault's Enterprise Growth section was to promote innovation in fresh business sectors. Additionally, he exhorted HR directors to integrate social and digital activities into their M&A, public relations, customer service, and hiring processes.

In order to discuss the possibilities of American Express resources with venture capitalists, start-ups, and established businesses, Chenault routinely visited Silicon Valley. Several new collaborations that developed as a result of these forays helped the company acquire Revolution Money, now renamed Serve, which was a payment network created to simplify inter-person financial transactions.

2. What impact does Members Project have on AMEX’s profit and on the cardholders’ social relationships? 

With the introduction of the Members Project, a project developed by the Global Advertising and Brand Management team under the direction of Chief Advertising Officer John Hayes, American Express continued to set the standard for innovation in 2007. This marketing strategy used social advertising and corporate social responsibility to create an exclusive online network for cardholders on the American Express website. Cardholders had been boosted to deliberate, vote, and outline rules for projects associated with causes. The most captivating concept obtained enormous funding.