Business and Management Review <o> </o> <o> </o>
1) Is the business simple and understandable? <o> </o>
American Express is essentially in the banking industry. The company focuses on helping traveler’s while they are away from their home banks. This involves credit card processing, traveler’s checks, etc. The business plan itself is fairly simple.
<o> </o> 2) Does the business have a consistent operating history? <o> </o>
Originally American Express was a shipping and delivering company. Long ago when the US Postal Service was still being established, AXP was founded to help deliver goods. After a time, the company was one of the best in the business. Since the main customers were banks, the management slowly transitioned the company to tailor more to the banks. The company began introducing products specific to banks (such as money orders in 1882), and began closing its delivery businesses. Since then, the company has remained true to its strategy of creating and selling financial products. Financially, the company has paid a dividend and had a positive net income for more than 10 years.
<o> </o> 3) Does the business have favorable long term prospects? <o> </o> It is easy to reason that AXP will have a prominent role in the future economy. As travel becomes easier and more popular, some of the products may be used more. However, the company also faces significant competition from the major banks and credit card companies. To a lesser extent, AXP may be threatened by the emerging technologies of the web and businesses such as Paypal.
Read more of our analysis... <o> </o>
$49.72 (05/15/08)
