American Express Quality Management and BEEP Card Strategy
This paper examines American Express as a global financial services company and evaluates its use of quality management tools—particularly Six Sigma—to address operational inefficiencies and support strategic growth. The paper reviews the company's organizational background, revenue model, marketing and branding approach, and competitive positioning. It then analyzes a specific problem involving point-of-purchase (POP) research quality and proposes how Six Sigma methodology can resolve data inaccuracies. The paper also considers the potential launch of the Business Executive Exclusive Perks (BEEP) Card, a product targeted at upper-echelon corporate executives, and concludes with a SWOT analysis assessing American Express's strengths, weaknesses, opportunities, and threats.
- Introduction and Organizational Background: Overview of American Express history and market position
- Literature Review and Business Model: Revenue model, recession response, and strategic partnerships
- Marketing and Advertising Strategy: Celebrity branding, card differentiation, and customer experience
- The Problem: POP Research and Quality Failures: Merchant cost burden and POP research shortcomings
- Opportunities and Six Sigma Recommendations: Root cause analysis and Six Sigma corrective actions
- Conclusions and SWOT Analysis: Strategic outlook and SWOT table for American Express
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What makes this paper effective
- The paper grounds its quality management argument in a concrete, real-world operational problem — inaccurate POP research data — rather than discussing Six Sigma only in the abstract, making the analysis immediately practical.
- It integrates multiple analytical frameworks (Six Sigma, SWOT, brand strategy) in a unified case study format, demonstrating how these tools work together in a business context.
- The marketing section uses specific, recognizable examples (celebrity endorsements, Product RED, differential card tiers) to support broader claims about branding strategy, lending credibility and specificity to the argument.
Key academic technique demonstrated
The paper demonstrates applied case study analysis: it identifies a specific organizational problem, traces its root causes using a named quality management methodology (Six Sigma), and recommends corrective actions grounded in that methodology. This technique shows how theoretical frameworks are translated into actionable business decisions.
Structure breakdown
The paper follows a problem-solution structure common in business case writing. It opens with an organizational overview and literature review establishing context, moves through marketing and branding strategy, then narrows to a specific operational problem (POP research failures). It applies Six Sigma analysis to diagnose the root causes, offers recommendations, and closes with a strategic SWOT analysis. This arc from macro context to micro problem to macro strategy is well-executed.
Introduction and Organizational Background
American Express is a global, diversified financial services company headquartered in New York. The company is over 150 years old, having been founded in 1850. It is best known for its credit card, charge card, and travelers check business, but has numerous ancillary operations that serve as profit centers. Analysts rank American Express as the fourteenth most valuable brand in the world, estimating the worth of the brand at over $21 billion (AXP, 2009). Despite its long tenure in the marketplace and high service level, American Express remains vulnerable to the fluctuations of the economy, and thus any additional product lines must be carefully considered.
The central question examined here is whether American Express should use quality management principles to excel in a highly competitive niche market — specifically, whether to launch the Business Executive Exclusive Perks Card (the BEEP Card) given current levels of business commitment in the field.
American Express is a diversified global financial services company that was founded just prior to the American Civil War. It is best known for its business line of charge cards and traveler's checks, and holds approximately 25 percent of total credit card transactions in the United States, largely because of its perks and programs focused on American business (Chenault, 2009). American Express does not sell anything truly tangible. Yes, they carry some merchandise, but their primary focus is to get as many American Express cards as possible into the hands of qualified customers. Revenue is generated through the fees charged to retailers and credit card clearinghouses. American Express is essentially branded as a service-oriented business — top-notch service that customers receive in every interaction with American Express staff (Bihlmier, 2002).
One of the reasons American Express has been so successful, despite the ups and downs of the economy, is its focus on customer experience and its ability to brand that experience as something that feels tangible, even though it is not. The company has achieved this through enhancement of the customer experience from initial contact through final payment, through celebrity endorsements, and through consistent branding of the overall experience (McCarthy, 2005; Davis, 2010; americanexpress.com).
For many business professionals, American Express is more of an experience than a product. Cardholders can call the company 24 hours a day, 365 days a year in an emergency, have funds delivered or charges authorized by phone, and receive discounts on hotels, car rentals, meals, and even special events. Being an American Express member "has its perks." With the new BEEP Card, specifically designed for that upper echelon of corporate executives, the experience offered will be even more customized and exclusive.
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