Environmental Scan: Specific Environment
Current Rivalry
The existing competitors of American Express include Discover Financial Services, Visa, Inc., and MasterCard Worldwide. Unlike American Express and Discover, Visa, and MasterCard do not finance, which means these companies are intermediaries and “they don’t directly finance credit card transactions” (Thangavelu, 2015). That being said, Discover is more in American Express’ strategic group because they both issue cards and work within the same strategic group, so American Express and Discover compete more directly.
Potential Entrants
Not only are there current rivals in every industry, there is always the threat and opportunity for potential entrants to come into the industry. But not …show more content…
They have differentiated themselves and established a very loyal customer base. Usually if a company doesn’t have a differentiated product, the consumers have a lot of bargaining power. The only other credit card company that is comparable to American Express is Discover in that it actually issues the cards as well. On the other hand, since the customer has the final say in whether they purchase something or use their credit card to spend with, this choice is linked directly to American Express’ revenues. If customers aren’t using their cards and making high-priced purchases, it directly impacts American Express’ profits, which will lead to the company creating incentives and rewards for the customers to make them want to spend and purchase more, which in turn creates more of a high bargaining power for …show more content…
Some substitute products may include cash, checks, and online activity. The one main substitute to credit cards is the presence of online and mobile activity. Today, technology has allowed society to create and innovate new alternatives for just about anything. People have to ability and option to pay for goods and services online or on their mobile devices, which means no contact with a credit card. The main company in this market is PayPal. Considering that PayPal already exists, there is a lot of opportunities with all of the technology we have for other online companies like this to emerge. Although this opportunity exists, right now PayPal is really the only one substitute for credit card companies. Since there are only a few alternatives, there is not a high threat of substitutes for American
Current Rivalry
The existing competitors of American Express include Discover Financial Services, Visa, Inc., and MasterCard Worldwide. Unlike American Express and Discover, Visa, and MasterCard do not finance, which means these companies are intermediaries and “they don’t directly finance credit card transactions” (Thangavelu, 2015). That being said, Discover is more in American Express’ strategic group because they both issue cards and work within the same strategic group, so American Express and Discover compete more directly.
Potential Entrants
Not only are there current rivals in every industry, there is always the threat and opportunity for potential entrants to come into the industry. But not …show more content…
They have differentiated themselves and established a very loyal customer base. Usually if a company doesn’t have a differentiated product, the consumers have a lot of bargaining power. The only other credit card company that is comparable to American Express is Discover in that it actually issues the cards as well. On the other hand, since the customer has the final say in whether they purchase something or use their credit card to spend with, this choice is linked directly to American Express’ revenues. If customers aren’t using their cards and making high-priced purchases, it directly impacts American Express’ profits, which will lead to the company creating incentives and rewards for the customers to make them want to spend and purchase more, which in turn creates more of a high bargaining power for …show more content…
Some substitute products may include cash, checks, and online activity. The one main substitute to credit cards is the presence of online and mobile activity. Today, technology has allowed society to create and innovate new alternatives for just about anything. People have to ability and option to pay for goods and services online or on their mobile devices, which means no contact with a credit card. The main company in this market is PayPal. Considering that PayPal already exists, there is a lot of opportunities with all of the technology we have for other online companies like this to emerge. Although this opportunity exists, right now PayPal is really the only one substitute for credit card companies. Since there are only a few alternatives, there is not a high threat of substitutes for American