1. E-business model

1. Identify the E-business model that the website pursues. Consider E-business concepts and approaches to comment on specific strengths and weaknesses of your chosen website.

According to Chaffey (2015, p14) E-business can be defined as the transformation of key business processes through the use of internet technologies. E-business technology provides businesses the opportunity to manage their operation more effectively. This includes the ability to identify customers, reach customers and market products in a more effective manner, overall facilitating the processing of business transactions.

Operating in the banking financial service, American Express is a leading card payment service provider, the company processes transactions for American express card holders and is also a payment processing network provider for merchants.

As a non-e-commerce website American Express does not directly generate revenue through their website in any form, rather the company makes most of its income by charging a fee on transactions that take place with partner merchants and yearly fees paid by card members. The company's website is used for marketing and promotion purposes providing thorough information on products, offers and updates. Furthermore it allows customers to use services traditionally provided through local branches to now easily be done on their website such as card application, deposits, card activation and customer support.

Strengths

High brand value - With a long standing brand equity American Express is one the world’s most trusted and recognised brands. In 2017 Forbes named the company as the 28th most valuable brand in the world, the highest within financial services. This has allowed for continued credibility and increased customer loyalty.

Innovative - From a freight company founded in 1850 to a leading financial service provider, American express has continually shown to be innovative and adaptable and well able to evolve within its business environment. The company has been able to generate value for itself and its customers throughout centuries with innovation strategies:

Service innovation is well reflected in their strong track record of delivering excellent customer service through ways such as 24/7 customer support through chat, real-time customer service through social media and the information rich and educational content provided on their open forum blog.

Product innovation American express offers a variety of value adding innovative products for their card members.

Cardholders have the ability to gain rewards points on every purchase that they make, these points can be used towards a variety of purchases or can be donated to charitable causes. Adding further to customer experience through their products the company offers card members exclusive access to events, cardmembers also have the benefit of accessing American Express Lounges where they can relax.

Technological innovation This includes digital wallets, a convenient way for customers to pay on the go even when they do not have their card at hand. They also offer real-time purchase alerts allowing customers to get instant notification after each purchase.

Social Media American Express has a strong presence across social media platforms Facebook, Twitter, Instagram and LinkedIn. With high levels of engagement on these platforms ​​the company has been able to effectively leverage social media to increase awareness and educate consumers about the brand. It has allowed for faster and direct support for card members.

Website American Express has a well-designed and functional website that allows for a seamless user experience.

Weaknesses

Less users - American Express has significantly less users as competitors Visa or MasterCard. According to Statista American Express has a total of 112 million users worldwide compared to Visa and Mastercard with both over 1 billion credit card users.

Lack of merchant acceptance - Due to higher merchant fees charged by American express, there are retailers who choose not to accept American Express credit cards, making it not as widely accepted as its competitors.

Opportunities

Debit cards - Currently American express only offers credit cards, in order for the company to gain a new segment of customers and compete with main competitors such as Visa it is recommended for American express to consider introducing debit cards within their product range.

Emerging markets - According to the Financial times there has been an increase in the use of digital payments methods in emerging markets. Globaldata.com between 2020-2024 there will be an increase of 5.8 % in the number of credit card users in the Philippines and 5.5% in Indonesia. This gives American Express the opportunity to penetrate in emerging markets (Financial times, 2021).

Treats

Bad online reviews with the increased use of online review websites such as Trust pilot and Google reviews for customer decision making, American express is potentially losing out on customers as their ratings online are poor compared to their competitors. It is recommended that American Express looks at improving their rating on review websites in order to give potential customers confidence to do business with the company.

(Trustpilot,2021)

Online banks - There is a threat of new entrants coming into and reshaping the financial service industry. Online banks - also referred to as challenger banks such as Monzo, Sterling and Revolute are especially popular among Millennials and have been reshaping banking by providing customers with completely digitalised banking services.

With the overall decrease in the traditional way of banking among all age groups since the start of the pandemic (see graph ) it is recommended that American Express tries to personalise and digitalise as much of their services in order to captivate millennials in the long run.

(Mckinsey, 2020)