American Express SuccessStory
American Express is a globally functional finance, travel and network service provider. Founded in 1850, it has headquarters in Three World Financial Centers; Manhattan, New York. American Express's journey from an express mail service to the leading enterprise in its service and product category is truly a remarkable odyssey.
American Express made a humble beginning as an express mail business in New York. The company was established after merging express mail companies owned by different groups. However, Wells and Fargo parted ways in 1852 with a disagreement over business expansion issues. Initially, American Express enjoyed monopoly on express shipment across the state of New York.
After the success in New York, the company started extending its business via affiliation and co-operation with several other express companies, steamship establishments and railroads. The company began to extend its business to financial service by first establishing a money order business. The story of American Express starting a traveller's cheque business is a rather interesting one.
In 1882, J.C. Fargo, the-then president of American Express was frustrated in his Europe tour due to difficulty in cashing letters of credit. Fargo came back and instructed Marcellus Flemming Berry to create a better alternative. As a result, Traveler's Cheque was launched in in 1981.
American Express lost its railroad express monopoly during the World War I, partly due to the national coal shortage and partly due to the concerns expressed by the President Theodore Roosevelt regarding its monopoly. American Express then forayed into financial services and purchased Shearson Loeb Rhoades in 1981 as the first step. The company then purchased Lehman Brothers Kuhn Leob. In 1984, the newly formed Shearson/American Express purchased Diversified Services, yet another financial firm.
Similarly, the company purchased several other financial establishments like E.F. Hutton & Co. In 1994, American Express consolidated all its investment banking businesses under Lehman Brothers Holding Inc., which eventually got bankrupt in 2008, triggering an onset of a global financial crisis.
American Expressed had previously considered entering the charge card business. But after Diners Club issued the card in March 1950, American Express started to reconsider the proposition with much seriousness. Eventually in October 1, 1958, American Expressed launched its charge card business with 250,000 cards. American Express issued Gold Cards and Platinum Cards in 1966 and 1984 respectively.
The company launched its first credit card service in 1987 as Optima Card. Along with its major businesses, American Express also started a joint venture in Warner Communications, Warner-Amex Satellite Entertainment. The establishment started popular television channels like MTV and Nickelodeon. It was later sold to Viacom in 1984.
AMEX is the world's largest charge card and traveller cheques issuer. Apart from that, it is also the world's largest travel company. Along with its three major services, American Express also offers brokerage services, mutual funds and other investment-related products. Started as a small express mail company, it has grown to be a Fortune 500 company with more than 60 thousand Employees, 2,300 offices in 175 countries and 33 Million dollar revenue. AMEX is one of the hallmarks of a global business enterprise.