American Express 2005 Annual Report Download - page 22

AXP / AR.2005
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■ Similarly, cash and checks are used for the vast majority of small-business spending. We estimate that U.S.
small businesses use cards for less than 15 percent of their spending, and that amount is likely to be even
lower internationally.
■ Midsize companies worldwide use cards for less than 10 percent of major purchases such as travel and
entertainment and office supplies, although many can clearly benefit from the savings and expense man-
agement services that American Express provides.
Given the competitive advantages of our business model and the differentiated appeal of our products and
brand for high-spending consumers and business clients, we believe we are well positioned to capture this
substantial opportunity.
CAPITALIZING ON OPPORTUNITY
At a time of mergers and consolidation across the financial services industry, most of American Express’
growth in recent years has come from our existing businesses. While we remain open to making an acquisi-
tion if it would accelerate our growth and business strategies, we are focused on organic opportunities in both
traditional and emerging areas of our business.
There is significant potential to grow spending and lending within our existing customer base, as well as to
deepen relationships with corporate and small-business customers. And we have proven our ability to
expand our franchise by attracting new high-value customers in both our proprietary payments and network
businesses. Continuing to do these things well will enable us to capture a greater portion of the vast and
growing market opportunity that I outlined earlier. Even small percentage increases in average cardmember
spending and cards-in-force can translate into substantial revenue gains.
In addition, we have a range of emerging opportunities that build upon our existing capabilities.
■ Global Network Services (GNS) — Our GNS business is off to a great start in the United States, but it’s only
in the early stages of growth. We have signed an impressive group of major banks to issue cards on our
network. Combining their extensive distribution capabilities with our brand power and network gives us
added opportunities to grow spending, increase cards-in-force and expand our merchant coverage. Mean-
while, we have great potential to grow our network business internationally, building upon the momen-
tum we have already established.
HELPING MIDSIZE BUSINESSES
Helping midsize companies manage
employee spending is an excellent growth
opportunity for American Express.
In 2005, we launched corporate cards in
partnership with British Airways, Aeroplan
and Alitalia that deliver travel discounts
and rebates to midsize businesses that
were traditionally available only to larger
companies.