Case Type: improve profitability.
Consulting Firm: Capital One final round job interview.
Industry Coverage: financial services.
Case Interview Question #00411: The client American Express Company (Amex, NYSE: AXP) is a multinational financial services corporation headquartered in Manhattan, New York City, New York, USA. The company is best known for its credit card, charge card, and traveler’s cheque businesses. Currently Amex cards account for about 
24% of the total dollar volume of credit card transactions in the US.
Our consulting team has been retained by Amex to help improve the profitability of their largest credit card offering. Their credit cards are in the same class as Visa or MasterCard, and provides average returns in comparison to the industry. However, our client believes it can become more profitable. You need to analyze the situation and make recommendations for Amex. How would you go about the case?
Additional Information: (to be given to you if asked)
1. Costs
- Marketing costs (Can’t change)
- Selling, General and Administrative Expenses (SG&A, Can’t change)
- Personnel (Can’t change)
- Bad credit, theft, etc. (Can’t change)
- Other costs (Can’t change)
2. Revenue
- Annual fee – currently $50 (Could change)
- Annual percentage rate APR – 14% (Could change)
- Merchant fee = 1.5% (Can’t change)
Possible Answers:
Note to Interviewer:
As soon as the interviewee had identified the key drivers of revenue and cost, the focus of the case should be shifted to customer segmentation and tailored services for each customer segment.
