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What Business Are You Really In? Example: American Express

Monday, March 17th, 2014

“What business are you really in?” When I ask managers or companies what business they are in, the first thing I usually get is a questioning look. Then the chairman of a pharmaceuticals wholesaler says “pharmaceuticals wholesaling” or “logistics.” The forge operator says “forging” or “subcontractor.” The chairman of a fashion company says “fashion” or “industry.” The CEO of an engineering firm says “civil engineering.” We often discuss this topic with our clients because growth-oriented companies know that they are not in the business that corresponds to the work they actually do. The insight that a company needs clever strategic positioning in order to distance itself from the relevant competition is not a new one. That this begins with asking about the true nature of the business is new to many.

During the 10th International Brands Colloquium on September 12-13 at Seeon Abbey, most of the speakers made it clear, independently of one another, that they are not in the business in which they are presumed to be – and that this is a significant factor in success. Dyson is not in the vacuum-cleaner business. Sixt is not in the rental-car business. And American Express is not in the credit-card business, just to name a few examples.

Let’s look more closely at American Express: Thomas E. Nau, Chairman of the Board, American Express, Germany and Austria, made it clear in his speech that American Express is not in the credit-card business, but in the service business. “To become the world’s most respected service brand” is the purpose of this company. Thomas Nau made it clear that Amex customers must always be able to rely on the company, even in emergency situations. “We will always help people whose location we can pinpoint, anywhere in the world.” In my view – and based on my experience – Visa and MasterCard still have miles to go. Credit-card proficiency is one thing; the service behind it is another.

A company with such a mindset aligns itself completely differently from a company with the mindset that it is in the credit card-business. Completely different goods and services, processes, procedures, and employees are needed. Differentiation starts here.

So, Amex is in the service business. And you? What business are you really in?

On my own account: The 11th International Brands Colloquium will take place on September 18-19, 2014 at Seeon Abbey in Chiemgau, as always. Once again, business leaders, companies, and senior-brand managers will convene to speak in a familiar and confidential setting about brands, strategy, leadership, and growth. There is no documentation of the proceedings so that the speakers can talk about things not intended for wider publication. You can find out more about the International Brands Colloquium here.

© 2014, Prof. Dr. Guido Quelle, Mandat Consulting Group, Dortmund, London, New York. All rights reserved.