1. New Market Entrants Entrance of emerging travel websites create competitive markets Substitutes Traditional face-to- face travel agent services Suppliers: Affiliates must be reliable and complementary to Amex business strengths Customers Customers will always seek the lower price for travel services regardless of business model American Express Traditional Competitors: insurance, banking, etc. Porter’s Competitive Forces

2. Porter’s Additional Forces 1 Political & Legal Environment Political & Legal Environment Terrorist threats may force travel cutbacks by consumer and Corporate clientsTerrorist threats may force travel cutbacks by consumer and Corporate clients Incoming Government administration could force the airline industry to undertake belt tightening regulationsIncoming Government administration could force the airline industry to undertake belt tightening regulations Complementary Complementary Internet based partners are unreliable and possess no long term model for successInternet based partners are unreliable and possess no long term model for success Technical Environment Technical Environment Strong dependency on technology associatesStrong dependency on technology associates Customers look to Amex as ASP rather than collaborator with technologyCustomers look to Amex as ASP rather than collaborator with technology

3. Porter’s Additional Forces 2 Demographic Environment Demographic Environment Corporate customers are the bread and butter of AXI not average consumerCorporate customers are the bread and butter of AXI not average consumer Social Environment Social Environment American Express is not perceived as a cost saving travel firm but rather a credit cards domainAmerican Express is not perceived as a cost saving travel firm but rather a credit cards domain Agent-based systems are detrimental to an efficient web infrastructureAgent-based systems are detrimental to an efficient web infrastructure Macro Economic Environment Macro Economic Environment Travel industry is hard hit financially during recessionary and economic downturnsTravel industry is hard hit financially during recessionary and economic downturns

4. Recommendations (one example) Internalize Web Based Services for Customer Services Internalize Web Based Services for Customer Services American express should develop an internal IS unit rather than seek outside resources or partnerships for travel applications. This would eliminate the need to diversify into unknown and less profitable business areasAmerican express should develop an internal IS unit rather than seek outside resources or partnerships for travel applications. This would eliminate the need to diversify into unknown and less profitable business areas The company should align with a reputable web resource for marketing purposes then branch out to coexist with a major web portal like Yahoo or AOL. This strategy would allow Amex to direct important resources towards a customer assistance model; which plays out to their core strengthThe company should align with a reputable web resource for marketing purposes then branch out to coexist with a major web portal like Yahoo or AOL. This strategy would allow Amex to direct important resources towards a customer assistance model; which plays out to their core strength