The Black And The White, The Rich And Poor, And Men And Women

The black and the white, the rich and the poor, and men and women were terms that are commonly used to illustrate disparity of people. Race, class, and gender were used for special purposes in the United States from the American Revolution through the Civil War. They were not only used to limit the rights of some groups of people, but also to extend the benefits of others. African Americans, Native Americans, and the Chinese were some of the groups of people that best portray the inequality during this period of time. The usage of race, class, and gender had brutal effects on these groups, and it drove them to take many actions to overcome the inequality. By using race, gender, and social class issues, certain groups, who focused on the†¦show more content†¦Thus, they had to do what God made them do, which was to lead the world and rule everybody. They had to fulfill their duties by expanding, possessing more land, and taking civilization to new territory. The Declaration of Independence seemed to be set up in order to secure life, liberty, and happiness of citizens, but that was not really what was believed. The Constitution was created by powerful white men to benefit themselves. All the power was in the rich white elites hands, while the other groups of people, such as the poor whites, African Americans, Native Americans and other immigrants, had almost absolutely no rights. The rich whites created the legislation and all policies. Many laws were passed to please and benefited the government and its parties. In addition, laws were passed one after another to deny the rights of those low class people. The poor whites, Native Americans, African Americans, and other immigrants were categorized as non-white, which made them unqualified to be a citizen. Moreover, those who were citizen could not vote if they did not own any property. Not being able to vote meant that they could not stand up and speak for their own. Thus, they were oppressed and exploite d by the powerful groups: governments and its elites. The issues of slavery led to racism in the United States. In order to treat slaves like property, slave owners had to be racist. People who worked in the office for the government were all rich

Professionalism Military History - 1272 Words

The means or in which a man gains his livelihood (1 â€Å"Webster’s dictionary†) should be one of the most important things in a man’s life. It is often overlooked on yourself but always noticed by others. The method of how a man should conduct himself in pursuit of a profession is professionalism. It is a roughly defined word which means it is often misused. First there are a set of guidelines about professionals which apply in all realms, Second professionalism has deep roots in military history as well as its hero’s, and lastly there are many ways professionalism is related to the recon community in particular. One of my friends is a public speaker and old business associate of mine laid out the guidelines to being a professional. (2†¦show more content†¦Some examples of this are. â€Å"Every action done in company ought to be with some sign of respect to those that are present.† Similar to the fifth principal of praising your peers. â€Å"Keep clean shaven, teeth clean, and nails short without showing great concern for them.† This rule is still followed by the military today. This man thought of things like this as a fourteen year old. He built his career in the military on being the most professional man around. Then when we won the war against Great Brittan because of his unmatched professionalism everyone wanted him to be in charge. Similar qualities and traits can be found in many of military history’s great icons because they are timeless guidelines that always satisfy the other party and put them at ease. Professionalism is important to the military and applies more so to the special forces of the military because of the higher standards they are held to. The Recon community has a tremendous reputation to uphold because of those who went before them. In the recon creed it specifically says â€Å"through professional pride, integrity, and teamwork I shall be the example for all marines t o emulate. If it were not for these high standards of professionalism in the recon community then there would be no reason why commanders wouldShow MoreRelatedAmerican Civil-Military Relations: Argumentative Essay1595 Words   |  7 PagesModule C160- American Civil-Military Relations Submitted by MAJ David Nicoll The purpose of the argumentative essay is to assess written communication skills. The challenge is to persuade the reader of the validity of the thesis presented and convince the reader of the argument. It is also to argue why it will assist students in their duties as a Field Grade officer over the next 10-years of their career and the importance for professional military education (PME). 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Yoh†¦ Read MoreBattle : A History Of Combat And Culture1465 Words   |  6 PagesComparative Book review John Lynn, Battle: A History of Combat and Culture (Boulder, CO: Westview, 2003) Victor Davis Hanson, Carnage, and Culture: Landmark Battles in the Rise of Western Power (New York: Doubleday, 2001) Victor Davis Hanson is a former classics professor, an American military historian, a scholar of ancient warfare and a columnist. He graduated from Selma High School, he also received a BA from the University of California in 1975 and later got his Ph.D. in Classics from StanfordRead MoreThe Legacy Of Victor Davis Hanson1500 Words   |  6 Pages Victor Davis Hanson is a former classics professor, an American military historian, a scholar of ancient warfare and a columnist. He graduated from Selma High School, he also received a BA from the University of California in 1975 and later got his Ph.D. in Classics from Stanford University. 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Marine NCO’s since then had created a tradition called â€Å"Blood Striping.† Blood striping is the act of literally inflicting a blood stripe on a newly promoted NCO’s legs through means of punchingRead MoreEssay about Police Professionalism and Responsibility1363 Words   |  6 PagesLAW ENFORCEMENT PROFESSIONALISM AND RESPONSIBILITIES American Military University April Marshall CMRJ201 Criminal Justice Administration Final– Research Paper Professor Charles Russo Abstract The purposes of this paper are identity and explan in depth history of Law Enforcement professionalism and responsibilities. The analytical content and data collected for this paper was obtained from a literature review of peer reviewed scholarly articles within the American Military University’s onlineRead MoreThe United States Navy1326 Words   |  6 Pagesinternational aggression. They fought the good fight when necessary. Acted as a willing source of assistance to those in crisis or need around the globe. And moved humanity forward through everything from action to innovation† (Navy History, 2014). One might think of our military as a business culture but if they set down and really take a good look at it they will see that the Navy is made up of many different cultures within itself not just including personal cultures but business cultures as well. Read MoreMilitary Bearing1023 Words   |  5 Pagesâ€Å"Military Bearing† and how it affects the Army as a whole Bearing, put simply, is the appearance and demeanor of a person throughout the activities and circumstances that an individual is seen or observed. An individual is largely judged by others through the bearing that the individual exudes as he goes about his daily affairs, and thus it is very important that the person shows a bearing of competence and professionalism at all times. Militaries since the beginning of recorded history have set

Auditing Theory and Risk Assessment Practice Free Sample

Questions: 1. List and discuss several factors that would have contributed to an increased subjective risk assessment at the financial statement level. Also, identify which of these factors may be identified during the strategic business risk assessment. 2.Inherent risk factors that would have contributed to an increased inherent risk assessment at the account balance level. 3.Assessment of the issue of going concern as either low, medium or high. Answers: Introduction Examination of business financial operation through auditing has been a major concern in the line of business. For any business entity to identify its level of growth and development there must be a proper assessment conducted in the firm. Most of the operations in the economic sector highly depend on the nature of auditing, therefore, several principles have then been developed to assist in the elimination of risks and perils which may be accrued during auditing (Lpez and Peters 2012). These hypothesis have been designed by worlds financial reporting framework establishments such as GAAP and IFRS to direct auditing practices. Several policies have also been developed to assist auditors in making corrections on the risks which may face them during financial assessment. The way of examining and duty of review group guarantees the accomplishment of an organization inside the business or worldwide business sector. In the later past, hypotheses like going concern has been produced. Usage and routine of these stipulated issues stay in the hands of examiners and the leading group of administration of any given entity. The extent of this paper explores the use of these present issues in One.Tel Company in Australia. The organization has been in operation in media transmission industry since May 1995 in the wake of being propelled in Sydney. The paper further examines natural danger in the organization budgetary reports and the issue of going concern. 1. Understanding of Inherent Risk Inherent risk is one of the review dangers oversaw under risk evaluation. Review hazard includes three sorts of dangers. These dangers are inherent danger, control dangers and the detective hazard. Assessment risks is considered as the result of the three dangers as shown previously. It might be experienced amid evaluating execution which for this situation is One.Tel Telecommunication Company. Inherent risk is subsequently a segment of the review which comes as a consequence of material misquote inside the money related articulation. Incorrectness happens in an organization's assessment reports due to underutilization of important control measures (Chung et al. 2012). Inherent dangers emerge for the most part because of the mistake of oversights in the adjustments of the organization books of records. On account of One.Tel Company, intrinsic dangers may have emerged because of disappointments and poor utilization of the control measures. The event of disappointments because of inher ent might be as an aftereffect of oversight and fake practice during auditing. Inherent risk can be high or low within an organizations financial reports depending on the prevailing business environments. Some of the factors which may lead to high inherent risks are as discussed below. Factors Which Affect Inherent Risk at the Financial Report Level Legitimacy of Company Administrators The expansion in inherent risk in One.Tel Telecommunication Company might be as a consequence of the inadequacy of the leading group of the Directorate. The organization's administration is made of nine individuals having distinctive powers and benefits. The board is made up of five none-official individuals shaping up most of the board individuals. There are other four official individuals having a full order to everything inside the organization (Coetsee 2010). The rate at which the inherent risk is increasing in One.Tel media transmission organization is high as indicated by the case of study. The board of management is committed to a great deal of obligations which includes: approval of corporate and budgetary procedures, distinguishing and addressing issues of great concern confronting One.Tel as an organization, checking on and observing administration procedures and reporting instruments, regulating money related execution and arrangement of the senior administration group. Th e organization has developed as far as possible where the administration group of nine personalities can't meet every one of their commitments. The chiefs will probably conceal their poor notorieties, along these lines, neglecting to create important articulations amid evaluating prompting an expansion in the characteristic danger due to poor administration. Management Understanding, Alertness and Instabilities During Financial Assessment Period The wastefulness in the administration of the organization and absence of learning encourages wrong readiness of the budgetary report prompting an increment in the inherent risk. Once the examiner recognizes standard workforce turnover in basic administration areas, there is possibilities of arising inherent risk in light of the fact that honest identities are prone to leave their official positions as opposed to proliferate some extortion. This generally happens when the organization extends quickly as reflected on account of One.Tel Telecommunication Company (Herda and Lavelle 2012). Unusual Pressure on Organization Management There may be inducements for administration to misstate the financial report increasing the inherent risk. The incentives in can be either from the internal environment or the external environment (Kerler and Brandon 2010). The incentives may be cash flow problems, poor liquidity rationing, poor operating results due to management limitation and work overstretch and connection of management compensation pay schemes tied to share capital and earnings. This may lead to an increase in the inherent risk since management may be induced to misstate operating and financial statements to acquire some bonus. Nature of the Kind of Venture One.Tel is Operating Various issues have been acknowledged in the business or industry in which One.Tel Company operates. The company has a complex investment organization, which is an aid to increase inherent risk. The existence of related-party transactions such as the company shareholders would also increase inherent risk as the operations are not with the self-regulating party (Al Nawaiseh and Jaber 2015). The company has got capital share transactions which require a lot of financial know-how to audit since such operations are complicated. The company operates in larger geographical context and generates a lot of income through sales. In review of the given case, One.Tel Company gained huge sum of money in the previous trading period. The company received a total income of $687.2 million where $429.4 million revenue came from Australia, $144.7 million UK, $15.1million France, $ 36.6 Netherlands, Hong Kong $39.2 and $ 13.2 million from other trading regions. This indicates how Telecommunication compa nies have probably recompenses until they inaugurated a standing, and a trustworthy income source inherent risk will keep on rising. Telecommunication industry is facing a challenge which requires a company in the industry to apply controls mechanism to be stable and remain relevant in the industry. Since new economies and unstable economies result in high inherent risk than stable economies. Factors Affecting the Industry in which the Entity Operates Variations in commercial and competitive environments would be anticipated to have a significant influence on the inherent risk of an entity like one.tel in the telecommunication industry. Factors such as imbalance in the revenue and growth in some telecommunication service providers may lead to a rise in the inherent risk during financial statement preparations. Throughout risk assessment stage the company audit team goes through the risks identified like the inherent risk discussed above. The team or the auditor evaluates the factors of the risks through fair evaluation (Martin 2013). Evaluation of risks results into two types of risks which in this case is an inherent risk. The identified risk is a component of material misstatement of the financial statement motivated by several factors. Factors relating to fraud can be identified during strategy development process whereas those factor that increase inherent risk due to fraud identifiable via the AU section 316. Accounts likely to Require Adjustment When the books of accounts are being adjusted to fit to the demands of business in the recent trading period there is likeness of errors to occur. These errors may be due to omissions, oversight, imaginary conclusions by accountants or as a result of errors carried forward. In such situations the rate of inherent risk is considered to be high as a product of errors. Complexity of Fundamental Transactions If the deal during a trading period is complicated, it is likely that there will be an increase in inherent risk. In consideration of One.Tel Telecommunication Company, the books of accounts indicates complex types of transactions such as the shareholder's inequity, reserves and dividend. Challenging transactions are prone to errors as they are difficult to understand leading to high inherent risk at the accounting level. Conclusion Involved in Determining Account Balances The kind of judgment made by the auditor during the process of balancing of auditors is likely to influence inherent risk. In case the account report on a given transaction may be induced by some factors within the company (Reichelt and Wang 2010). These judgments can be affected by the type of operation and the management pressure. Susceptibility of Assets to Loss or Misappropriation The susceptibility of the companys assets to loss or misappropriations leads to increased inherent risk at the accounting level. During the transaction entries, it is evident that simple misappropriation of an asset result into accelerated inherent risk. For instance taking misplacement of an asset to liability may lead to an increase in the inherent risk (Herd and Lavelle 2014). The Occurrence of Unusual and Complex Transactions, Particularly at or near Year-End The manifestation of substantial trades during the trading period has a possible increase the inherent risk (Skinner and Srinivasan 2012). When an unfamiliar transaction occurs precisely towards the end of a trading period, there are high chances of errors in the books of accounts. Such different operations may be a challenge to the auditor and accountants and may result in high inherent risk. Transactions not Subject to Usual Processing The degree of an upturn in the inherent risk is high at the bookkeeping level when we make dealings which require unfamiliar processing. In the event of such case the auditor of a business entity like One.Tel Telecommunication Company may make mistakes leading to an increase in inherent risk as a result of limited knowledge of such transactions. 3. The ongoing concern builds on the auditors' assessment whether low, medium or high in correlation to inherent risk and control risk (Francis 2011). The detection risk during the evaluation is maintained at the lowest level to keep the audit risk at the recommended rate. Minimum detection risk can be accomplished through scope test enhancement. Due to the argument, it is evident that the going concern can be either high, medium or low based on the three type of risk. The issue of going concern in relation to One.Tel Companys case can be considered to be high. Inherent in the companys financial statement is deemed to be high since the company operates in a highly controlled industry. In this situation, the companys going concern is considered to be high (Chang, Dasgupta and Hilar 2009). Other factors such as the detective risk and control risk are seen to be high according to the nature of the business entity. In application of the knowledge acquired it is clearly evident that the g oing concern can be high, low or medium. Conclusion It is clear from the above discussion that the rate of going concern depends more on the kind of risks in the financial statement. In the event of low audit risk, the nature of going concern remains low whereas when the types of a risk is medium or high, the going concern is either low or high. Even though the assumption may be correct, it is hard to regulate the following circumstances that may lead to the continuous application of a going concern (Knechel et al. 2012). The nature of a going concern in accompany depends on the application of the stipulated financial framework. The above discussed issues should therefore be given proper assessment as per the financial stipulated framework of GAAP and IFRS. References Al Nawaiseh, M.A.L. and Jaber, J., 2015. Auditing subsequent events from the perspective of auditors: study from Jordan. International Journal of Financial Research, 6(3), p.p78. Chang, X., Dasgupta, S. and Hilary, G., 2009. The effect of auditor quality on financing decisions. The Accounting Review, 84(4), pp.1085-1117. Chung, J.O., Cullinan, C.P., Frank, M., Long, J.H., Mueller-Phillips, J. and O'Reilly, D.M., 2012. The auditor's approach to subsequent events: Insights from the academic literature. Auditing: A Journal of Practice Theory, 32(sp1), pp.167-207. Coetsee, D., 2010. The role of accounting theory in the development of accounting principles. Meditari Accountancy Research, 18(1), pp.1-16. Francis, J.R., 2011. A framework for understanding and researching audit quality. Auditing: A journal of practice theory, 30(2), pp.125-152. Herda, D.N. and Lavelle, J.J., 2012. Auditor commitment to privately held clients and its effect on value-added audit service. Auditing: A journal of practice theory, 32(1), pp.113-137. Herda, D.N. and Lavelle, J.J., 2014. Auditing Subsequent Events: Perspectives from the Field. Current Issues in Auditing, 8(2), pp.A10-A24. Humphrey, C. and Miller, P., 2012. Rethinking impact and redefining responsibility: The parameters and coordinates of accounting and public management reforms. Accounting, Auditing Accountability Journal, 25(2), pp.295-327. Iwu, C.G. and Xesha, D., 2011. Used Bookstore as a Vehicle for Improved Learning and Development: The Case of a South Africans Tertiary Institution. Janvrin, D.J. and Jeffrey, C.G., 2007. An investigation of auditor perceptions about subsequent events and factors that influence this audit task. Accounting Horizons, 21(3), pp.295-312. Knechel, W.R., Krishnan, G.V., Pevzner, M., Shefchik, L.B. and Velury, U.K., 2012. Audit quality: Insights from the academic literature. Auditing: A Journal of Practice Theory, 32(sp1), pp.385-421. Lpez, D.M. and Peters, G.F., 2012. The effect of workload compression on audit quality. Auditing: A Journal of Practice Theory, 31(4), pp.139-165. Martin, R.D., 2013. Audit quality indicators: Audit practice meets audit research. Current issues in auditing, 7(2), pp.A17-A23. Reichelt, K.J. and Wang, D., 2010. National and office specific measures of auditor industry expertise and effects on audit quality. Journal of Accounting Research, 48(3), pp.647-686. Skinner, D. J. and Srinivasan, S. 2012. Audit quality and auditor reputation: Evidence from Japan. The Accounting Review, 87(5), 1737-1765. Thompson, T.R., 1960. Problems of Auditing Computing Data: Internal Audit Practice and External Audit Theory Section 1: Internal Audit. The Computer Journal, 3(1), pp.10-11. Unegbu, A.O., 2014. Theories of Accounting: Evolution Developments, Income-Determination and Diversities in Use. arXiv preprint arXiv:1411.4633.

The Importance of Music Nowadays Research Paper Example

The Importance of Music Nowadays Paper Music has accompanied people from time immemorial. In ancient times, music was part of religious ritual; in the Middles Ages, the first polyphonic compositions were written to praise God, and from the Renaissance, the world has seen an enormous development of different music forms. Today, you can hear music everywhere, at a concert, at home and even in a supermarket. It is difficult to imagine what the world would be like if there were no music. In this essay, I will examine this subject from the point of view of the professional musician and the music teacher, and to make the picture more complete, I will give my views. What, then, is music or how is this concept understood? If you ask a graduate of a conservatoire, or consult an encyclopaedia, you will know that music is the art of combining sounds into a unified whole, usually for an aesthetic purpose. This definition means that any piece of music has to be written by someone. For most of us, however, music is something we take for granted. We will write a custom essay sample on The Importance of Music Nowadays specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on The Importance of Music Nowadays specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on The Importance of Music Nowadays specifically for you FOR ONLY $16.38 $13.9/page Hire Writer You can buy a CD for a tiny fraction of your salary, or using your computer, at the flick of a switch, you can get the latest hits for free. Therefore, it is no wonder that the status of music has diminished substantially in the last fifty years. Professional musicians – who, as usual in such cases, should earn fame and fortune – are fighting a losing battle with ever cheaper sound systems. For most of them, it is not easy to get an opportunity to play live, let alone to find a place in a classical orchestra. Only few are lucky enough to make a career and big money; the rest end up as music teachers or have to retrain for jobs which will make them employable. As far as music teachers are concerned, whether retrained or otherwise, they cannot understand why so little emphasis is placed on aesthetic values in education today. They feel very disappointed as they see music giving way to mathematics and foreign languages. They claim that in the long run music can develop children’s creativity and imagination. Another benefit of musical skills, according to teachers, is making new friends. Music, they add, is a universal language which bridges the gaps in human relationships. It is often said that people from opposing factions are on common ground when they play or talk about music. Having presented the views of professional musicians and music teachers, I want to offer my thoughts on the subject. I have attended a music school, and I have to say that those were very important years in the formation of my character, temperament and stamina. On many occasions, being dejected and dispirited, I tried to seek and then I found refuge in my music. Also, through music, I have made a lot of friends and been to many places in the world. Last but not least, playing music is a good exercise for your brain and body and is more enjoyable than listening to it. The status of music would be raised if we made a concerted effort to give it due attention: music lessons as important as mathematics and languages, more financial support to professional musicians, less publicity surrounding the release of a new hit and more programmes about classical music.

Free Essays on The Adventures Of Huckleberry Finn Dialect

and poorly constructed sentances, â€Å"Git up! What you ‘bout.† They mostly conversed only with their fellow workers and children, and were not needing a formal education. Somewhere between these two stereotypes belongs the character Huckleberry Finn. He was raised by his abusive alcoholic father, learning the ways of solitude in nature and survival on the river. Later in his childhood though, he was taken in by a caring, upper class woman who nurtures him like the mother he never had, teaching him the ways of the bible and school. She also added to his kind personality. Huck is raised with both sides of lifestyles; half rich, half poor. This gives him the unique personality he has, being unconforming yet very caring. Twain’s knowledge of these not only makes his books more interesting, but accurate in the presentation of American cultures.... Free Essays on The Adventures Of Huckleberry Finn Dialect Free Essays on The Adventures Of Huckleberry Finn Dialect The land of the Mississippi is well known for it’s rich heritage and unique dialect. Mark Twain had a good understanding of this, and lifetime of experience with it. He knew a person’s history could roughly be predicted by the manner of their speaking. Such as rich, well bred, educated citizens often had a voice containing a large vocabulary, finely pronounced words, and produced easily understood sentences. This gave them the essence of ellegence and class, and as Twain put it, â€Å"He was well born, and that’s worth as much in a man as it is in a horse.† On the other end of citezenship was the un-schooled, un-privilaged, and poor slaves and servents. Their upbringing was focused less on impressing people with their intelligense, and more on survival, tolerance, and hard work. Their speech was hardly understandable. It consisted of broken words and poorly constructed sentances, â€Å"Git up! What you ‘bout.† They mostly conversed only with t heir fellow workers and children, and were not needing a formal education. Somewhere between these two stereotypes belongs the character Huckleberry Finn. He was raised by his abusive alcoholic father, learning the ways of solitude in nature and survival on the river. Later in his childhood though, he was taken in by a caring, upper class woman who nurtures him like the mother he never had, teaching him the ways of the bible and school. She also added to his kind personality. Huck is raised with both sides of lifestyles; half rich, half poor. This gives him the unique personality he has, being unconforming yet very caring. Twain’s knowledge of these not only makes his books more interesting, but accurate in the presentation of American cultures....

Biography of Hans Hofmann, Abstract Expressionism Pioneer

Biography of Hans Hofmann, Abstract Expressionism Pioneer Hans Hofmann (March 21, 1880 - February 17, 1966) was an American painter born in Germany. He was one of the foremost pioneers of the abstract expressionist movement. As an art instructor for four decades, he influenced some of the greatest painters of the 20th century. Fast Facts: Hans Hofmann Occupation: Painter and art teacherBorn: March 21, 1880 in Weissenburg, BavariaDied: February 17, 1966 in New York, New YorkSpouses: Maria Wolfegg (died 1963), and Renate Schmitz (married 1965)Selected Works: The Wind (1942), Pompeii (1959), Song of the Nightingale, (1964)Key Accomplishment: 1963 New York Museum of Modern Art retrospective that toured three continents.Notable Quote: In nature, light creates the color. In the picture, color creates the light. Early Life and Education Born to a German family in Bavaria, Hans Hofmann demonstrated a keen interest in science and mathematics from an early age. At age sixteen, he followed his fathers career path and took a job with the government. The younger Hofmann worked as an assistant to the director of Public Works. The position allowed him to indulge his love of mathematics while patenting a wide range of devices, including a portable freezer for military use and a radar system for sailing ships. During his government employment, Hans Hofmann began to study art. Between 1900 and 1904, while living in Munich, he met his future wife, Maria Miz Wolfegg. He also befriended Philipp Freudenberg, owner of the high-end department store Kaufhaus Gerson and a passionate art collector. Still Life. Geoffrey Clements / Getty Images Through Freudenbergs patronage over the next decade, Hans Hofmann was able to move to Paris with Miz. While in France, Hofmann immersed himself deeply in the avant-garde painting scene. He met Henri Matisse, Pablo Picasso, Georges Braque, and many others. As his reputation grew, Hofmanns painting Akt (Nude) appeared in the 1908 Berlin Secession show. Leaving Germany When World War I broke out in 1914, Hofmann and his wife were forced to leave Paris and return to Munich. The government disqualified him from military service due to a respiratory condition, and he opened an art school in 1915. In 1924, he married Miz. Hofmanns reputation as an art instructor reached overseas, and in 1930, a former student invited him to teach the 1930 summer art session at the University of California at Berkeley. After spending two years traveling between the U.S. and Germany to teach and work, he postponed a return trip to Germany for the foreseeable future. Hans Hofmann lived in the United States for most of the rest of his life, applying for U.S. citizenship in 1938 while Europe was barely a year away from the start of World War II. In 1934, Hans Hofmann opened his art school in New York and offered classes for the next 24 years. In the summer, he moved his instruction to Provincetown, Massachusetts. He earned tremendous respect as an instructor working as a mentor to Helen Frankenthaler, Ray Eames, and Lee Krasner, as well as becoming close friends with Jackson Pollock. Hans Hofmann (American, b. Germany, 1880-1966). Fantasia, 1943. Oil, duco, and casein on plywood. 51 1/2 x 36 5/8 in. (130.8 x 93 cm). Gift of the artist. Berkeley Art Museum, University of California. Photo: Benjamin Blackwell. Â © Renate, Hans Maria Hofmann Trust / Artists Rights Society (ARS), New York Abstract Expressionism Hans Hofmann was the only painter of the group of New York-based artists given credit for popularizing abstract expressionism who was directly involved with the Paris avant-garde before World War I. With that connection, he bridged the gap between two of the most influential communities of artists in the 20th century and inspired a generation of painters. In his own work, Hofmann explored color and form. He claimed that art could be given its voice by distilling it to its basics and removing unnecessary material. Among his prominent pieces was The Wind. For years, many historians believed that seeing paintings like it was a key influence on Jackson Pollocks development of the drip painting technique. More recent examination has led art historians to believe that Hofmann and Pollock were experimenting with poured paint at the same time. The Wind (1942). University of California, Berkeley Art Museum In 1944, Hans Hofmann received his first solo gallery show in New York. Art critics celebrated it as a step forward in the exploration of the abstract expressionist style. His work during the 1940s ranged from playful self-portraits executed with bold strokes to colorful geometric shapes that echoed the work of European masters Hans Arp and Joan Miro. Later Work After a retrospective at the Whitney in New York in 1957, Hofmann experienced a late-career renaissance of interest in his work. He quit teaching in 1958 and focused on the creation of art for the final years of his life. Artists and critics alike celebrated his work around the world. In 1963, New Yorks Museum of Modern Art mounted an even more extensive retrospective that traveled across the U.S., South America, and Europe. During the 1960s, Hofmann endured significant sadness due to the passing of many of his artist friends. In response to the deaths of Franz Kline and Jackson Pollock as well as others, he dedicated new pieces to their memory. The most significant blow occurred in 1963 with the passing of Miz due to a heart attack. In the fall of 1965, Hofmann married Renate Schmitz, a woman 50 years his junior. They remained together until his death from a heart attack on February 17, 1966. Hans Hofmann (American, b. Germany, 1880-1966). Memoria in Aeternum, 1962. Oil on canvas. 84 x 72 1/8 in. (213.3 x 183.2 cm). Gift of the artist. The Museum of Modern Art, New York. Â © 2010 Renate, Hans Maria Hofmann Trust / Artists Rights Society (ARS), New York Educator Hans Hofmann was arguably the most influential art instructor of the 20th century. He influenced a generation of young European artists through his teaching in the first years after World War I. Later, particularly in the 1940s, his instruction inspired a generation of American artists. Hans Hofmanns School of Fine Art in Munich focused heavily on the ideas of Paul Cezanne, Wassily Kandinsky, and the Cubists. He offered regular one-on-one critiques, which were a rarity in art schools of the time. Some historians count Hofmanns Munich school as the first ever school of modern art. One of Hofmanns most lasting contributions to the understanding of art was his push/pull theory of spatial relations. He believed that contrasts of colors, forms, and textures created a push and pull in the mind of the viewer that must be balanced. Hofmann also believed that social propaganda or history lessons put an unnecessary burden on paintings and did not make them better works of art. The additional content worked against a vivid depiction of space and the pure magic of creating two-dimensional art on canvas. Legacy As an instructor and mentor, Hans Hofmann was at the center of some of the most significant movements in modern art from the turn of the 20th century to the 1960s. His avid interest in the colorful work of Henri Matisse took the young Hofmann away from a focus on cubism that ultimately led to his work with slabs of color in his mature abstract expressionist work of the 1950s and 1960s. Sources Dickey, Tina. Color Creates Light: Studies with Hans Hoffman. Trillistar Books, 2011.Goodman, Cynthia. Hans Hofmann. Prestel, 1990.

Operating systems and networking Coursework Example | Topics and Well Written Essays - 1250 words

Operating systems and networking - Coursework Example BEFORE submission, each student must complete a faculty coursework cover sheet obtainable from the Student Office. This assignment is being marked by student number, please ensure that you complete the correct cover sheet. Notes: Late penalties You must meet all deadlines set. Failure to do so will result in a penalty. The usual deadline time is 1pm on the stated day – ALL work received after this time will be stamped LATE by Student Office staff. Work submitted late but within a week of the deadline will be capped at 40% and receive a grade of LP (Late Pass) unless it is not of a passing standard in which case it will receive a grade of LF (Late Fail). Work submitted beyond a week of the deadline without approval will get 0% with a grade of F0. If, however, you have a serious problem which prevents you from meeting the deadline you may be able to negotiate an extension in advance. In the first instance you should contact the Student Liaison Officer, Holly Rook in the Student Office for advice. However any extension will need to be obtained from your Module Leader who will sign your mitigating circumstances form and agree a new hand in date. Your work will then be marked without penalty. Use of Unfair Means You are reminded of the University’s plagiarism regulations (http://student.kingston.ac.uk/C6/Plagiarism/) and that the work you submit for assessment should contain no section copied in whole or in part from any other source unless where explicitly acknowledged by means of proper citation. Question I: Instruction Set Architecture (20 marks) 1.1. Define Instruction Set Architecture (ISA). Use examples to assist your answer. (5 marks) I.S.A is an acronym for â€Å"instruction set architecture â€Å"and it serves as an interface between the software and hardware, and is that section of a processor which is visible to the programmer .Various important terms are interrelated with this concept which includes operand, its size, its location and its type. Various important types of I.S.A: General Purpose Register (G.P.R): Operands in this case are mostly the registers or memory location Stack: The operand is implicitly on top of the stack. Accumulator: one of the operand is the accumulator Each of the above have their own strengths and weaknesses .Recently most processors are General Purpose oriented .Over period of time registers use has made things faster and easy .Examples of G.P.U are Motorola 86xxx,IBM 360 Various extensions: RISC: Reduced Instruction Set Architecture .This form of Architecture introduces pipelining concept and has large number of registers compared to CISC. It lays emphasis on the software; with lower cycles per second .The embedded systems are prime example of this type of architecture processor, especially the gaming consoles CISC: Complex Instruction Set Architecture, example in this case is Intel architecture of 80 x86 and the most ubiquitous Pentium Family processors are all CISC. Processor performs most of the instructions operations. It lays emphasis on the hardware, and has higher cycles per second 1.2. A processor has a 32-bit instruction format with the following fields: opcode: 8 bits ra: 6 bits rb: 6 bits rc: 6 bits rd: 6 bits Where ra, rb and rc specify three input registers and rd specifies one destination register. If there is a single register file to store the identifications of all registers, how many

The United States should intervene in the Syrian Civil War to Essay

The United States should intervene in the Syrian Civil War to overthrow the Assad regime - Essay Example ed out not to be the case because, despite its repressive nature, the Assad government still has a lot of support from the military as well as some of the Syrian population. This is the reason why the United States is duty bound to intervene in this conflict on the side of the rebels and overthrow this regime to end it. It is estimated that more than sixty thousand Syrians have lost their lives since the beginning of the conflict and such a high number of deaths is not reasonable. This number of deaths for the sake of a few men holding on to power is unacceptable and the United States, as the defender of democracy, should lead the way in overthrowing them (Friedman). Syria is one of the countries of the Middle East whose stability and strategic position is essential for the maintenance of stability in the region. The conflict that is currently going on in this country is likely to destabilize the region due to the influx of refugees from Syria to its neighbors as well as the spilling over of the conflict to such volatile countries as Lebanon. In order to prevent such an occurrence in a region where it has many interests, it is essential for the United States to intervene this early in the conflict to establish stability. The promotion of democracy has always been one of the reasons why the United States has seen fit to intervene in the affairs of other states. In this case, Syria should not be an exception mainly because its government has for the last fifty years, been among the most repressive in the world. It is only logical for the United States to intervene because this opportunity promotes its democratic ideals to a part of the world that has until recently, experienced little of it (Friedman). Among the most important reasons for the intervention of the United States in Syria is to ensure that a government, which is friendly to the West, is put in place. The Assad regime has proven itself to be against the strategic interests of the United States and its

Scientific Writing Essay Example for Free

Scientific Writing Essay Scientific writing -is a form of technical writing that reports scientific observations and results in a manner governed by specific conventions. Examples and Observations (Definition #1): Sustaining a dead body until its organs can be harvested is a tricky process requiring the latest in medical technology. But its also a distinct anachronism in an era when medicine is becoming less and less invasive. Fixing blocked coronary arteries, which not long ago required prying a patients chest open with a saw and spreader, can now be accomplished with a tiny stent delivered to the heart on a slender wire threaded up the leg. Exploratory surgery has given way to robot cameras and high-resolution imaging. Already, we are eyeing the tantalizing summit of gene therapy, where diseases are cured even before they do damage. Compared with such micro scale cures, transplantswhich consist of salvaging entire organs from a heart-beating cadaver and sewing them into a different bodyseem crudely mechanical, even medieval. (Jennifer Kahn Stripped for Parts. Wired, March 2003. Reprinted in the Best American Science Writing 2004, edited by Dava Sobel. HarperCollins, 2004) On Explaining Science 1. The question is not should you explain a concept or process, but how can you do so in a way that is clear and so readable that it is simply part of the story? 2. Use explanatory strategies such as . . . Active-voice verbs Use the Active Voice . . . Most of the Time When a verb is in the active voice, the subject of the sentence is also the doer of the action. Active Voice- John picked up the bag It is in the active voice because the subject, John, is also the thing or person doing the action of picking up. Passive Voice -The bag was picked up by John The subject of the sentence, bag, is the passive receiver of the action. . . . Analogies and metaphors Analogies- comparison between two things that are similar in some way, often used to explain something or make it easier to understand. Metaphors- the use to describe somebody or something of a word or phrase that is  not meant literally but by means of vivid comparison expresses something about him, her or it  ex. Saying that somebody is a snake. Backing into an explanation, that is, explaining before labeling Selecting critical features of a process and being willing to set aside the others, as too much explanatory detail will hurt rather than help. 3. People who study what makes an explanation successful have found that while giving examples is helpful, giving nonexamples is even better.  Nonexamples are examples of what something is not. Often, that kind of example will help clarify what the thing is. If you were trying to explain groundwater, for instance, you might say that, while the term seems to suggest an actual body of water, such as a lake or an underground river, that would be an inaccurate image. Groundwater is not a body of water in the traditional sense; rather, as Katherine Rowan, communications professor, points out, it is water moving slowly but relentlessly through cracks and crevices in the ground below us. . . . 4.Be acutely aware of your readers beliefs. You might write that chance is the best explanation of a disease cluster; but this could be counterproductive if your readers reject chance as an explanation for anything. If you are aware that readers beliefs may collide with an explanation you give, you may be able to write in a way that doesnt cause these readers to block their minds to the science you explain.

Expanding Feminist Activism Essay -- Feminism Essays

Expanding Feminist Activism I chose this topic mainly because of interest. When thinking about the idea of feminism aside from all stereotypes one would think the struggle for women's rights. The idea sounds unified in saying and one would assume most women were involved. For a long time the women's movement applied to just white upper class females. I found a source on extremist women, which focused on the powerful ideas of white supremacy. This article was geared toward white women, and the goal trying to be achieved was equal status as men in the work place, and no rights for minorities. Not surprisingly many of these participants were in the Ku Klux Klan. What is funny to me is that while these women are making this "powerful" stand for women and humanity they are also contradicting themselves as well. How can u have a fight for justice and equality, when not everyone is allowed to participate? I found another source which was called Feminism is For Everybody written by bell Hooks. Its focus was on her opin ion of the feminist movement and how she felt it too was focused on the white middle class. When the movement opened up and extended themselves to other groups there was still a large problem. Many of them assumed that every other group was fighting for the same thing, and if they weren't well they should change views because there way was the "right" way. What's important with this situation is not every group suffers the same, there are similarities but the end goal can sometimes be different. The first sight was one was called, Expanding the boundaries of the Women's movement: Black feminism and the struggle for welfare rights. This article is critical; it paints a picture of the needs and wants of feminist from Afric... ...This is both helpful and interesting because we are once again to see different culture address different issues. Their focuses are on making a stronger bond and unify the women. Russo, Ann. White Women, Antiracism, and feminism. Indiana, 1991. This book was one which we read in class that discusses the ideas and points of views on Russo and the ideas of white supremacy. This was actually very helpful because it brought back past and possible future ideas of white supremacy and racism. Voices from the Gaps. Bell Hooks. (Feb. 1998) . Online Voices from the Gap. Internet. February 12, 1998. Available: http://www.voices.ccla.umn.edu/authors/bellhooks.html This website mainly focuses on more background information of feminism and her views. It also provides different websites that one could search for further information. This is both insightful and helpful.

The American Express Card

9-509-027 REV: APRIL 22, 2011 JOHN A. QUELCH JACQUIE LABATT The American Express Card Marketing is fully integrated into our overall strategy. Our largest investor, Warren Buffett, is very focused on brand health and customer metrics. — Kenneth I. Chenault In April 2008, Jud Linville, president and chief executive officer of U. S. Consumer Services at American Express Company, was preparing for a meeting with Ken Chenault, American Express’s chairman and chief executive officer since 2001, and Al Kelly, president of American Express Company.The purpose of the meeting was to discuss further growth prospects in the United States for the American Express consumer card business while maintaining the brand’s premium positioning. The performance of the American Express card, launched 50 years earlier in 1958, had been remarkable. By 2008, there were 52 million American Express cards in circulation in the U. S. , held by 41 million â€Å"cardmembers† (see Exhibit 1). American Express commanded nearly a 24% share of U. S. credit card payments. 1As Linville prepared for the meeting, he wondered whether he could continue to rely on the same business growth drivers that had served American Express well in the past. With the U. S. economy slipping into recession, the proliferation of cards in the market required American Express to deepen its consumer understanding to provide innovative, value-added products that would attract and retain cardmembers. Company Background The American Express Company was a leading global payments and travel company with revenue net of interest expense of $27. 7 billion in 2007, up 10% from 2006. American Express’s principal products and services included charge and credit card payment products and travel-related services offered to consumers and businesses around the world. American Express was the world’s largest issuer of charge and credit cards as measured by the annual value of purchases charged o n these cards. 3 Yet American Express maintained a â€Å"best-in-class† credit quality, reflecting in part the company’s traditional focus on the affluent segment, its expertise in evaluating the credit risk of individual consumers, and its ongoing commitment to investing in risk capabilities. In 2007, around 70% of American Express’s revenue net of interest expense and 85% of its pretax income from continuing operations5 was generated in the United States. The global diversity of the business included 86 million cards in force worldwide, more than 115 card-issuing or merchant-acquiring ________________________________________________________________________________________________________________ Professor John A. Quelch and Research Associate Jacquie Labatt prepared this case. HBS cases are developed solely as the basis for class discussion.Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective ma nagement. Copyright  © 2008, 2011 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-5457685, write Harvard Business School Publishing, Boston, MA 02163, or go to www. hbsp. harvard. edu/educators. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School..This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN 509-027 The American Express Card arrangements with banks and other institutions, and over 650 American Express network branded products. 6 Fortune magazine ranked American Express the â€Å"Most Admired† megabank/credit card company in its 2008 annual survey. 7 American Express’s roots date back to 1850, when Henry Wells, William Fargo, and John Butterfield founded an express deli very company.The very nature of handling and transporting customers’ assets depended on security and trust, core attributes that had remained at the heart of the company and brand. In the late 1800s, American Express introduced financial products such as money orders and Travelers Cheques. The company later expanded into the travel business to further support its Travelers Cheques customers who were increasingly going abroad. The First Card The first American Express card targeting the business traveler was launched in 1958. The decision to enter this new business â€Å"faced strong opposition within the company with senior leaders evenly divided on the issue. 8 The debate began when the Diners Club card was introduced in 1950. American Express recognized the card as a potential threat to the company as consumers began using this card as a substitute for Travelers Cheques. 9 Some argued that a charge card would cannibalize the Travelers Cheque business, while others believed competing cards would hurt those sales regardless. There was further concern that launching a card would upset the American Automobile Association (AAA), one of American Express’s largest distributors of Travelers Cheques. At the same time, AAA was known to be considering launching a card of its own.Finally, with the economy in recession, many executives argued that it was a risky time to be launching a charge card. Nevertheless, in December 1957, American Express president Ralph Reed decided to launch such a card without further delay, stating at the time: â€Å"All we have to sell is service. † When word of the card’s imminent launch leaked, the company was inundated with calls from potential applicants. Further, the American Hotel Association approached American Express regarding forming an alliance, which gave the company an immediate customer base of 150,000 cardmembers and 4,500 participating merchants. 0 By the official launch date of October 1, 1958, Am erican Express had already issued 250,000 cards at an annual fee of $6 each, $1 higher than the fee for a Diners Club card. The first American Express card11 was targeted at businessmen on expense accounts, offering them a convenient method of payment rather than a means of financing purchases. This American Express card was a charge card that required the user to pay off the balance monthly. It was not a credit card that offered the user the option of paying interest on the balance as if it were a cash loan.The Gold (1966), Corporate (1966), and Platinum (1984) cards followed despite concerns over cannibalizing the original American Express card. This hierarchy of cards with progressively higher annual fees and services offered business travelers the aspirational prospect of being invited to move up from Green to Gold to Platinum. (In 1999, American Express added an unadvertised, byinvitation-only product, the black Centurion card. Equipped with VIP benefits such as a personal conc ierge, the Centurion card was offered by invitation only to a small, elite group of Platinum card customers.Celebrities and the very rich clamored for the right to carry this new card. ) American Express launched its first credit card, Optima, in 1987. The Optima card was the first American Express card to allow customers to carry a balance and pay interest. It was marketed only as a â€Å"companion† card to existing American Express cardmembers. A downturn in the economy in 1991 resulted in unexpected losses as some Optima customers failed to make their payments.As a result, American Express deferred plans to expand its credit card business and tightened its existing 2 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN The American Express Card 509-027 credit modeling programs and controls. In addition, American Express â€Å"card suppression,à ¢â‚¬  whereby merchants tried to dissuade consumers from using their American Express card, began with the 1991 â€Å"Boston Fee Party. † Boston estaurateurs were upset with what they viewed as American Express’s excessive discount rate, the percentage fee American Express charged merchants on consumer purchases made with American Express cards. This practice of not honoring the American Express card gained momentum and discouraged some consumers from using their American Express cards. Scale was viewed as a key competitive success factor in the payments industry; American Express considered its 16%—and falling—market share of the U. S. payments market in the early 1990s too low.With too few cards in circulation and too few merchants accepting the American Express card, American Express management faced a â€Å"chicken and egg† dilemma in trying to determine which aspect of the problem to address first. Turnaround Harvey Golub’s appointment as chairman and chief executive officer in 1993 set the stage for restoring health to the American Express business and brand. Golub became the â€Å"vocal guardian† of the American Express brand as he outlined his vision for the company: â€Å"To become the world’s most respected service brand. 12 American Express’s purpose was to manage, market, and promote the core attributes of the American Express brand, â€Å"trust, security, integrity, quality and customer service,† through educating employees, incorporating these attributes into card products and services, and reflecting them in all marketing communications. Future chief executive officer Ken Chenault, who was then running the card business, laid down three guiding principles: to provide superior value to customers, to achieve best-in-class economics, and to direct all activities to support the American Express brand.In addition, Golub established long-term goals as the guiding metrics for the b usiness: earnings per share growth of 12%–15% per year, revenue growth of at least 8% per year, and return on equity of 18%–20% on average over time. With a business strategy built on the company’s brand, Golub refocused American Express on the card business. Starting in 1981, American Express had purchased brokerage and financial advisory firms in an effort to become a â€Å"financial supermarket. † This strategy proved to be a distraction.By 1993, Golub had divested American Express of most of its non-core businesses. Concurrently, the U. S. card business underwent a significant review under the leadership of Chenault. He identified three issues: Costs were too high compared to American Express’s most efficient competitors; the division was too slow to change and adapt, particularly in introducing new products; and the organization was not sufficiently flexible to meet the needs of specific, more targeted consumer segments. 13 By 1995, signs of a turnaround were evident in the American Express card business.New card products began to appear with increased frequency, including proprietary and co-branded cards. A co-branding strategy was initially opposed by branding purists who argued that the American Express brand was too precious to be shared with a partner. This had led American Express to turn down an opportunity to co-brand air-miles-earning AAdvantage credit cards with American Airlines in the mid-1980s. The company came to regret this decision as American Airlines and, later, United Airlines both launched co-branded cards with Visa and MasterCard.The launches of the co-branded Hilton Optima card (1995) and the Delta SkyMiles American Express card (1996) marked the company’s new willingness to partner with other strong brands. In future years, agreements were also struck with Costco, Starwood, and JetBlue. In 1996, Golub decided to open the American Express network and invited other banks and institutions to is sue cards on its network. Doing business with other card issuers that were often competitors was a significant shift for the company. But, by carefully choosing the right partners who 3This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN 509-027 The American Express Card would tailor American Express products for their high-spending customers, the company could efficiently supplement its own efforts to grow the number of cards-in-force, cardmember spending, and merchant acceptance. The Global Network Services (GNS) division was formed in 1997 to build these relationships.By 2007, there were more than 750 different American Express cards (including cards co-branded with merchants and banks) available around the world. Exhibit 2 lists the principal American Express card offerings and features in the United States as of 2008. In evaluating prospective produc t offerings, Linville asked whether the company was, first, â€Å"removing friction† from the system— making everyday life easier in some way for consumers such as with a â€Å"contactless† card—and, second, â€Å"providing special recognition,† or badge value, to cardmembers.Linville sought to make the American Express brand available more broadly while ensuring that it retained its premium status. Organization As of 2007, the company was organized into two major customer groups: Global Consumer Services and Global Business-to-Business Services. The Global Consumer group contributed 67% of the company’s revenues net of interest expense and 52% of its income from continuing operations. 14 Its range of products and services included charge and credit card products for consumers and small businesses worldwide, consumer travel services, and prepaid, stored value products such as Travelers Cheques and Gift Cards.Business-to-Business Services con tributed 29% and 38%, respectively, to the company’s revenue and income, and offered business travel, corporate cards, expense management products and services, network services, and merchant acquisition and processing for the company’s network partners and proprietary payments businesses. (See Exhibit 3 for a breakdown of company revenues by operating group and division, and see Exhibit 4 for income statement data on the company’s U. S. card business. ) U. S. Payments Industry Payment SystemsAmerican Express competed against all forms of payments for consumer purchases, a market that exceeded $7 trillion in the U. S. in 2008. 15 Payments could be divided into three broad categories: paper-based payments (checks, cash, money orders, official checks, Travelers Cheques); card-based payments (credit, debit, prepaid, electronic benefits transfer); and electronic-based payments (preauthorized and remote). Consumers were shifting from paper-based payments toward cards and electronic methods (see Table A).Converting even a small portion of the paper market to American Express payments represented a big opportunity. Many of these transactions were cash/check-based because either they were low-value transactions (at mom-and-pop stores) or high-value captive transactions where there was little incentive for the merchant (for example, a utility company or apartment landlord) to accept charge/credit cards and absorb the discount fees charged for the service. American Express estimated that around 25% of the cash/check segment represented high-value transactions such as car purchases, tuition fees, and rent/mortgage payments. This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN The American Express Card 509-027 Credit and Debit Credit cards held a leadership 26% share of the payments market and had grown 45% in dollar terms since the year 2001. Debit cards, which were issued by banks and allowed a purchase payment to be deducted immediately from the cardholder’s bank account, held a 14% share of the payments market and had grown 162% over this same period.Since American Express was not a bank, it did not offer debit cards. The average purchase per debit card in the U. S. was $39 compared to $87 per credit card purchase. 16 While debit card transactions were projected to exceed credit card transactions by 2011, the average purchase per credit card transaction was expected to remain higher. 17 Table A U. S. Consumer Purchases by Payment Type—2006 Method of Payment Paper Checks Cash Other $3,365 1807 1439 119 Cards Credit Cards Debit Cards Other Source: % Change Versus Previous Five Years Market Share -4 % -19 +23 -3 47% 25 20 2 3,048 1,871 ,010 167 +77 +45 +162 +209 43 26 14 3 751 443 307 +177 +136 +270 10 6 4 7,165 Electronic Preauthorized Remote Total Consumer Purchases (billions) +30 100 Adapted from The Nilson Report, Issue 890, October 2007. The average American adult carried 4. 4 payment cards in his/her wallet, be they debit, credit, and/or charge cards. 18 Competitors in the card payments business were either card networks that processed transactions (Visa, MasterCard), card issuers (primarily banks), or organizations that both issued cards and processed transactions (American Express, Discover Financial Services).Charge cards for specific retail chains were declining in importance. American Express aimed to increase its â€Å"share of wallet† by making American Express the payment card of choice for all transactions. This was especially important, as recent evidence showed the average number of cards per wallet falling rather than increasing; 20% of consumers shed payment products in 2007 versus 16% in 2004. 19 Further, only 31% of consumers were adding new payment products to their wallets, a drop from 56% three years earlier. 0 Many American consumer s â€Å"compartmentalized† their spending, using different cards for different types of payments. For example, some long-standing American Express members still used the American Express card just for travel and entertainment, and used a Visa or MasterCard credit card for other purchases. 5 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN 509-027 The American Express Card Competitive Card NetworksPayment networks operated under two business models. â€Å"Open-loop† payment networks, as employed by Visa and MasterCard, were multiparty. Processing a payment typically involved connecting two financial institutions: one that issued the card (issuer) and one that serviced the merchant (acquirer). The open-loop network managed the information and transfer of value between the two banks. In a â€Å"closed-loop† network, as used by Americ an Express and Discover, the network â€Å"owned† the relationship with both the cardholder and the merchant.Leading payment networks are listed in Table B. Credit Card Networks—U. S. Market Share 2007 Table B Share of Credit Card Purchases Visa MasterCard American Express Discover Source: Share of Credit Card Transactions 42. 2% 28. 7 23. 8 5. 3 43. 8% 30. 5 18. 3 7. 4 Adapted from The Nilson Report, Issue 889, 2007. Visa, Inc. Visa operated the world’s largest retail electronics open-loop payment network. Visa provided financial institutions, their primary customers, with product platforms, including consumer credit, debit, prepaid, and commercial payments (see Table C).Visa operated a data-processing network that transferred transaction data and managed payment flow between issuers and acquirers. Visa generated revenue primarily from financial institutions based on fees calculated on the dollar volume of payment activity on Visa-branded cards (service fees) a nd from fees charged for providing transaction processing (data-processing fees). In 2007, Visa USA generated 82% of its gross operating revenue from service and processing fees combined. 21 U. S. Results for Visa, Inc. , Annual Product Performance (June 30, 2007) Table C Payment TypeConsumer Credit Consumer Debit Commercial and Other Total Payments Volume Cash Volumea Total Volume Total Transactions (in millions) Source: Payment Volume (billions) Share of Payment Volume by Payment Type $ 624 637 188 34% 35 10 1,449 79 382 1,831 21 100% 25,942 Adapted from Visa, Inc. , Form 10-K, December 2007. a Cash volume includes cash access transactions, balance transfers, and convenience check transactions associated with Visa. 6 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012.For the exclusive use of Y. SUN The American Express Card 509-027 Visa went public on March 18, 2008, raising $19 bill ion in the world’s second-largest initial public offering (IPO). 22 The IPO created a cultural and business challenge: Visa had to shift its focus from delivering benefits to its partner banks toward maximizing profits for long-term shareholder value. 23 As stated in Visa’s 10-K report, â€Å"Many of our employees have limited experience operating in a profit-maximizing business environment. †24 Further, the proceeds of the IPO bought out the interests of the partner banks.As a result, the banks were no longer Visa’s partners and co-owners but were now Visa’s customers. MasterCard MasterCard (MC), which successfully went public in 2006, was a global payment solutions company that was similar to Visa’s open-loop network. MC’s primary sources of revenue were transaction service fees, data-processing fees, and assessments on gross dollar use (purchases, cash disbursements, balance transfers) of MC-based cards. In 2007, transaction fees a nd assessments represented approximately 74% and 26%, respectively, of the company’s net revenues. 5 Discover Financial Services Discover Financial Services (DFS) was the consumer credit and financial services division of Morgan Stanley until it was spun off to shareholders as an independent closed-loop payments network company in July 2007. Founded in 1986, DFS was the only issuer whose wholly-owned network operations included both debit and credit card capability. 26 DFS also offered a range of banking products, such as personal and student loans, certificates of deposit, and money market accounts. DFS’s primary source of revenue in its U. S. ard business was interest income earned on revolving cardmember balances. Other sources of revenue included late-payment, over-the-limit, and merchant discount fees. Like American Express, the company offered a rewards program to cardholders; under the Discover program, card users earned a cash-back discount on the value of thei r transactions. Competitive Card Issuers Competitive card issuers (largely banks) issued credit and debit cards, predominantly under the Visa and MasterCard brands, and were responsible for the pricing, positioning, and marketing of their co-branded cards.The top three banks accounted for more than 60% of outstanding bank-issued credit card purchases, as indicated in Table D. Card issuers competed on the basis of card features and quality of service, including rewards, number of cards issued and quality of users’ credit and spending, number of establishments accepting the card, success of target marketing and promotional campaigns, and the ability of the issuer to manage credit and interest rate risks through economic cycles. The primary revenue source for bank issuers was interest income earned on outstanding credit card balances.They acquired new cardholders by cross-selling cards to the customers of their retail branch networks and, increasingly, targeted high-spending con sumers, offering premium cards with enhanced services such as larger lines of credit, cash rebates, lower interest rates, and co-brand benefits with airline frequent-flyer programs. 7 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN 509-027 The American Express Card Table D U. S. Credit Card Volumes by Card Issuer in 2007 Volume of Purchases billions) American Expressa JP Morgan Chase Bank of America Citigroup Capital One Discovera U. S. Bank HSBC Wells Fargo GE Money Other Sources: $459 317 263 222 106 90 65 41 37 27 87 Adapted from The Nilson Report, Issue 896, February 2008, except for American Express (American Express Annual Report 2007). a Do not include third-party business. Emerging Payment Networks New entrants offering nontraditional, convenient, technology-based payment methods were growing in number and importance. It was estimated that cr edit and debit cards generated approximately $200 billion in purchase volume from online bill payments in 2006. 7 New payment methods included online â€Å"aggregator† networks, such as PayPal and Google Checkout, and telecom providers that leveraged new technologies and customers’ existing charge and credit card relationships to create mobile payment solutions where the plastic card would not need to be presented to the merchant. PayPal used encryption software to allow consumers to make financial transfers between computers. 28 Similarly, Google Checkout, which accepted and processed existing payment methods such as American Express, Visa, and MasterCard, aimed to offer buyers a fast, safe, and convenient purchase experience.American Express Card Business Model The American Express â€Å"spend-centric† business model (see Exhibit 4) depended on increased cardmember spending. American Express’s primary source of income was â€Å"discount revenue,† revenue earned from fees charged to merchants for processing purchases made using an American Express card. The fee charged represented a percentage of the dollar value of these transactions. In 2007, discount revenue and card fees accounted for more than 70% of U. S. Card Services’ revenue net of interest expense (see Exhibit 5).The average American Express cardmember charged more each year than the average Visa or MasterCard credit card user. In 2007, the annual average purchase volume per American Express card of $8,360 in the U. S. was substantially higher than that for Visa ($2,470/card) or MasterCard ($1,960/card). 29 By accepting American Express cards, merchants benefited from attracting as patrons the higher-spending American Express consumer. As a result, American Express could justify a premium discount rate from merchants over its competitors.American Express invested this price premium in information systems that studied the purchase habits and inclinations of c ardmembers. These insights led to the development of targeted 8 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN The American Express Card 509-027 promotions, connecting merchants with interested American Express cardmembers who were in turn motivated to spend even more on their American Express cards.In this way, the spend-centric model became a virtuous cycle, benefiting cardmember, merchant, and company alike. From the outset, American Express targeted the affluent, high-spending consumer. â€Å"High-wallet† consumers were defined by American Express in 2007 as those who spent more than $30,000 annually using cards. Affluent consumers represented roughly 10% of card users but accounted for half of U. S. charge/credit card consumer spending. 30 American Express’s target consumer typically liked to travel, liked to be different, and lik ed special access to exclusive experiences.For many years the American Express consumer skewed slightly toward affluent, older men, a reflection of the company’s early targeting of the male business traveler. The company had successfully increased American Express brand penetration of affluent younger and female consumers. Unlike its transaction-oriented competitors, Visa and MasterCard, the American Express card always emphasized an aspirational lifestyle. An early example was the 1985 launch of Departures magazine for Platinum cardmembers who were active, affluent consumers.The Departures editor defined luxury not as status and privilege but in terms of quality and authenticity. Membership in a Lifestyle From the outset, American Express executives emphasized that the company sold not just a card but a relationship. The relationship involved a â€Å"membership† in which the company committed to providing the member with the following: Access (premium and exclusive ac cess and enhanced experiences for cardmembers), Advocacy (in merchant disputes, for example), Accountability (privacy of information, fairness in billing), and Affiliation (a sense of belonging to a community).Every American Express charge card included the â€Å"Member Since† designation on the front followed by the year the consumer became an American Express cardmember. To underscore the membership status of American Express consumers, the company in 1991 launched the Membership Miles program to motivate customer sign-ups, customer retention, and more frequent card usage. At launch, the Membership Miles program gave cardmembers one point for every dollar charged on the card and the ability to redeem points with seven airlines. The program was renamed Membership Rewards (MR) in 1995.Spending on American Express cards linked to MR averaged four times higher than that on cards without rewards activity. 31 Seventy percent of cardmembers used the MR program. Cardmembers enrolle d in the program were found to be lower credit risks as well as more profitable. 32 The company’s â€Å"data-mining† capabilities helped shape the MR program into an industry-leading loyalty program. For these reasons, American Express’s marketing spending on MR had grown at a compound annual growth rate of 24% since 2001, compared to an average 12% increase in marketing and promotion spending. 33 The MR program in the U.S. had more than 160 redemption partners34 and featured 29 airlines among its 250 merchandise brands. Analytics not only helped to determine whom to reach and with what offer, but also how rewards influenced loyalty. In 2005, the MR analytics team analyzed which members were more likely to redeem, in which categories, how many points they would redeem, and at what cost to the company. This research enabled American Express to craft a more appealing mix of reward offers, to predict more accurately the volume of demand for particular offers, and t o negotiate better deals with suppliers.Innovations such as â€Å"First Collection,† a luxury tier exclusively for U. S. Platinum and Centurion cardmembers that included redemption partners such as Tiffany and Lamborghini, and â€Å"Bonus Points Mall,† an online gateway to more than 100 retailers, were 9 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN 509-027 The American Express Card examples of how American Express increasingly tried to match the nature and the level of rewards to what its members sought and expected.Data-Based Marketing As a card issuer and network provider, American Express had direct relationships with both its cardmembers and its merchants. â€Å"Data-based marketing† became a competitive advantage at American Express. Analyses of cardmember purchases enabled American Express to develop offers that boosted spending with particular groups of merchants. Open-loop competitors Visa and MasterCard could not match American Express’s data-driven capabilities because they controlled access to either the cardholder or the merchant data, not both.The purpose of data-based marketing was to develop insights and offers that would match members’ interests, drive charge volume, and increase loyalty to American Express. 35 The company did not use individual consumer data for marketing purposes but rather clustered cardholders into segments based on personal, financial, and lifestyle characteristics evident in the patterns of their transactions. Cardmember clusters might have greater than average spending in, for example, entertainment, dining, home, fashion, electronics, or automobiles.Cardmembers whose spending showed them to be more â€Å"passionate† about their homes might then receive offers from local homeimprovement retailers. The company also researched correlations across spending categories to identify potential partnerships. For example, research indicated that affluent consumers who owned at least one luxury automobile brand had a strong affinity not only to other luxury brands but also to consumer electronics brands, an above-average tendency to engage in skiing and antiquing, and a strong likelihood of owning a second, more practical vehicle.Data mining also enabled American Express executives to predict how spending behavior evolved through various â€Å"life stages† and increasing levels of affluence. For example, the company’s predictive model indicated that non-affluent cardmembers who made a single luxury purchase, such as a first-class airline ticket, were three times as likely to become affluent. Card upgrade offers distributed following a cardmember’s first luxury charge purchase resulted in response rates over 50% above normal. 36 Emerging ChallengesBy 2005, competitors had begun to imitate American Express’ s lifestyle platform with premium product offerings (e. g. , Visa Signature, MasterCard World Elite), exclusive experiential rewards (e. g. , MasterCard’s Unique Experiences program), and lifestyle advertising. Visa’s â€Å"Life Takes Visa† advertising campaign emphasized the â€Å"brand’s promise to deliver innovative products and services that empower cardholders to experience life and business their way and on their terms. †37 The quality of a card’s rewards program was increasingly important to higher-spending consumers.No longer did they evaluate rewards programs just on ease of earning and redeeming points. The variety and frequency of unique rewards (such as backstage access at a concert) were more and more critical. American Express had an edge over Visa and MasterCard owing to its cumulative expertise in arranging special events, but bidding wars for such opportunities were increasingly common. While continuing to emphasize relation ship and lifestyle over transaction, American Express had to broaden its merchant network to maintain its share of consumer spending.In 1990, 64% of 10 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN The American Express Card 509-027 American Express U. S. billings came from the travel and entertainment (T&E) sectors and 36% came from retail and other sectors. 38 This reflected the company’s belief that spending could be segmented into â€Å"business† and â€Å"personal. † American Express’s focus on T&E concerned Chenault and Kelly.They believed that, in the interests of scale, American Express had to expand its presence in the â€Å"everyday† retail market. This change in strategy was opposed initially, partly because it would necessitate launching more new products and, in the eyes of some traditionalists, weaken the brand. However, by 2007 the sources of cardmember spending had more than reversed, with everyday retail spending representing more than 69% of U. S. American Express card billings. 39 Marketing Communications Advertising CampaignsAmerican Express had a long history of successful, distinctive advertising that consistently stressed prestige, inviting consumers to join an exclusive club of cardmembers. One of the first TV campaigns, â€Å"For People Who Travel† (1969–1974), demonstrated how the American Express card is â€Å"All You Need† for your travel and entertainment needs. This was replaced by the â€Å"Do You Know Me? † campaign, which that ran for more than a decade, produced 125 commercials, and marked the beginning of the company’s strategy of using famous American Express â€Å"members† to sell cards to consumers. Do You Know Me? † used a variety of celebrities to highlight the special treatment and recognition cardmembers enjoy, the premise being that people with famous names don’t always have equally famous faces; anyone who carried an American Express card would be immediately identified as someone of note. In 1987, American Express premiered the â€Å"Membership Has Its Privileges† campaign, which highlighted the company’s superior service and showed how the card â€Å"not only facilitated the variety and enjoyment of a cardmember’s lifestyle, but that membership is also invaluable when emergencies arise. 40 To complement this television campaign, the â€Å"Portraits† print campaign was launched. Portraits underscored the message that â€Å"superior customer service, security, and convenience† were important American Express qualities that cardmembers relied on. Shot by celebrity photographer Annie Leibovitz, â€Å"Portraits† focused on a unique group of high-profile cardmembers. The company’s first global advertising campaign, â€Å"Do Mo re,† was launched in 1996 and emphasized brand attributes such as trust, customer focus, travel relevance, and financial insight.A variety of â€Å"product† commercials highlighted individual card benefits such as no preset spending, purchase protection, and global assist, while talent-driven â€Å"stories,† such as Tiger Woods’s â€Å"Manhattan† commercial in which he plays the world’s toughest â€Å"island† course—Manhattan—were intended to drive emotional relevance. In an effort to encourage everyday usage of the card, the â€Å"Do More† campaign introduced a series of ads showing comedian Jerry Seinfeld using the American Express Card in supermarkets and drugstores. In 2004, a new global campaign with the tagline â€Å"My Life. My Card. featured snapshots of the lives of celebrities, including Robert DeNiro, Tiger Woods, and Ellen DeGeneres. The campaign portrayed American Express cardmembers as exceptional pe ople no matter where they lived or what they did. The campaign was also the first to support both American Express’s proprietary and network businesses. John Hayes, American Express’s chief marketing officer, believed that the company’s history of tastefully portraying the rich and famous had provided it with an edge in attracting A-list talent. DeGeneres purportedly pointed to Seinfeld’s ads before signing on to do her own. 1 11 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN 509-027 The American Express Card American Express launched its most recent campaign, â€Å"Are You A Cardmember? ,† in 2007. Hayes explained: â€Å"The new campaign continues the tradition of defining the value of belonging to the American Express community by showcasing some of our most exceptional cardmembers and the ways in which membersh ip works for them.But our latest campaign not only reaffirms for existing members why they belong, it also calls on nonmembers to consider becoming a cardmember. †42 See Exhibit 6 for a summary of American Express’s U. S. card advertising campaigns. Expenditures The company’s mix of marketing spending had changed to reflect the growing importance of targeted communication over mass mailings and the emergence of the digital world. Over time, spending on direct mail, while still large, had decreased along with spending on television advertising.Event/experiential marketing and Internet spending had both grown. American Express used direct marketing both to acquire new customers and to motivate existing members to upgrade. Traditionally, American Express sought new customer applications from outbound telemarketing, â€Å"Take Ones† (applications placed in restaurants and other retail establishments), and direct-mail efforts. By 2008, only 40% of successful ne w applicants still came from direct-mail solicitations and response rates had slipped well below 1%.By contrast, a significant portion of applications came from new channels such as the Internet, co-branded partner channels, and consumer-initiated phone calls to American Express customer service. The American Express website had become one of the company’s largest sources of new member applications. It allowed the company to leverage its datamining expertise to provide real-time consumer rewards and offers. The Web simplified the card selection/application process by guiding the applicant through card choices.Based on the applicant’s stated card feature priorities (fees, rewards, payment terms), the American Express website provided card product comparisons and recommended the most appropriate card options from American Express’s portfolio. The growing importance of the digital world was reflected in the company’s shift in media spending, as shown in Tabl e E. American Express Company—U. S. Card Media Spending Table E Share of Media Spend 2003 Media Type Online Share of Media Spend 2007 7% Television 19% 48 57 14 10 Print 23 13 Radio 2 Non Traditional Source: Mediaa Company records. a Non Traditional Media includes billboards, transit, cinema, and other out-of-home media Investing in the website reduced American Express’s costs and built brand presence and prestige. By 2008, 38% of American Express applications, payments, and reward redemptions had migrated to the Web at cost rates 53%, 84%, and 86% lower, respectively, than offline. 43 The Internet allowed the company to attract new customers faster (one application every eight seconds) and more 12This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN The American Express Card 509-027 economically. The website, serving as a virtual service cen ter around the clock, increased the frequency with which the company was in contact with its customers, making it a powerful marketing channel. Claiming the americanexpress. com site â€Å"gets more traffic than the Wall Street Journal online,† the company noted that its members used the Web primarily for checking statements and cashing in rewards.With more than 50% of American Express payments left to migrate online, upside opportunity existed for further cost savings and deeper relationships with customers. Bank and Merchant Partners As of 2008, American Express obtained customers in two ways: through direct company solicitations and communications that resulted in consumers being issued proprietary American Express cards; and through third-party financial institutions that solicited their customers to sign up for American Express cards through them, a business managed by the company’s Global Network Services (GNS) division.Bank Partners American Express’s GNS business was set up in 1997 to build partnerships with banks and other institutions to issue American Express–branded products. GNS products were designed to help issuers develop products for their highest-spending, most affluent customers and to support the value of American Express card acceptance with merchants. GNS enabled American Express to broaden its cardmember base internationally at relatively low cost. By 2008, GNS had over 120 partners in more than 125 markets and accounted for nearly 25% of American Express’s overall cardsin-force.American Express particularly wanted to help each bank design card products for their highspending, affluent private banking clientele, and to benefit from new distribution channels that included each bank’s website, direct-mail capabilities, and retail branch network. For their part, the banks were interested in partnering with American Express because of its superior marketing expertise as a card issuer and the higher-s pending profile of American Express cardmembers. Merchants stood to benefit from more American Express cards in circulation.For American Express, expanding the GNS business required little capital; the banks owned the receivables and therefore absorbed the consumer credit risk. While consumers could choose between American Express proprietary cards and those issued under GNS partnerships, cannibalization of direct sales appeared to be minimal. While GNS began building a healthy international business, it was effectively barred from doing business in the U. S. by Visa and MasterCard’s policies preventing their U. S. member banks from issuing other card brands. In 1998, the U.S. Department of Justice filed suit against Visa, MasterCard, and eight of their member banks, charging anticompetitive practices. The suit charged that Visa and MasterCard prohibited their U. S. partner banks from issuing American Express–branded cards on the American Express network. Discover card s were affected similarly. The legal battle was resolved in 2004 when the U. S. Supreme Court let stand a court ruling that Visa and MasterCard had violated antitrust laws. Visa settled for $2. 25 billion. MasterCard later settled for $1. 5 billion.American Express soon signed Network Card License Arrangements (NCLs) to issue American Express–branded cards with seven leading U. S. banks. MBNA was the first, followed by Citibank, Barclaycard U. S. , USAA, GE Money, HSBC, and Bank of America. Though the banks were licensed to issue American Express–branded cards, American Express owned the relationships with merchants. 13 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y.SUN 509-027 The American Express Card This meant that GNS earned discount revenue from both the bank issuer and the merchant acquirer, a sum that represented roughly one-third o f total GNS revenues. This design feature underscored the importance of the continued focus on the high-spend segment. American Express developed strong account-management teams to manage the relationships with these major banks. Two major banks that had not yet signed on to issue American Express cards were JP Morgan Chase and Capital One. Merchant Partners In addition to U. S. anks, American Express depended on relationships with merchant partners, seeking always to expand its merchant coverage. These relationships were managed by the Merchant Services Group. Despite American Express’s premium discount rate, American Express believed that merchant coverage was not a function of price alone; if it were, Kmart and Walmart, for example, would not have chosen to accept American Express. Further, the Discover card discount rate was less than American Express’s yet Discover had a much lower merchant penetration. (See Table F for fees paid in 2005 by U. S. erchants to accep t card payments. ) American Express account managers and third-party sales organizations aimed to convince merchants of two benefits to offset American Express’s higher discount rate: that American Express cardmembers would spend more with them than with competitive cardholders and that American Express data mining could target promotional offers that would drive business their way. To persuade reluctant merchants to sign up, the Merchant Services Group might target members who were likely shoppers at a new merchant with double points promotions for an inaugural period.Since 2000, American Express increased merchant acceptance of its cards in many categories, especially quick-serve restaurants, mass transit, and health care. American Express card acceptance also increased in industries where cash, checks, or bank transfers were the predominant forms of payment, including apartment rentals, private jet travel, and destination clubs. By 2008, the American Express card was accep ted at millions of merchants in the U. S.. Management estimated that U. S. ocations where the American Express card was accepted covered more than 90% of American Express cardmembers’ general-purpose charge and credit card spending. 44 Table F Fees Paid by U. S. Merchants to Accept Card Payments—2005 Payment Card Brand Visa/MasterCard Credit Cards Visa/MasterCard Debit Cards American Express Discover Source: Fees Paid (billions) Weighted Averagea $25. 13 9. 76 8. 51 1. 46 2. 19% 1. 75 2. 41 1. 76 Adapted from The Nilson Report, Number 862, August 2006. a Fees vary according to merchant category, volume, and type of card. ConclusionBy the spring of 2008, American Express was strategically focused on the payments and travel businesses, having sold off the last of its banking interests. Michael O’Neill, senior vice president of corporate affairs and communications, explained this transformation: â€Å"We narrowed the business and broadened the brand. † Warre n Buffett, who was the company’s largest shareholder, described 14 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN The American Express Card 509-027American Express’s â€Å"powerful world-wide brand† as â€Å"an enduring moat that protects excellent returns on invested capital†45 and Chenault as one of the â€Å"giant-company managers whom I greatly admire. †46 In March 2008, Barron’s named Chenault as one of â€Å"The World’s Best CEOs† for having â€Å"positioned American Express well to withstand turbulence. He hasn’t compromised credit standards to gain new cardholders, nor has he cut back on marketing spending to prop up earnings. His loss rates on cards remain among the industry’s best. †47 In the second half of 2007, a U. S. housing downturn and credit crunch slowed U . S. economic growth.American Express issued a profit warning in early 2008. Chenault explained that the slowdown in cardmember spending that had come on suddenly in December 2007 was broad-based and was expected to continue into 2008. â€Å"Now we’ve been through slowing economies before, but none of us can recall such a dramatic drop over such a short time frame, except for the event-driven decline of 9/11. †48 Past-due loans and write-offs also rose, especially in parts of the U. S. that had experienced a housing price bubble. However, superior risk management and credit controls at American Express meant that it was less affected than competitors. 9 It was in this context that Jud Linville prepared for his meeting with Ken Chenault and Al Kelly. How could the American Express consumer card business continue its growth while maintaining the company’s premium positioning? Were there opportunities for his organization to serve U. S. consumers and merchants in n ew ways while continuing to turn in the profits that shareholders had come to expect? 15 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN 509-027 The American Express CardExhibit 1 American Express Card Business Statistics: 2006–2007 Years Ended December 31 (billions, except percentages and where indicated) 2007 2006 Card billed businessa United States Outside the United States $459. 3 188. 0 $406. 8 154. 7 $647. 3 $561. 5 52. 3 34. 1 48. 1 29. 9 86. 4 78. 0 40. 9 29. 2 37. 1 25. 4 70. 1 62. 5 Total b Total cards-in-force (millions) United States Outside the United States Total Basic cards-in-force (millions) b United States Outside the United States Total Average discount ratec Average basic cardmember spending (dollars)d Average fee per card (dollars) d Source: 2. 56% $12,106 32 2. 57% $11,201 $32 Company documents. a Card billed business inc ludes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements, and certain insurance fees charged on proprietary cards. Card billed business is reflected in the United States or outside the United States based on where the cardmember is domiciled. b The number of cards that are issued and outstanding. Proprietary basic consumer cards-in-force includes basic cards issued to the primary account owner (â€Å"cardmember†) and does not include additional supplemental cards issued on that account.Proprietary basic small business and corporate cards-in-force include basic and supplemental cards issued to employee cardmembers. Non-proprietary basic cards-inforce includes all cards that are issued and outstanding under network partnership agreements. c Designed to approximate merchant pricing, the percentage of billed business (both proprietary and Global Network Services) retained by the Company from merchants it acquires, prior to payments to third parties unrelated to merchant acceptance. d Average basic cardmember spending and average fee per card are computed from proprietary card ctivities only. 16 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN The American Express Card Exhibit 2 509-027 Selected American Express U. S. Charge and Credit Card Products: 2008 CARD TYPE SELECTED FEATURES AND BENEFITS CHARGE CARDS Green (1958) Gold(1966) —Preferred Rewards Gold (2002) —Rewards Plus Gold (1994) Platinum (1984) Centurion (1999) One from American Express (2005) 1% of purchases deposited to high yield savings account CREDIT CARDSBlue (1999) —Blue (1999) —Blue Cash (2003) —Blue Sky (2005) —Blue for Students (2001) Optima (1987) —Optima Platinum (1997) City Rewards —In New York City (2004) —In Los Angeles (2005) —In Chicago (2005) Clear (2005) No annual fee, flexibility to pay over time, free additional cards No annual fee, earn up to 5% cash back, unlimited cash rewards No annual fee, earn points redeemable on airline, hotel or cruise services. No annual fee, flexibility to pay over time, Membership Rewards No annual fee, transfer balances for free, Membership Rewards No annual fee, earn Inside points to at, drink and play in New York No annual fee, earn Inside points to eat, drink and play in L. A. No annual fee, earn Inside points to eat, drink and play in Chicago. No fees of any kind, automatic rewards, flexibility to pay over time PARTNER CARDS Airlines —Gold Delta Sky Miles (1996) —Platinum Delta Sky Miles (2002) —JetBlue Card (2005) Hotels —Starwood Preferred (2001) —Hilton HHonors (1995) Costco—True Earnings Card (2004) Lifestyle Cards —The Knot (2005) —The Nest (2005) Earn Sky Miles on every dollar spent, earn double m iles on some purchases Earn Sky Miles, earn 1 companion ticket each yearEarn points towards JetBlue flights Earn points towards free hotel stays, upgrades, even flights Earn HHonors points on every purchase Earn cash back on purchases Membership Rewards, no annual fee, get special offers from The Knot Membership Rewards, no annual fee, get special offers from The Nest FOR CORPORATE CLIENTS American Express Corporate Cards (1966) Business ExtrAA Corporate Card (2003) Comprehensive reporting to track spending and increase compliance Savings through airfare rebates, free travel awards FOR SMALL BUSINESS Business Gold Rewards (2005) Business Platinum Card (1995) Plum (2006)Starwood Preferred Guest Business Credit Card (2001) Business Cash Rebate Credit Card (2003) Source: Membership Rewards, no limit, year-end summary Membership Rewards, access to special events Membership Rewards, access to special events, 5 free additional cards Airport Club access, 24 hour concierge service, by Invit ation Only events Save 3-25% on business expenses at selected partners (e. g. : FedEx, Delta) Access to airport lounges, professional office space, personal concierge Trade terms, pay within 10 days, get 2% off or defer payment Free awards nights at Starwood Hotels, awards flights on over 30 airlines Earn 2. % on all purchases and up to 5% for certain business purchases. Company documents. 17 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN 509-027 The American Express Card Exhibit 3 Source: American Express Company Overview: 2007 Company records. 18 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN The American Express Card Exhibit 4 509-027American Express: Spend-Centric Model The American Express spend-centric busines s model focused primarily on generating revenues by driving spending on its cards, and secondarily finance charges and fees, allowing the company to grow market share in the payments industry. Source: Company documents. 19 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN 509-027 The American Express Card Exhibit 5 American Express U. S. Card Services—Selected Income Statement Data Year Ended December 31 (millions)Revenues Discount revenue, net card fees and othera Cardmember lending revenueb Securitization income Excess spread, net Servicing fees Gains on sales from securitizations Securitization income, net:c 2007 2006 $10,435 4,762 $9,421 3,434 1,025 425 57 1,055 407 27 $ 1,507 $ 1,489 Total revenues Interest expense Cardmember lending Charge card and other $16,704 $14,344 1,518 964 957 767 Revenue, Net of Interest Expense $14,222 $12,620 Exp enses Marketing, promotion, rewards and cardmember services Human resources and other operating expenses Total Provisions for lossesd Pretax segment income Income provision 5,140 3,354 $ 8,494 $ 2,998 $ 2,730 $ 907 $ 4,445 3,227 $ 7,672 $ 1,625 3,323 $ 1,171 Segment Income $ 1,823 $ 2,152 Source: American Express Company Annual Report 2007, p. 53. a Discount Revenue represents revenue earned from fees charged to merchants with whom the company has entered into a card acceptance agreement for processing cardmember transactions. b Cardmember Lending Revenue represents the outstanding amount due from cardmembers for charges made on their American Express credit cards, any interest charges and card-related fees and balances with extended payment terms on certain charge products. Securitization Income, Net includes non-credit provision components of the net gains from securitization activities; excess spread related to securitized cardmember loans; and servicing income net of related dis counts or fees. d Provisions for Losses include credit-related expenses. 20 This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN The American Express Card Exhibit 6 509-027 Major American Express Advertising Campaigns in the United States 1958–early 1960s Good As Gold.The World Around! Establish prestige image for AmEx card and provide application instructions. 1969–1974 For People Who Travel Show how the American Express card is â€Å"all you need† for your travel and entertainment needs. 1975–1987 Do You Know Me? Show celebrities receiving the special treatment and recognition cardmembers enjoy around the world. Tagline, which continued through 1995, is â€Å"Don’t Leave Home Without It. † 1987–1992 Membership Has Its Privileges Introduce notion of â€Å"membership† and showcase the benefits of res pect, recognition, unsurpassed service as well as Global Assist, Buyers Assurance. 996–2000 Do More/Seinfeld Highlight individual card product benefits such as no pre-set spending, purchase protection, global assist. Talent-driven â€Å"stories† drive emotional relevance and recognition benefit. Use Jerry Seinfeld in a larger than life manner to increase awareness and use of the American Express card at everyday spend locations. Sub-campaign uses everyday moments to highlight individual product benefits such as retail protection and roadside assistance. Make Life Rewarding 2002 Relaunch American Express brand post 9/11 using charge card as the face of propriety.Sub-campaign introduced â€Å"revitalized† charge card with membership reward programs built in. 2004–2007 My Life. My Card. Demonstrate the company’s belief that American Express cardmembers are exceptional people no matter where they live or what they do. Featured extraordinary individuals including Robert DeNiro, Tiger Woods, Ellen DeGeneres, and Laird Hamilton, revealing snapshots of their lives. Acclaimed director Martin Scorsese and celebrated photographer Annie Leibovitz were commissioned to lend their vision to elements of the campaign creative.While the creative direction varied from ad to ad, the campaign theme was consistent: achievers of all types choose American Express. 2007–2008 Are You A Cardmember? Entice prospective cardmembers to apply and join the American Express community and reinforce the membership benefits to current cardmembers via showcasing the advantages American Express offers versus competition. Celebrities such as Beyonce Knowles, Ellen DeGeneres, Tina Fey, and Diane Von Furstenberg are featured within a lifestyle and access theme. Source: Company documents. 21This document is authorized for use only by YUJIE SUN in Intensive in American Business taught by Robert Calamai from September 2012 to December 2012. For the exclusive use of Y. SUN 509-027 The American Express Card Endnotes 1 Adapted from The Nilson Report, Issue 902, 2008. 2 American Express Annual Report, 2007, inside front cover. 3American Express Fixed Income Presentation, March 12, 2008, http://media. corporate-ir. net/media_files/ irol/64/64467/DebtInvestorPres. pdf, accessed June 12, 2008. 4 American Express Financial Community Meeting 2/16/2008 K.Chenault speech, texthttp://media. corporateir. net/media_files/irol/64/64467/KCSTalkingPoints020608. pdf, accessed June 12, 2008. 5 American Express Annual Report, p. 110. 6 American Express Fixed Income Presentation, March 12, 2008, ir. net/media_files/irol/64/64467/DebtInvestorPres. pdf, accessed June 12, 2008. 7 American Express Fixed Income Presentation, March 12, 2008, ir. net/media_files/irol/64/64467/DebtInvestorPres. pdf, accessed June 12, 2008. http://media. corporatehttp://media. corporate- 8 Americ