The lack of innovation and entrepreneurial focus at American Express (AmEx) may be because of hubris, inertia, and a lack of capability. The firm’s performance in 2014 was not, by any means, what stakeholders expect. Partly in response to its poor financial performance, the firm announced plans to reduce its workforce by up to 4,000 employees. The loss of two of its major partnerships, with Costco and JetBlue, contributed to AmEx’s poor performance in 2014. Its partnership with Costco, which had involved an exclusive co-branded credit card, was particularly damaging. At its peak, this collaborative relationship had accounted for approximately eight percent of AmEx’s total revenues. Interestingly, cardholders used this co-branded card for many other purchases outside of Costco, as about 70 percent of the revenue generated by the card came from its use in other venues besides Costco.

QUESTIONS

1. This Mini-Case suggests that a lack of continuous innovation  contributed to American Express’s (AmEx) poor performance  in 2014. Assuming this is true, what factors might prevent a  firm the size and scope of AmEx from being able to innovate  continuously?
2. Use material from Chapter 4 to identify the business-level strategy  AmEx uses. What dimensions do you believe AmEx should  emphasize to use the strategy you identified successfully  across time?
3. What actions do you believe AmEx should take to establish an  entrepreneurial mind-set among employees throughout the  company?
4. This Mini-Case includes descriptions of recent AmEx  innovations. Do you anticipate that most of these innovations  resulted from autonomous strategic behavior or from induced  strategic behavior? Why?