Introduction
Today, globalization seems to be an inevitable process during which various business organizations must identify and develop international influences and use improved information flows and technological advancement. According to Hill (2021), globalization is characterized by cross-border trade, decreased investments, shortened distances, common material cultures, and economic merges within the integrated global system. Each organization has its sources and strategies to deal with globalization outcomes. American Express Co (Amex) is a global provider of payment services, including the production of credit and charge cards and various travel-related operations for individual and corporate financial solutions (Marketline, 2020). In modern studies, SWOT analysis is a helpful tool to evaluate the main idea of the offered business and examine organizational internal strengths and weaknesses and external opportunities and threats. This paper aims to apply Amex’s SWOT to learn the impacts of declining trade and investment barriers, technological changes, and currency fluctuations on its global operations.
Declining Trade and Investment Barriers Impact
Declining trade and investment barriers introduce a group of drivers of globalization that might affect the development of Amex’s global operations. This change allows viewing many companies as a single market where production activities are established and accelerating world trade volumes is possible (Hill, 2021). Besides, increased investments will promote economic growth and lower unemployment rates (Grzegorzek, 2021). From this perspective, the two major impacts on Amex’s performance include the inevitability of increased competition in the sector and some changes in intermediate inputs that are necessary for service production. SWOT analysis reveals that Amex successfully demonstrates robust operational performance and uses strategic initiatives that cover major business needs (Marketline, 2020). Therefore, despite the threats of competitive global cards, the company can deal with the first driver of globalization and improve its international performance. The lowering of barriers means the creation of similar business backgrounds for all organizations, and the achieved experiences usually determine further performance success. Annex should use its current business channels and the already improved billed business to maintain its competitive advantage.
Impact of Technological Changes
There are many other shifts in business operations besides the decline in trade barriers. The second significant driver of globalization is technological change that promotes various developments in communication, data processing, and transportation options (Hill, 2021). Compared to the first factor, where theoretical possibilities are considered, technological change is related to a tangible reality that all organizations involved in global operations regularly face (Hill, 2021). Communication between the company and customers may be improved, transshipment from different modes is facilitated, and the Internet allows a quick exchange and coordination of information. As such, the two ways how technological change might affect Annex are increased employee productivity and improved communication processes. The company has already implemented information technology in online card payment and phone transactions (Marketline, 2020). It does not take much time for employees to reach their customers, learn their current needs, and offer the services in demand. However, identity theft and hacking create serious challenges during communication processes, and Annex should promote online security and implement various innovative ideas (Marketline, 2020). The chosen globalization driver is a unique contribution to the company’s performance and communication improvements.
Currency Fluctuations Outcomes
In addition to the offered globalization drivers, currency fluctuations might affect Annex’s performance and the development of global operations. These changes are usually associated with reducing exchange costs, mitigating currency risks, and increasing price competition in the industry (Hill, 2021). The impacts on product prices are two-fold: a weak currency is expected to produce expensive imports, and stimulating exports results in cheaper purchases. According to Hill (2021), currency fluctuations can make unprofitable trade profitable in investment operations and vice versa. Thus, the outcomes depend on the organization’s readiness to deal with these instabilities. On the one hand, Annex has a solid capital base that ensures capital adequacy (Marketline, 2020). On the other hand, the company’s weakness is its business revenue mix and the dominance of processing fees (Marketline, 2020). Annex faces many additional costs to cover rewards, marketing, and credit operations. Imported goods will change in value with new global operations, and organizational performance will improve. By addressing strengths and opportunities, it is possible to manage currency fluctuations, maintain its competitive advantage, and offer the best options for customers.
Conclusion
The connection between globalization and the company’s SWOT analysis is explained through the prism of the existing drivers and expected impacts. In this case, Annex has a strong performance background and a variety of opportunities, which allows achieving positive results with technological change and declining trade and investment barriers. It is not for Annex employees to use the already offered strategies and communication methods but address recent innovations and learn what people might expect from this global payment provider. Competitive advantage, improved intermediate inputs, increased productivity, communication, expensive imports, and cheap purchases are examples of how globalization affects Annex’s global operations and services. Despite the possible threats, the strengths of the company are enough to gain benefits from globalization and related organizational shifts.
References
Grzegorzek, J. (2021). Opportunities and threats of globalization. Super Business Manager. Web.
Hill, C. W. L. (2021). Global business today (12th ed.). McGraw-Hill Higher Education.
Marketline. (2020). Company profile: American Express Co. Marketline.