The project is to make a recommendation to American Express Bank, Ltd. -Travel Related Services Indonesia, on the need for representative offices in major cities in Indonesia in relation to the increasing number of merchants, which are required to anticipate the Blue Card launch.

We collected and evaluated data from various sources: American Express, credit card industry, and other related industries. The other industry data are savings, phone lines, yellow pages advertisers and spending, cellular phone subscribers, and Bank Central Asia's Automated Teller Machines and branches. The evaluation is to compare the American Express' city profile to that of the credit card industry and other related industries. We also analyzed the implications of the Blue Card launch to the need for representative office and to the increment of revenue.

In the recommendation, we developed The Path-Matrix showing that the opening of branches has to be based on the Blue Card launch. Opening a representative office in a city where the Blue Card will not be full-launched is not considered feasible. American Express should concentrate first on the first-tier cities: Jakarta, Surabaya, Medan, and Bandung, because these cities contribute around 90% of the credit card industry activities and have not been well penetrated yet. Therefore, it is required to have representative offices in these first-tier cities. Opening representative office in the second-tier cities -Semarang, Ujungpandang, Balikpapan, and Batam -should be considered if the Blue Card will be full-launched in those cities. American Express should maintain its representative offices in the tourist destination cities: Bali and Yogyakarta. In summary, the current American Express representative office setting is just fine.



Research Location: American Express Bank, Ltd.

Supervisor: Hadi Satygraha, Ph.D.

Accepted: 29 January 1999



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