Capital One Capital One Financial Corporation 1. How is Capital One's use of IT different from other mass customization strategies? Capital One uses IT through its information–based strategy (IBS) to "record, organize, and analyze data on the characteristics and behaviors of their customers," as stated by CEO Richard Fairbank. Their philosophy was to exploit information by constructing scientific models that could be used to both assess the creditworthiness of potential cardholders through FICO scoring, and to customize product offerings for existing ones. This was done through data mining, sorting, customizing offers and marketing campaigns, and then analyzing this data to see what campaigns worked – for what reason and what...show more content... Behavioral interviews, case interviews, and standardized tests were used to find raw talent without focusing on prior industry or marketing experience. These four things are what separates Capital One from its competition, and will sustain their competitive advantage in the future. 3. What are the consequences of Capital One's IT strategy for expansion into different segments of the credit card industry, and into other industry's? The immediate consequences of their expansion strategy proved the efficiency of their statistical modeling to inhibit Capital One from taking any missteps into industry's that are either saturated or do not allow enough growth in the future. Capital One considered expanding into auto insurance and auto financing, but fierce competition, low margins, and stringent regulation kept them from pursuing this immediately. (Capital One did recently acquire Summit Acceptance Corporation – an auto financing company that focused on the sub–prime market). Next they looked at the energy and telecom industries, but consumer energy usage patterns are available publicly which kept them from exploring this option further. America One was created which resold blocks of calling time enabling Capital One to gain a foothold in telecom. An ancillary effect of Capital One looking to broaden its horizons into other industries will promote other companies to review their current IT systems to see where their inefficiencies lie, so they can Get more content on HelpWriting.net
