Capital One Case - Teaching Web Server

(5 pages MAXIMUM)
Questions for preparing this individual written analysis:
1. What are the DIFFERENCES between a customer profitability
strategy and a customer loyalty strategy? Why do so many companies
design strategies to increase loyalty and retention instead of focusing
on customer profitability? Under what conditions might a customer
loyalty strategy appear identical to a customer profitability strategy?
2. What is a customer profitability gradient? Why is this gradient so
important to modern information-based profitability strategies?
3. Capital One was a high cost producer during its early history (others
had larger scale economies) and low price provider (offering large
discounts to customers). How were they ever able to achieve profits
with higher costs operating costs and lower prices than competitors?
4. It would seem reasonable that existing players (defenders) should
ALWAYS enjoy an information advantage relative to new entrants
(attackers) attempting to capture their customers. That is, the attacker
is making educated guess regarding who might be profitable, but the
defender should have more accurate information regarding who has
already been profitable. Why do some attackers encounter situations
where existing dominant firms are unable to defend themselves
effectively in spite of having better information than new entrants?
5. Will Capital One be able to sustain its competitive advantage in credit
card banking? If not, what options are available for the firm to
develop new strategies to leverage their core competencies? If so,
what should other firms do to compete with their successful model?