Session 25: Capital One Case Study Questions

CapitolOne Case Homework Questions:

1) What is Capital Ones business and who are their competitors? (lists)
a) Business: Financial Instiution
b) Specialized in credit cards, loans and banking/savings products
c) .Competitors: Citigroup Global Markets Inc.
d) JP Morgan Chase & Co.
e) The Goldman Sachs Group, Inc.
f) Morgan Stanley
g) Merrill Lynch & Co., Inc.
h) Lehman Brothers Holdings, Inc.
i) UBS Investment Bank
2) Per the case study, what is one of their major strategies to grow profitably and
compete? (list)
a) Product/Market strategy
b) Market/Customer segments
c) .Offer credit card opportunities to those with poor credit histories
d) There are those with bad credit histories who would pay higher interest
rates and pay back credit advances in a timely fashion
e) .Use data stored in information systems to target certain demographics
f) Offer those within the target audience these new credit card packages
3) How do they use information to implement their strategy? What kinds of
information do they use and where does it come from? (table)
Information Employed in the Capital
One Credit Card Process
How much spent by customer, location
and time
Payment history
Personal information about each card
holder
The integration of data from the various
transaction systems to create
longitudinal views of patterns of use
A model for credit card risk
assessment, scripts that are employed
when interacting with new applicants

Sources of This Information

Enterprise-wide transaction processing
systems
Transaction Processing Systems
Customer Relationship Management
System
Decision Support System and
Transaction Processing Systems
Expert System

4) List and describe the information technologies used to support their strategy?
(table)
IM/IT Enabling Information System
prepared by rmk 022414

Description
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Session 25: Capital One Case Study Questions

Enterprise-wide Transaction
processing systems
Transaction processing systems

Enable credit card account

management
Capture every single one of the
customers transactions recording
how much was spent and when and
where
Capture data pertaining to payment
history like which customers pay off
theirs cards and how long it takes
them to do so

Customer Relationship
Management System
Decision Support System

Expert System

Captures personal information

about each card holder/applicant
Brings together all the data from
the different information systems
and creates a longitudinal view of
patterns of use of customers
Provides scripts that are employed
when interacting with new credit
card applicants

5) Describe their notion of a scientific test. Contrast this approach to product

development and launch with a more traditional approach that a
manufacturing company might use to determine how much product to
produce. (table)
Traditional Manufacturing Approach
Research & development
Create a prototype or model of the new
would-be product/service
Conduct market research on consumer
trends and tastes
Pilot the test credit card with customer
focus group
Produce the amount of units determined by
the market research
Launch the new product/service to the
public

Capital Ones Scientific Testing Approach

Conduct market research
Speculate ideas on how to grow and
expand
Turn to an information-based strategy that
exploits data that is already at hand within
the organizations information systems
Collect data from all the various
information systems
Use a DSS to integrate all the data
Create models
Analyze and assess the models for patterns
and trends
Employ the newly discovered knowledge
and launch the new product/service

prepared by rmk 022414

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