Session 25 Capital One Case Homework Questions student worksheet
CapitolOne Case Homework Questions:
1) What is Capital One’s business and who are their competitors? (lists)
a) Business:
i) Financial management ii) Credit cards iii) Home and auto loans iv) Investing
v) Banking vi) Savings
b) Competitors:
i) Credit One Bank ii) Wells Fargo iii) American Express iv) Bank of America
2) Per the case study, what is one of their major strategies to grow profitably and compete? (list)
a) Credit risk assessment model
b) Cater to an underserved market:
i) People willing to pay higher interest ii) Turn customer’s weakness (late/small payments) into higher cash flow
c) Charge high interest rates:
i) Incentive to pay quickly ii) Recoup cash quicker from customers
d) Thousands of credit card packages:
i) Tailored to each customer ii) Build customer relationship and loyalty
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
Sources of This Information
Average spending of each customer:
Set the credit limit
Customer incomes
Compare spending data to trends:
Growing demand of normal goods
Harsh economic times cash strapped customers
Average timeliness of repayment
Determine late charge fee
Look at quality of repayment
Personal credit score and card utilization
Determine loyalty to card/banking service
Competitor’s current offers and rates
Individual credit scores:
Assess customer risk
Credit checking agencies
Where to advertise
Market research:
Income by geographic location
Click stream behavior
Trends in behavior and preferences of risky customers
4) List and describe the information technologies used to support their strategy? (table)
IM/IT Enabling Information System
Description
Knowledge management system
Credit assessment:
Provide scripts to service customer based on stored data
Decision Support System
Organizing CC data to analyze
Present trends: customer behavior
CC
1) What is Capital One’s business and who are their competitors? (lists)
a) Business:
i) Financial management ii) Credit cards iii) Home and auto loans iv) Investing
v) Banking vi) Savings
b) Competitors:
i) Credit One Bank ii) Wells Fargo iii) American Express iv) Bank of America
2) Per the case study, what is one of their major strategies to grow profitably and compete? (list)
a) Credit risk assessment model
b) Cater to an underserved market:
i) People willing to pay higher interest ii) Turn customer’s weakness (late/small payments) into higher cash flow
c) Charge high interest rates:
i) Incentive to pay quickly ii) Recoup cash quicker from customers
d) Thousands of credit card packages:
i) Tailored to each customer ii) Build customer relationship and loyalty
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
Sources of This Information
Average spending of each customer:
Set the credit limit
Customer incomes
Compare spending data to trends:
Growing demand of normal goods
Harsh economic times cash strapped customers
Average timeliness of repayment
Determine late charge fee
Look at quality of repayment
Personal credit score and card utilization
Determine loyalty to card/banking service
Competitor’s current offers and rates
Individual credit scores:
Assess customer risk
Credit checking agencies
Where to advertise
Market research:
Income by geographic location
Click stream behavior
Trends in behavior and preferences of risky customers
4) List and describe the information technologies used to support their strategy? (table)
IM/IT Enabling Information System
Description
Knowledge management system
Credit assessment:
Provide scripts to service customer based on stored data
Decision Support System
Organizing CC data to analyze
Present trends: customer behavior
CC