Capital One Financial Assessment External Research Paper

Excerpt from Research Paper :

The company's internal focus will need to shift dramatically in order to maintain or increase its current market position.

Corporate and Business Strategy

Capital One's business strategy is highly aggressive, as is evidenced by their innovative move (for a company with their focus) into the banking industry, and their take-over of several regional banks. Capital One also actively recruits new strategists to work directly at the corporate level, and maintains an internal strategy of frequent strategic change and innovative practices. This leads to an incredibly adaptive business strategy; Capital One has remained poised to exploit new opportunities in the changing banking market.

At the corporate level, Capital One has a healthy mixture of steadfast leadership (the CEO has remained unchanged since the company's formation in 1988) and innovation through new partnerships and new personnel. Like their business strategy, aggressiveness and adaptability have been key components of Capital One's corporate strategy. By incorporating new ideas and personnel into the corporate levels of the enterprise while remaining consistent in its leadership and focus, Capital One has remained viable and highly competitive throughout the many changes in environment the company has weathered.

Acquisition Strategy

Capital One's most recent acquisition, Chevy Chase Bank, only seems out of pace given the company's general public profile. The company has previously acquired two other regional banks, and is possibly poised to enter banking on a national level. Though there was a definite strategy shift when the company decided to enter banking, this acquisition strategy has remained strong despite the economic downturn and is a likely reason for their weathering of the chaos.

Given the continued uncertainty many financial firms and banks are still facing, the continuing strategy of acquisitions might be riskier than when the company acquired their first bank in 2005. Continued growth is necessary for increased profitability and market share, but determining the correct acquisitions is difficult in the current climate. Balancing growth and risk management are key strategic concerns in the immediate future.

International Position

Though Capital One has not begun extensive international operations, the company has already begun to earn a reputation as one of the best credit card companies to use internationally and when traveling. This growing reputation could help to position the company for a large entrance into international markets; as its products and services are already receiving positive attention in foreign markets, Capital One has some unique advantages over other firms that remain operational entirely and solely in the United States.

Capital One is also far behind other companies that have been long established in international markets, however, meaning that this entrance would introduce them to much fiercer competition than what they are currently experiencing in the domestic market. Again, a delicate balance between managing risk and taking advantage of unique and time-dependent growth opportunities must be central to Capital One's continued…

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