Capital One

Capital One - Lee Hoeppner October 5, 2009 Management 491...

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Lee Hoeppner October 5, 2009 Management 491 Case 6 Capital One: the American Credit Card Company’s Growth Strategies Capital One Financial Corporation is a diversified bank holding company that has transformed itself into one of the largest financial institutions in the United States by continually incorporating a steady flow of products. Capital One is now switching from just being a credit card company to now doing banking and other financial services to its customers. Capital One issues both MasterCard and Vista credit cards to its consumers. They grew their company by 29 percent from 1994 to 2004. They offer both gold and platinum cards to its customers that have a very good credit history, giving them additional benefits of using the credit card. They also provide auto financing, mortgage services, credit insurance, and home-equity loans. Capital One uses FICO scores to rate the credit history of its customers using their cards. They started a new strategy to mailing credit card applications to students in which they had a very successful return rate with them filled out. Capital One is not only located in the United States, they also have branches in the United Kingdom, South Africa, and France. After a while Capital One realized that the auto market was much bigger than the credit card company, so they shifted to the focus on auto financing to build their company. In March of 2005, Capital One decided to purchase the Hibernia National Bank in Louisiana. This helped provide a lover cost of funding. The acquisition of Hibernia helped to increase profit margins due to increased interest expenses
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Capital One - Lee Hoeppner October 5, 2009 Management 491...

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