Capital One Financial Corp: Setting and Shaping Strategy Essay

Strategy corking ace Financial Corps strategy is to develop and market harvest-homes and services to satisfy the demands of a competitory and ever-changing marketplace by utilizing information engineering science for mass customization which pull up stakes deliver the correct product to the right customer at the right time and at the right price.Such a strategy requires the purpose of talented people and a flexible culture promoting innovation to assist identify, develop and market products and services. swell Ones information-based strategy, or IBS, serves as the strategy to improve operations in every aspect of the company. IBS technology enables Capital One to provide more valuable products, thereby creating a positional advantage over its competitors. However, by boil downing on the IBS potency as its doctor competitive advantage, Capital One neglects any positional advantages, such as its brand, that tycoon become more valuable than the electric potential advantage IBS might yield elsewhere.AnalysisCapital One makes it a point to hire the top talent from top schools. dismantle though this is an fundamental initiative to obtain quality assets, it is just as important to organize such assets in a way that achieves competitive advantage. Capital One has done a good job aligning its organisational structure with its strategy. Its functional structure enables Capital One to facilitate technological excellence within each function and still achieve cross-functional communion of information or knowledge due to its loose span of departments. By aligning the internal organizational structure with the talented resources they become a source of competitive advantage.Capital One created a culture that rewarded selective information and fact-based decision making which flattened its hierarchy and promoted innovation. Employees were empowered to test and lease through all aspects of the organization. Performance reviews were conducted by peers and bo sses, providing constant feedback. Compensation was intemperately weighted on cash bonuses and long-term incentives further aligning employee behaviors with the long-term goals of the company.Departments were encouraged to work closely with each other, which promoted information sharing. This loose coupling benefited Capital Ones explorative initiatives in finding whole novel ways of doing things, rather than doing the same things better than the competition. Capital Ones IBS capabilities aligned with its internal functions enabled it to differentiate its source card product offering from the existing competitors. In so doing, it attracted the lowest risk applicants creating a completely juvenile super-prime market segment.Due to the explosive success of the credit card instalments, it would be very easy to patronise the Summit betrothal Corporation initiative. The IBS capability was slow applied to the credit sector, and one would generalize that this competitive advantage would be successful in other credit-based markets. Even though Capital One was in a position to easily leverage its existing IBS capabilities into products not previously considered, it would be difficult to support the America One initiative. There was a lack of synergy with Capital Ones existing operations, and the telecommunication market was a drastically different industry.AlternativesEven though Capital One experienced rapid growth and success in the credit industry due to its first-class IBS capabilities, it is clear that the companys strategy is lacking exploitive competencies. Systems adopt become increasingly complex and duplicative which could impact Capital Ones ability to react to environmental flip-flops quickly. The companys explorative focus on growth and change has made it difficult for the finance division to forecast effectively.The company must continually develop and deepen its live IBS advantage if it is to meet the challenge of competition both locally a nd globally. They ar great at exploring new opportunities but fall short from further exploiting those markets. They were able to get things done operationally, but were not able to tote up any additional value.Capital One needs to recognize that environments change and as they explore new opportunities, they may want to create new forms of competitive advantage. By focusing on the IBS capability as its sole competitive advantage, Capital One neglects any positional advantages, such as its brand, that might become more valuable than the potential advantage the capabilities might yield elsewhere.