Capital One Financial Corporation

"The strategy leverages information technology, scientific testing, and a highly flexible operating infrastructure to deliver the right product, to the right customer, at the right time and at the right price." However, there was a long road that lead to Capital One achieving their competitive advantage, one that started with the creation of The Great Idea. .
             The Great Idea was Richard and Nigel's vision for radically transforming the credit card business within banks, so that credit card issuers could acquire profitable market share and develop competitive advantage through IBS. The basis of The Great Idea stemmed from insights realized by studying the credit card business of many of their consulting clients at the time. Richard and Nigel realized that:.
             The credit card industry was characterized by competition among banks for scale and market share, therefore the credit card business had made the transition to consolidation in the hands of the large players.
             The average cost of acquiring new accounts in this competitive environment was high.
             By increasing their customer base, banks were able to spread high fixed costs across their large number of accounts, thus enabling them to lower prices through economies of scale.
             Banks used uniform pricing strategies, yet not all customers are equally profitable to serve. The banks were using a 'black box' credit scoring models, which did not allow for change in the algorithms, when deciding whether or not to offer an account to an applicant.
             Fewer entry barriers would exist when improving the profitability of a bank's existing credit card portfolio than attempting to create a new brand. .
             Based on these realizations, Richard and Nigel created a plan in which they would take advantage of the existing opportunities the market offered, while benefiting from economies of learning, implementing their test and learn technique. .
             After years of testing and learning, Richard and Nigel had successfully found their competitive advantage in that they were able to customize almost anything.