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Capital One Financial Corporation

             Capital One began as the credit card division of Signet Bank. Founders Richard Fairbank and Nigel Morris implemented their Great Idea for Information-Based Strategy at Signet, and by 1994 they grew the credit card division to the point where it accounted for half the value of the bank. At that point Fairbank and Morris split from Signet Bank, became their own credit card company, Capital One, and issued an IPO. Since then, the company has grown to become one of the largest credit card companies in the United States, with $20 billion in outstanding loans and 27 million accounts by 2000. .
             In the following report, I will address issues surrounding the success of Capital One, such as: .
             Does Capital One enjoy a competitive advantage?.
             How was competitive advantage achieved?.
             Why were the opportunities identified by Signet Capital One first exploited by a relative outsider -- a small regional bank under the guidance of consultants rather than bankers?.
             Is the advantage sustainable? Can other banks erode the advantage?.
             What are some of the other applications of Capital One's information-based strategy?.
             Does Capital One enjoy a competitive advantage?.
             Capital One, a company that emerged from a Great Idea of the founders Rich Fairbank and Nigel Morris, definitely enjoy a competitive advantage. A competitive advantage arises when a company outperforms the competitors in its market, in that the firm's product does not only create positive value, but it creates more value than its competitors. Capital One's competitive advantage is evident in that the bank has been outperforming most of its competitors in terms both of market share and of margins. Also, Capital One's stock price has more than doubled since it's 1994 IPO, significantly outperforming both the market as a whole and the banking sector. .
             How was competitive advantage achieved?.
             Capital One's competitive advantage is contributed to their Information-Based Strategy (IBS), which allows the company to employ mass customization based on results of tests performed in the market place.

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