Capita. Philip Friedman Business Administration Capstone – BUS 499 3/04/2010 Conduct an External Environmental Analysis, and identify key environmental forces that have Immediate strategic Implications for Capital One. The key environmental forces that could have Immediate strategic Implications for Capitol One in my opinion will stem from the following segments; Coloratura, Political, Economic.
To date the economy isn’t in good condition, people are being laid off, companies are going belly up, and families across the nation are being kicked out of here homes by the very companies that are responsible for the state of the economy. Despite the very well known troubles the middle class faces bill collectors do not let up, regardless of years worth of on time payments and loyalty. With legislation becoming Involved recently in tactics utilized by credit card companies new laws have been passed reflecting a growing discomfort amongst the public.
Early in 2005 The Minnesota state attorney general’s office had sued Capital One, claiming it is misleading consumers with promises of “fixed” interest rates, then hiking their tastes as much as 400 percent (Sullivan, Bob. 2005. Capital One sued over marketing practices. Para This situation alone ties in the above mentioned segments. People are rued of It, especially anyone who has had to deal with the misfortune. You learn quickly who most concerned about the customer. The economy Is bad; the people are feeling powerless, abused, and uneasy. That’s bad business.
External Environmental Analysis
I think that people are going to be very selective as to who they create financial relations with from here on out. Who ever respond most ethical with true flexibility will win out in the end in arrest share. It’s my belief that the mass has begun to do their home work on who is who and what is what, It’s about time. I was laid off In 0112010 and have learned what companies actually treat you well In the face of financial disaster versus those who suddenly treat you with contempt once It’s realized you can’t make a full payment. I do believe this will carry over with many consumers.
Conduct an Internal Environmental Analysis, and identify the capabilities and weaknesses within Capital One that have immediate strategic implications. One of Capital Ones internal weaknesses is its annual expenditures on advertising fees in comparison to the company’s major competitors. In 2004 Capital One spent $285 million and then another $5. 4 million on advertisements that 30% of a poll taken TLD even care for while 12% liked it a lot, many professionals gave the opinion that much of the profits have been consumed by marketing ((Hit, M. , Ireland, D. Hosking’s, R. 2009. Peg. 70). Capital Ones large collection of sub prime customers also shows itself as a weakness. During the recession of 2001 – 2004 and new laws coming to light concerning the declaration of personal bankruptcy Capital One decided to stop depending on sub prime customers as teen are more Kelly to declare Attendance or adult on payments. The tightening of controls combined with the cut back of dependency on sub par customers caused Capital One to suffer a smaller profit margin, raising interest rates, and a 40% drop in its shares (Hit, M. , et. L. 2009. Peg. 71). Capital Ones internal capabilities consist of it’s on the mark acquisitions and technology. The rising strategy used relies on its Information Based Strategy (BIBS). According to Wackiness (2010): Capital Ones acquisitions also prove to be on time with their strategy, enabling them to break into new markets, countries with companies that support the ideas they already have rolling out. They have bought companies in the UK such as Hibernia, Auto dealership finances like Onyx in California, and Merrier who is in the orthodontist industry in the states.
The CEO of Capital One, Fairbanks, all of the acquisitions are a natural extension of the diversification strategy they have en pursuing for some time, stating the strengths of each company compliment each other (Hit, M. , et. Al. 2009. Peg. 71). Define Capital One’s business-level and corporate-level strategies, and evaluate their potential for continued success. Evaluate the strategic fit of Capital One’s recent acquisitions. Describe the key strategic issues raised by the company’s acquisition strategy.
The related acquisition of Hibernia leaves Capital One in a position to gain providing they can break and make ground in Texas. The acquisition will provide them with greater arrest power, and it saves them the time of gaining ground in TX being that Hibernia has already taken to that project, they need only cultivate it with the use of BIBS and business strategy. Hibernia brick and mortar branches, 109, will be used as a launching pad for marketing its various offers and BIBS technique (Hit, M. Et. Al. 2009. Peg. 69). The purchase of Onyx and Merrier, Capital One has Jumped the barrier entry fence in to auto financing, enabling them to provide more info into the BIBS so that they can cultivate that business unit also as they will do with Merrier information. The strategy they seem to be employing is buying companies that either gains them access into new markets or is doing well in a market they already have a stake in.
The cross boarder Acquisition of Huffs allows them to rapidly enter the market without learning about the local institutional barriers on its own, though I don’t imagine many exist between the I-J and America, I believe we are on the same page. Nonetheless the purchase was to strengthen its Global Financial services subsidiary in the British market (Hit, M. , et. Al. 2009. Peg. 65). There aren’t many issues that are active for Capital one raised by its acquisitions, they seem well calculated, and conservative, meaning they aren’t out buying things up Just to be beefy, lean and precise seed mot the goal with their acquisitions.