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Capital One 1

Running head: CAPITAL ONE

Capital One: The American Credit Card Company’s Growth Strategies

Alicia Holden

BUS499

Capital One 2

1. Identify and describe the key environmental forces that have immediate strategic implications for Capital One.
There are many key environmental forces that have an immediate strategic implication for Capital One. First, the credit card industry has reached a high level of competition. This is a period of mergers and consolidations. Some institutes are selling off their credit card portfolio, others merging operations you might say that the industry is undergoing a period of flux. Secondly, the rise of personal bankruptcies has a direct barring on the credit card portfolio of Capital One. Thirdly, the economy; when the economy is in recession many things have a direct bearing on Capital One. Employees lose their jobs and fall behind on their credit card payments, this directly affects cash flow. Credit card holders may file for bankruptcy thus resulting in a bad loan discharge or times are just hard and are late paying their credit card payments. Capital One also faces a potential risk from its practice of funding from securitization. Capital One had to shift away from sub prime loans to a larger portion of prime loans as a result of federal regulations and many individuals defaulting on their loans. Each of these forces has a direct bearing on the operations of Capital One now and in the near future.

2. Identify and describe the capabilities and weaknesses within Capital One that have immediate strategic implications.
Capital One understanding their niche market realized that they must diversify into other market areas to seek new profit...

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