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Capital One Diversification Strategy

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For the threat of new entrants, the financial market in United States is fiercely competitive. The threat of new entrants is not serious for some companies that have been famous for a long time. Capita One continued to seek technological innovation and adopt the diversification strategy, they stick to running business including credit cards, auto loans, family loans, savings, personal credit, insurance and so on. According to the data on MBAlib website, by the end of 2017, the credit card loan balance of Capital One was 97 billion 100 million dollars, which is the third place in the U.S credit card market. The companies in the first and second is 141 billion 800 million of Morgan and 133 billion 300 million of Citigroup. The revenue of credit card accounts for 62.8% of the total revenue. …show more content…

and have great competitive advantages (118). So, it is very hard for new financial institutes to be threatening in the financial market. The success of Capital One will not be threatened by the rise of new companies due to their diversification strategy. Even if an industry is threatened, the other businesses of Capital One can still get profits. For U.S. bank, they do not need to worry about threat of new entrants. They have many loyal customers who already found suitable products and they have good faith records in U.S. bank. Even if new companies try to give up a certain amount of profits to give a more attractive interest to customers, we believe most customers will still choose a safer and more reliable bank and stay with U.S.

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