Abstract

Capital One is an unconventional financial institution that successfully entered the mature US credit card and subsequent banking industry by leveraging information technology with marketing and innovation. Pivoting its business model around statistical analysis to dictate new market entry strategies and new product introductions, Capital One’s strength lies in its ability to identify new pockets of growth and profit opportunities in segments that existing companies ignored or missed. This proved to be a critical success factor as it doubled in customer acquisition within 1 year of entering the credit card market with an equally successful story in the banking industry. The Canadian subsidiary of Capital One Financial Corporation, Capital One Canada just completed the integration of its first major HBC credit card portfolio acquisition. Now was the right time to determine the next opportunity: either to remain a stand-alone credit card company or diversify into banking in Canada. Explanation of the Canadian banking industry is provided in the case, along with some factors to consider when determining new market entry: regulations, competitors, and customers. The question the reader needs to answer is: given Capital One’s core competencies and the Canadian market, does Capital One Canada have what it takes to succeed in the Canadian banking industry or should it just continue its growth in the credit card market? What is the next opportunity for Capital One Canada? Explanation of the Canadian banking industry is provided in the case, along with some factors to consider when determining new market entry: regulations, competitors, and customers. The question the reader needs to answer is: given Capital One’s core competencies and the Canadian market, does Capital One Canada have what it takes to succeed in the Canadian banking industry or should it just continue its growth in the credit card market? What is the next opportunity for Capital One Canada?

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