Capital One Case Study Essay

613 Words Mar 29th, 2013 3 Pages
Case questions

1. What is their business strategy to grow profitably and compete over the long term? * Get customer data from whatever sources are available, loading it onto our systems and analyzing it * Put together products that will appeal to different types of people, by testing whether hypotheses are right, looking at the result of these tests, modifying the hypotheses and testing again, and so on * It is all centered around understanding and analyzing information * Capital One can address a much wider group of potential credit card customers, offering credit facilities to individuals who traditional card companies regard as high risk * To do so, it Aggregates as much data as possible on customers - from
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* Scientific test i. Formulate a hypothesis ii. Develop a test or way to test the hypothesis iii. Perform the test iv. Observe the test and the results v. Evaluate the results * Scientific testing plays a major role in the company * Anyone in the company can propose a test, and if the results are promising, Capital One rushes the new product or approach into use immediately * It helps to find key factors, such as the clickstream that brings a customer to its Web site, that help identify fraudsters, computer-generated applications, and poor risks * It also refined its pitches and tested ad strategies * It saved the company from expensive mistakes 4. Describe the information technologies/systems used to support the “scientific test” approach. Are these investments justified? * No human are involved when collecting data * We get data from standard places such as the Post Office address file and credit checking agencies such as Equifax and Experian * We bring all the data in, we normalize it and clean it up using a software package from Trillium * And then we use tools from business intelligence software vendors such as SAS Institute and Brio for deep analysis * You end up with a body of knowledge that has accumulated over time. Soon you begin to see that the behavior people exhibit indicates whether they are more or less likely to default * Because of the data that its system has

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