Evaluating a Corporate-Societal Relationship – Capital One Financial Corporation

Introduction

Capital One is a bank holding company based in McLean, Virginia that specializes in banking, credit cards, saving accounts, and auto loans. Most of its activities are based in the U.S.A. It is ranked as one of the biggest banks in the U.S.A, renowned for being a technology-focused company. The company has its primary products and services, as well as the impact that stakeholders have on the company’s financial performance and external factors that influence the company’s success.

Primary Products and or Services

Consumers’ banking, Credit cards, and commercial banking are the company’s products and services. Capital One is the third biggest credit card issuer, providing credit cards in U S.A, Canada, and the U.K. According to the Annual reports, Capital One domestic card average loans increased to 7% or $ 6.4 billion. Capital One provides consumer banking services, such as savings, checking accounts, money market accounts, and retail and car loans, through their direct banks and branches. Commercial banking – loans are secured by multifamily, industrial buildings, and commercial (Clemons, 2018).

Capital One provides automobile loans that are convenient and effective for its consumers.

Capital One has also participated in the sporting sector; it was a primary sponsor of the Capital One Bowl, a college football. Capital One also is among the sponsors of NCAA; they do advertisements and offer consumer data access. Capital One also sponsored an English soccer competition (EFL). The firm also sponsored Sheffield United F.C. The corporation also became the official sponsor of the Capital One Arena.

Capital One has several charitable initiatives.

Three Ways the Primary Stakeholders can Influence Financial Performance.

Stakeholders are persons who are interested in an organization’s services, mission, or products and may have an impact on them. The stakeholders have spurred an improvement in finance and management (Anne Lawrence. 2020). There are two sorts of stakeholders: primary and secondary. These are influenced by the company’s fortunes and have a direct impact on it.

Colleagues, communities, regulators, customers, investors, and shareholders are some of the most important stakeholders. The secondary stakeholders, on the other hand, are a different story. They have no direct financial impact on the company’s performance.

The key stakeholders’ interests are inextricably related to the company’s fortunes. The shareholders have a significant influence on the procedures that enable the Capital One Company and its management to function effectively. Economic, voting power, legal, and political remedies are only a few of the options. The shareholders’ decisions and methods have a significant impact on the financial situation. The disclosure of highly sensitive information to competitors by stakeholders may have a significant detrimental impact on the company’s financial performance. This is because competitors may be able to use that knowledge against them. Members of the board of directors should be chosen by the shareholders with the best interests of the firm in mind. If this is not followed, the company may face financial difficulties (Danso, 2020)

Maintaining financial performance requires a strong relationship between stakeholders and the organization. Companies having a good relationship with their stakeholders may have better financial performance than those with a terrible relationship, which may have poor financial performance and hence assist the company’s collapse. The procedures taken to reach a choice may also be influenced. When it comes to sells affairs, there may be a lot of arguments between the shareholders, especially if they have a strong feeling that their thoughts are not taken into mind. By building solid relationship bonds, stakeholders can help to revive the company’s status if it is operating poorly.

Investors, as stakeholders, can place a lot of pressure on management if the company does not meet its financial goals. In any case, not all stakeholders are interested in the company’s success. The pressure exerted on the organization by stakeholders may have a significant impact on the financial decisions made and techniques used.

Two Critical Factors where the External Environment can affect Success.

Factors that determine Capital One Financial Corporation’s performance include technological considerations (Mavi, 2018). They’ve accelerated their technological investments and transformation in a big way. They started from the bottom of the tech stack and rebuilt their infrastructure. They used agile approaches to manage work across their teams, and they built and deployed applications using APIs, microservices, and automation. Capital One’s apps have been updated. They went all-in on the public cloud and are now one of its biggest cloud providers. They’ve also stepped up their investments in contemporary data infrastructures, which will serve as the basis for machine learning and artificial intelligence capabilities.

Then there are political considerations. Capital One product are generally regulated by the Financial Conduct Authority. There are various restrictions that must be followed in order for services and products be offered to customers. If they are not reached, amendments and new laws may obstruct the services and product distribution of Capital One services and products. Changes in labor legislation, taxes, accounting, and internal marketing could all have a big impact on how the company’s products and services are distributed.

Biggest Success or Missed Opportunity to respond to a Recent or Current Social issue

The success of Capital One may be traced back to the 19th century. Capital One prioritized a technologically based strategy on building their brand identification by the customers. It has a marketing mix comprised of an aggressive marketing approach which is its promotional strategy. By merging technology, Capital One delivers a customized solution. Tools for Social networking are also utilized to improve customer connections. For example, tournaments and trendy hashtags are publicized on Twitter. Capital One uses a funny video web series for marketing its mobile banking service. The firm is also collaborating with marketing agencies and exploiting campaigns on Instagram to advertise its huge array of credit card alternatives. Capital One also uses a well-known celebrity to educate its customers, “Gronkonomics,” a personal finance book written by Rob Gronkowski that provides money-saving advice. Capital One became the second biggest car lending business in the United States as a consequence of its rapid expansion throughout the country. The success of Capital One has been made possible by the consumers’ optimism (Dana,2021)

CONCLUSION

Finally, Capital One Financial Corporation is the second largest auto finance company In U.S.A. It offers variety of products and services that are consumed all over in U.K, U.S.A and Canada. It was able to achieve its domination because of its marketing strategies through technological advancements. Stakeholders have had a significant impact on the company’s financial performance. Despite its success, the corporation has been impacted by political and technological forces.

Sources

1. Anne Lawrence. 2020. Business and Society: Stakeholders, Ethics, Public Policy. BUS475 McGraw-Hill Irwin 16th edition textbook.
2. Clemons, E. K., & Thatcher, M. E. (2008). Capital One Financial and a decade of experience with newly vulnerable markets: Some propositions concerning the competitive advantage of new entrants. The Journal of Strategic Information Systems, 17(3), 179-189.
3. Danso, A., Adomako, S., Lartey, T., Amankwah-Amoah, J., & Owusu-Yirenkyi, D. (2020). Stakeholder integration, environmental sustainability orientation and financial performance. Journal of business research, 119, 652-662.
4. Mavi, R. K., & Standing, C. (2018). Critical success factors of sustainable project management in construction: A fuzzy DEMATEL-ANP approach. Journal of cleaner production, 194, 751-765.
5. Dana, L. P., Gurău, C., Hoy, F., Ramadani, V., & Alexander, T. (2021). Success factors and challenges of grassroots innovations: Learning from failure. Technological Forecasting and Social Change, 164, 119600.