Capital One Financial Company1. How is Capital One's use of IT different from other mass customization strategies? Capital One uses IT through its information-based strategy (IBS) to “record, organize and analyze data about the characteristics and behaviors of its customers,” as stated by CEO Riccardo Fairbank. Their philosophy was to leverage information by building scientific models that could be used to both assess the creditworthiness of potential cardholders through FICO scores, and to personalize product offerings for existing ones. This was done through data mining, sorting, personalizing offers and marketing campaigns, then analyzing this data to see which campaigns worked, for what reason, and what they returned in terms of revenue and profit generation. This differs from other financial institutions in that these other institutions compiled data manually, accepted applicants based on debt-to-income ratio, and all charged the same interest rate and annual fee. Capital One saw direct marketing as a means of recording every interaction with a customer electronically. It allowed them to customize products for each customer and ensure each interaction was unique. Direct marketing has given Capital One the ability to transform a company into a scientific laboratory where every decision related to product design, marketing, communication channels, credit lines, customer selection, collection and cross-selling decisions could be systematically tested using thousands of tools. experiments. It also allowed products to be launched nationwide and at full speed once they were found to work, without incurring the large fixed costs that accompany physical operations. It gave them the potential to reinvent the entire economics of a company. Capital One realized that few products were being marketed directly and that even fewer companies were fully exploiting the power of statistical analysis. In 1994, Jim Donehey was tasked with upgrading Capital One's IT system. His solution was to replace old mainframe computers with an object-based system, but this technology had never been used on such a large scale. In contrast, two-thirds of Capital One's competitors have outsourced their IT functions. Within 5 years the company had the world's largest Oracle database with 23 terabytes of data, earning the Gartner Group's Excellence in Technology Award.2. How sustainable is Capital One's advantage?