Business Analysis of Discover Financial Services

 Analyze Historical Performance, Strategic Priorities, And Business Improvement Opportunities of Discover Financial Services

DISCOVER FINANCIAL SERVICES

Business Overview

Discover Financial Services, through its subsidiaries, operates as a direct banking and payment services company in the United States. It operates in two segments, Direct Banking and Payment Services. The Direct Banking segment offers Discover-branded credit cards to individuals; and other consumer products and services, including private student loans, personal loans, home equity loans, and other consumer lending, as well as deposit products, such as certificates of deposit, money market accounts, savings accounts, checking accounts, and individual retirement arrangement certificates of deposit. The Payment Services segment operates the Discover Network, which processes transactions for Discover-branded credit cards, and provides payment transaction processing and settlement services; and PULSE network, an electronic funds transfer network that provides financial institutions issuing debit cards on the PULSE network with access to automated teller machines and point-of-sale terminals. This segment also operates the Diners Club International, a payments network that issues Diners Club branded charge cards and provides card acceptance services. The company was incorporated in 1960 and is based in Riverwoods, Illinois.

Discover Financial Services

Discover Financial Services


R&P Rank: 381
Sector: Financial Services
Industry:Consumer Finance
H.Q Location:Illinois
Website: www.discoverfinancial.com
Company Address:
2500 LAKE COOK ROAD, RIVERWOODS IL 60015
Ph:224-405-0900

Business Analysis of Discover Financial Services

The Financial Services Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Discover Financial Services compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Discover Financial Services to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.

Here is the performance snapshot of Discover Financial Services with an interactive chart.

  1. Revenue Growth: Discover Financial Services reported a revenue growth of 0.2% year-on-year during 2016. Consumer Finance Industry grew at 5.0% in the same period
  2. COGS share of Revenues: Discover Financial Services COGS share of Revenues details are not available because either company does not share the data or we do not have it
  3. R&D share of Revenues: Discover Financial Services R&D share of Revenues details are not available because either company does not share the data or we do not have it
  4. SG&A share of Revenues: As a percentage of revenue, Discover Financial Services spent 49.5% of its total revenues on Sales, Marketing, and General Administration (SG&A). Consumer Finance industry average SG&A spending in the same period was 43.3%
  5. Inventory share of Revenues: Discover Financial Services Inventory share of Revenues details are not available because either company does not share the data or we do not have it
  6. Accounts Payable share of Revenues: Discover Financial Services Accounts Payable share of Revenues details are not available because either company does not share the data or we do not have it
  7. Accounts Receivable share of Revenues: Discover Financial Services Accounts Receivable share of Revenues details are not available because either company does not share the data or we do not have it
  8. PP&E share of Revenues: As a percentage of revenue, Discover Financial Services invested 10.1% of its total revenues on Property, Plants, and Equipments (PP&E). Consumer Finance industry average PPE investment in the same period was 25.3%
  9. Intangibles share of Revenues: As a percentage of revenue, Discover Financial Services invested 5.8% of its total revenues on Intangibles. Consumer Finance industry average Intangibles investment in the same period was 71.0%
  10. Net Margins: Discover Financial Services Net Margins in the year 2016 were 32.3%. Consumer Finance industry average Net Margins in the same period were 22.9%

Sector and Industry Association of Discover Financial Services

For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries. For high-level analysis purposes, related/similar sectors are grouped into sector groups.

Discover Financial Services is associated with Financials Sector Group, Financial Services Sector, and Consumer Finance Industry.

Financial Services sector is comprised of the following industries: Investment Services; Consumer Finance; Payment and Transaction Processing Services; Financial News, Research and Data. The definitions for each of the industries is as follows:

  • Investment Services industry includes investment banking companies, asset management companies, securities brokers and dealers, online brokers, and security/commodity exchanges.
  • Consumer Finance industry includes companies providing credit services and mortgage finance services.
  • Payment and Transaction Processing Services industry includes companies providing financial news, research, and data services.
  • Financial News, Research and Data industry includes companies providing payments and transaction processing services.

Industry Ranking of Discover Financial Services

With $7.2 billion revenues, Discover Financial Services ranked number 5 of all the companies in the US Consumer Finance industry. There were a total of 48 public companies in the US Consumer Finance industry that had revenues greater than $50 million during 2016.

The top-10 companies in the US Consumer Finance industry by revenues during 2016 were:

  1. American Express ($30.1 billion)
  2. Capital One Financial ($19 billion)
  3. Visa ($15.1 billion)
  4. Mastercard ($10.8 billion)
  5. Discover Financial Services ($7.2 billion)
  6. Synchrony Financial ($7 billion)
  7. Ally Financial ($5.4 billion)
  8. Equifax ($3.1 billion)
  9. Santander Consumer USA Holdings ($2.3 billion)
  10. CIT Group Inc ($2.1 billion)

Business Model Analysis (BMA) Framework

We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.

Next Steps

  • Conduct a holistic benchmarking; to identify and target additional sources of value
  • Get in touch with us to learn more about Business Model Analysis Framework
  • Get free data, charts, and analysis of Discover Financial Servicesand its peers on select key performance indicators by clicking the reports provided below

Industry Peers and Competitors of discover-financial-services

Capital One Financial (COF) Business Analysis – Analyze Historical Performance, Strategic...

Capital One Financial Corp with $19 billion revenues in the year 2016 was the number 2 Consumer Finance company. Read this report to know the top competitors of Capital One Financial and identify growth and cost optimization opportunities of Capital One Financial

Visa (V) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Visa Inc. with $15 billion revenues in the year 2016 was the number 3 Consumer Finance company. Read this report to know the top competitors of Visa and identify growth and cost optimization opportunities of Visa

Mastercard (MA) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Mastercard Inc with $11 billion revenues in the year 2016 was the number 4 Consumer Finance company. Read this report to know the top competitors of Mastercard and identify growth and cost optimization opportunities of Mastercard

Synchrony Financial (SYF) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Synchrony Financial with $7 billion revenues in the year 2016 was the number 6 Consumer Finance company. Read this report to know the top competitors of Synchrony Financial and identify growth and cost optimization opportunities of Synchrony Financial

Ally Financial (ALLY) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Ally Financial Inc. with $5 billion revenues in the year 2016 was the number 7 Consumer Finance company. Read this report to know the top competitors of Ally Financial and identify growth and cost optimization opportunities of Ally Financial

Equifax (EFX) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Equifax Inc with $3 billion revenues in the year 2016 was the number 8 Consumer Finance company. Read this report to know the top competitors of Equifax and identify growth and cost optimization opportunities of Equifax

Revenues Analysis

Discover Financial Services (DFS) Revenues And Revenue Growth From 2012 To...

This report provides the last five years revenues and revenue growth of Discover Financial Services (DFS) from 2012 to 2016. Discover Financial Services generated a total of $7.2 billion revenues during 2016. Discover Financial Services reported a revenue growth of 0.2% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in December.

Discover Financial Services (DFS) Revenues And Revenue Growth From 2005 To...

This report provides the last twelve years revenues and revenue growth of Discover Financial Services (DFS) from 2005 to 2016. Discover Financial Services generated a total of $7.2 billion revenues during 2016. Discover Financial Services reported a revenue growth of 0.2% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in December.

Discover Financial Services (DFS) Revenue Growth Comparison With Industry Growth From...

This report provides a comparison of Discover Financial Services (DFS) revenue growth with Consumer Finance industry growth during the last five years from 2012 to 2016. Discover Financial Services reported a revenue growth of 0.2% year-over-year during 2016. The Consumer Finance industry growth was 5% year-over-year during 2016. Discover Financial Services growth was slower than the industry during 2016.

Profit Analysis