Submitted by:Tushar Bansode (P904)Sumeet Gupta (P920)

Ashray SurekarVruti Mehta

Vineet Shahade

Agenda

About Citigroup

Vision , Mission , Brand Values

PEST Analysis

Citi’s Business level strategy

Citi’s Corporate Growth strategy

Citibank

SWOT Analysis (Citibank)

Citibank’s Strategies & Core Competencies

Competitor Analysis (Citibank)

Porter’s 5 force model (Citibank)

Citigroup

• Citi was incorporated in 1988.• Citi - a diversified global financial institution.• Citi is the first financial services company in the U.S. to

bring together banking, insurance, and investments under one umbrella.

• It provides a broad range of financial products and services to consumers and corporate customers globally.

• Citi has the world's largest financial services network.• It’s business covers 107 countries with approximately

2,000 offices in the world.

Citi in India

• Citi - a premier local financial institution. • Citi - the single largest foreign direct investor in the

financial services industry in the country.• A customer base of over

– 1500 large corporates and multinationals, – 2500 small and medium enterprises,– 40,000 asset based financing clients and– 7 million retail customers.

• It offers a comprehensive suite of products and services to both commercial and retail clients across all economic segments and lifecycle stages.

• Cash management throughputs at Citi India equal 40% of India's GDP.

• Citibank India’s e-business portal is the most visited Indian financial site.

• CFIL has financed over 130,000 trucks in India.• Citigroup Global Services, is one of India’s largest BPO

service providers and services Citi operations in 36 countries.• Citi - the first company in India to introduce stock options for

its employees.• Citi - the first financial institution to export software services

from India.• Citi has provided core funding of Rs. 15.4 crore to the Indian

School of Micro Finance – the first such school in Asia.

Facts about Citi India

Segments

Citicorp

Regional Consumer Banking

Institutional Clients Group

Citi Holdings

Brokerage and Asset Management

Local Consumer Lending

Special Asset Pool

Corporate

Treasury

Other corporate expenses

Operating Regions

Regions North AmericaEurope, Middle East & AfricaLatin AmericaAsia

Vision and Mission

Vision

To be the leader in providing business

process management services to help

customers.

Mission

“Our goal for Citigroup is to be the most respected

global financial services company. Like any other public company, we're

obligated to deliver profits and growth to our

shareholders. Of equal importance is to deliver

those profits and generate growth responsibly.”

Citi Brand Values

• Citi’s corporate businesses leverage the Citi identity.• Citi’s consumer businesses worldwide leverage the

Citibank brand identity.• It represents everything the pre-eminent global financial

services company stands for :

intelligent, engaging, human, friendly and innovative.

• Across the globe, the overarching brand values of Citi are focused on preserving its reputation as the most respected global financial services company in the world.

PEST Analysis

Political Influence

• Citigroup – major corporate political spender• Citigroup operates in more than 100 countries

worldwide; they obey legislation specific to country• Election Cycle Trends - significant donations to 527

groups• Trade Association Activity

– contributed approximately $8.5 million in corporate funds to political activities since 2002

Economical Influence

• As a multinational, Citi is subject to fiscal policies employed by governments in various countries.

• Incurred loss of $22 billion during Global downturn 2008.• Citi’s financial results are closely tied to the global and

local economic conditions– liquidity of the global financial markets– prevailing interest rates– the rate of unemployment – the level of consumer confidence – changes in consumer spending – the number of personal bankruptcies

Social Influence

• Target is Individual consumers as well as small medium businesses

• The Citi Foundation is committed to maintaining economically vibrant and environmentally sustainable communities

Technological Influence

• Citigroup Works with Cisco Systems to Capitalize on Digital Media– to help Citigroup identify appropriate intellectual capital to

distribute to clients and employees– to help the bank develop the right advanced content

delivery, multicasting, and core-networking technology to disseminate it.

• Use technology for e-Business model• Early adopter of emerging technology

Generic business level strategy

Citi follows “Differentiation Strategy”

Corporate Growth Strategy

Vertical IntegrationForward or Backward

InternationalGlobal or Multi-domestic

Horizontal Integration

DiversificationRelated or Unrelated

CorporateGrowthConcentration

Citi’s diversification strategy

• Diversify into related businesses under some coherent strategic theme

• Potential benefits of related diversification• Cross-business sharing of expertise, capabilities and technology• Exploit economics of scope and capture synergy benefits from

combining similar operations of different businesses• Enable collaboration to develop new strengths and create new

competitive capabilities • Leverage use of a company’s brand name• Increase market power

• Drawbacks of related diversification• Difficulties of integrating the operations of businesses with

different cultures

Fundamentals of Citi’s Strategy

• Client focus• Global strength• Constant innovation

History

• 1812 - founded as City Bank of New York. • 1894 - became the largest bank in the United States. • 1902 - began expanding internationally and became the

first major U.S. bank to establish a foreign department. • 1930 - became the largest bank in the world with 100

branches in 23 countries outside the United States. • 1976 - changed its name to Citibank. • 1981 - purchased Diners Club.• 1994 - opening of the first fully foreign owned

commercial bank in Russia • 1995 - opening of the first full service branch in China• 1998 - Citibank was merged into Citigroup

Citibank

• Citibank is the consumer and corporate banking division of leading financial services company Citigroup.

• The company has operations in around 1,700 locations, in more than 140 countries worldwide.

• Citibank offers the following products and services:– Banking services– Credit cards– Mortgages, Loans– Investments– Insurance– Small business services– Corporate/Institutional services– Asset management– Government services– Private banking

The Citicorp- Travelers merger

• Path to one stop financial shop.• Citigroup – able to service consumers,

corporations around the world as a universal bank.

Mission

Our core mission is not to be a financial supermarket or a “shadow bank.”

Our core mission is to be

the global bank

for institutions and individuals,

and to serve our clients with distinction.

We bring them

unique value through our

global reach and innovative solutions.

Value Chain

Citibank represents both a Business-to-Consumer (B2C) and Business-to-Business (B2B) organizational model.

• limiting the intermediaries involved with the distribution of its product, • streamlining its business and • reducing costs.

It creates value by

This value creation ultimately increases profits.

SWOT Analysis

Strengths• Global network• Backing of the

Citigroup• Innovative product

offering • Comprehensive

selection of financial products and services.

• Strong privacy and data policies

• Good Corporate Citizen

Weaknesses• Tarnished brand

name• Online operations are

geared towards US clients

• Issues of Corporate Governance - Size of company challenges clear focus across all divisions.

Opportunities• Growth markets• Chinese market• Online presence• Strengthen customer

relationships by community involvement

• Look for acquisitions that are compelling strategically and financially

Threats • Foreign exchange

fluctuations• Market conditions• Regulatory forces• Competition from

brick and mortar banks, combination brick and clicks and pure play bank entities and financial services providers

Citibank Strategies

• Position itself as US leading International Bank• A Premier local financial institution• Focus on Technology• Full Fledged platform of highest quality services• Innovative products• Focus on corporate and multinationals• Banking upon an old and trusted name• Corporate Social Responsibility

Citi @ Online

• Citibank's strategic intent is to convert its traditional money management business into an e-business framework.

• The goal of Citibank's strategic processes is to

"be the payment/settlement site of choice in the B2B and B2C flows, as well as a provider of value-added solutions for net businesses".

• Citibank's new initiative in industry exchanges and tailored solutions for industry leaders helps them differentiate themselves in these markets and gain competitive advantage by e-enabling themselves for the new e-world.

Core Competencies

"A core competency is an area of specialized expertise that is the result of harmonizing complex streams of technology and work

activity."

– C.K.Prahalad

• Core Competencies:– Proprietary data– Operating in over 100 countries and as a local bank, serving

growing companies in 78 emerging-market countries and territories

– Citigroup is considered a leader in online financial services– Additionally, Citibank's technology platform supports it

customer's need for transaction efficiency and tangible business results.

Competitor Analysis

• Bank of America:– Provides a demonstration of their online banking

product– Clearly defines their policy for online banking that

guarantees $0 liability for unauthorized bill pay

• Wells Fargo:– E-business aggregation

Porter’s 5 forces - Citibank

Threat of New Entrants

• Low / high (exceptions)• Existing loyalty to major brands• Huge Investments• Incentives for using a particular buyer (such as frequent

shopper programs) • High fixed costs • Scarcity of resources • High costs of switching companies • Government restrictions or legislation• There is virtually no chance of a new entrant significantly

affecting the major banks' market share. The only place that new entrants may have a chance in the industry is through Internet banking, because of its low cost.

Power of Suppliers

• Low to medium• There are very few suppliers of particular product categories• There are almost no substitutes in some product categories• Switching to another (competitive) product is very costly • The supplying industry has a higher profitability than the buying

industry .• Opportunities:

– Because of the increasing amount of technology Internet banking will begin to replace traditional banking, thus cutting personnel costs.

– Incorporating investment banking into the banking industry, as some major companies are doing.

• Threats: – An increase in interest rates causing a decline in bank activity.– A collapse of the Fed leading to bank failures, a repeat of the crash of 1929.– A decline in the US economy leading to a fall in the value of the dollar, thus

causing an instable economy.

Power of Buyers

• Medium to High• Large number of buyers • Purchases large volumes • Concentration Ratio is medium being international• Information is easily available to the customer• Switching to another (competitive) product is simple • The product is not extremely important to buyers; they

can do without the product for a period of time • Customers are price sensitive

Availability of Substitutes

• Low to medium• Internet• If substitutes are similar, it can be viewed in the same

light as a new entrant• Presence of companies like Western Union, PayPal and

Xe.com• This is not really an issue within the banking industry,

because there aren't really any legal alternatives, except buying a safe and borrowing from a loan shark

Competitive Rivalry

• A highly competitive market might result from:– Many players of about the same size; there is no dominant firm – Little differentiation between competitors products and services – A mature industry with very little growth; companies can only grow by

stealing customers away from competitors– Technologically Advanced companies– Introduction of new products by competitors

• The banking industry is continuing to restructure and position itself for our changing economy as a result, many mega-mergers have occurred in recent years. Citicorp and Travelers Insurance agreed to merge in April 1998 at a value of $70 billion.Bank mergers are usually consummated as a cost-cutting measure but also to compete with non-bank providers of financial services.

Suggested Strategies

• Strengthen customer relationships by community involvement

• Communicate benefits of online presence clearly• Look for acquisitions that are compelling strategically

and financially• Handle major international operations from India to gain

expenses benefit• Position itself as a Global bank focusing on Indian

consumers benefit• Innovative products in emerging businesses like

mortgage, equity, consumer finance

Thank You