Citibank’s E-Business Strategy for Global Corporate BankingSyndicate 4 : Rachmi Rida Utami (29111305) - Yunus Arie Wiratama (29111322) - Joseph Enrico Hadi (29111349) - Pramadona (29111364) - Rieke Fitri Yuniar (29111310) - Ima Fatima (35012009)

E-Business Strategy for Global Corporate banking

Faced challenges in serving corporate customers with diverse needs.

E-business strategy was (connect, transform, and extend)

To web-enable its core services, develop integrated solutions, and reach new market

Aimed to build a single web enable platform for all customers with similar needs.

Problem

How could citibank build a flexible and agile e-business product that could capture its client?

There were different needs of customers MNCs required custom-built hot-to-host product interface SMEs were more conservative and not ready for web-

based solutions

How could Citibank integrate the Internet into its strategy and create competitive advantage?

Intense competition and dot com boom force Citibank and its competitors transform their business

The Business - core product

Core Produc

ts

Transaction

services

Corporate finance services

Treasury market services

External Environment

Segment Description

Political / Legal Regulators scrutinized third-party arrangements, to ensure the bank’s operation were not hijacked for fraudulent purposes

Technological The clients became e-enabledTendency for customers to collect payments online and access to more Web-enabled financial processes

Economical Subprime Mortgages

General Environment

Indicators Description

Threat of New Entrant Low – Having difficulties in investment all at once

Bargaining of Suppliers High – Requirement in critical technology

Bargaining power of buyers

High –Same technologies already applied in other companies, the people knowledge in technology had already increasing

Threat of Substitute Product

Low

Rivalry among Competing firms

Intensifies when the company want to improve market competition

Industrial Environment

Internal Environment

Resources

Rare Valuable Costly to Imitate

Nonsubstitutable

Technology ✓ ✓ ✓ ✓

Experts ✓ ✓ ✓ ✓

SWOT - Strength

Global Investment Network. Financial Industries’ Largest Proprietary Network. Innovative Products like Target Balancing and Notional Pooling. Emphasis/Compete on Customer Service rather than Price. Large Customer Base. State-of-the-Art Technology/Infrastructure. Use of Artificial Intelligence. Strong Brand. Global Reach and Local Intelligence. Build Customer Trust and Confidence For Lock in Outsourcing. Economies of Scale. Web Enabled Financial Processes. Paperless Transactions. Operational Efficiency and Cost Saving

SWOT - Weakness

Discretionary price Discrimination based on Client Volume & Value.

Operating Expenses Growth > Revenue Growth.

Leadership Crisis is one of the most important weakness of the case.

E-Business Expertise are necessary for the organization.

Web Strategies easy to Imitation/duplicated.

Varied Customer Practices Across Globe.

Current Saturated Markets.

More Instance Fraud.

Online Reputation Management.

SWOT - Opportunities

Customer as Partner: Back–Office Operations.

E-Enabled Corporate and Middle Market.

Multi-currency payment management and payment aggregation.

Information flowing with the payment.

B2B e-payment.

Parallel convergence.

Sarbanes-Oxley Corporate compliance.

Emerging Markets.

SWOT - Threats

Changing global environment is one the important risk.

Declining interest margins

Brokerage and life insurance Unacceptability

Credit crunch due to subprime mortgage crisis

Price war during slow down is also one of the major threat.

Risk of increase in competition in market.

International Strategy

International Business-Level Strategy Focused differentiation

International Corporate-Level Strategy Transnational Strategy: global efficiency and local

responsiveness

Choice of International Entry Mode

Strategic Alliances Acquisitions

New Wholly Owned

Subsidiary-- Using its partners

strength: with companies that had complementary technology, infrastructure or access to markets

- Key technology players: Oracle, Commerce One Inc., SAP AG, Wisdom Technologies, Bolero.net

- In 2004, acquired Lava Trading (a leader in electronic execution and sell side order management systems

- Greenfield approach

- Citibank began invests directly in another country or market (e.g., Penang)

Conclusion

Differentiates from their competitors, and how to transform traditional assets to digital assets

Technology changed customer expectations

Integrating products in new ways

Main goal is to provide the most cost effective , cutting edge, reliable and secure solutions

Citibank see technology as their biggest comparative advantage

Future trend

Many other bank can duplicate the same technologies

The needs of the customer are changing according to era

Crisis in Europe

Significant growth of SME

Suggestion

Focus to SME segment

Move to emerging market

Educate SME segment customers

Improve the vulnerabilities of the systems

Implement Sarbanes-Oxley Corporate compliance.

Cost efficiency (layoff employee, reduce data center)

Integrated cost leadership / differentiation

Thank You!!