E-Business Transformation in the Banking Industry: The Case of Citibank SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of E-Business Transformation in the Banking Industry: The Case of Citibank
Citibank reshaped considerably its e-business program after the financial crisis of 2008 focusing on leveraging its geographical reach, rolling out global initiatives to maintain its leadership in treasury and trade services, and becoming even more customer-centric. Citi restructured its R&D centers and its marketing strategy to assist customers in finding solutions rather than selling products. Citi's execution was fast-paced, but the landscape for treasury and trade services was changing rapidly after the financial crisis. Multi-banking became a must and a new solution marketed by SWIFT allowed to multi-bank on the internet at low cost and with greater efficiency than previous solutions. While adoption was slow, the change in the competitive landscape was significant. The data of any bank could now be seen and manipulated through the internet portal of any other bank. Internet portals continued to evolve offering new features and functionalities at product level: Citi updated its CitiDirect BE and TreasuryVision platforms to offer what the market asked for. But seamless bank-corporate integration at technology level was not evolving at the same pace. Corporation and bank data exchanges were inefficient, making a number of treasury tasks labor-intensive. Corporations came to prefer multi-banking platforms after the financial crisis, and were demanding automated integration of bank data into their ERPs. An e-business transformation was on the way. Internet banking portals became multi-banking portals, as did proprietary bank-corporate EDI links like CitiConnect. But it was cloud computing that promised the definitive technological solution for the bank-corporate integration model. The ERP vendor SAP was the first to experiment with a private cloud model and allow direct straight-through processing of each financial transaction sent from the ERP directly to bank middleware. Citi was the first bank to sign up with the project, but its competitors followed. Digitalization of bank services was reaching the next level, and this promised to have significant impact on the banking business model.
Swot Analysis of "E-Business Transformation in the Banking Industry: The Case of Citibank" written by Ali Farhoomand, Davide Lentini includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bank Banking facing as an external strategic factors. Some of the topics covered in E-Business Transformation in the Banking Industry: The Case of Citibank case study are - Strategic Management Strategies, Technology and Technology & Operations.
Some of the macro environment factors that can be used to understand the E-Business Transformation in the Banking Industry: The Case of Citibank casestudy better are - – there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, central banks are concerned over increasing inflation, there is backlash against globalization, supply chains are disrupted by pandemic ,
increasing energy prices, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of E-Business Transformation in the Banking Industry: The Case of Citibank
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in E-Business Transformation in the Banking Industry: The Case of Citibank case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bank Banking, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bank Banking operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of E-Business Transformation in the Banking Industry: The Case of Citibank can be done for the following purposes –
1. Strategic planning using facts provided in E-Business Transformation in the Banking Industry: The Case of Citibank case study
2. Improving business portfolio management of Bank Banking
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bank Banking
Strengths E-Business Transformation in the Banking Industry: The Case of Citibank | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bank Banking in E-Business Transformation in the Banking Industry: The Case of Citibank Harvard Business Review case study are -
Innovation driven organization
– Bank Banking is one of the most innovative firm in sector. Manager in E-Business Transformation in the Banking Industry: The Case of Citibank Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Bank Banking are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
High switching costs
– The high switching costs that Bank Banking has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Highly skilled collaborators
– Bank Banking has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in E-Business Transformation in the Banking Industry: The Case of Citibank HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Bank Banking
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bank Banking does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Bank Banking has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bank Banking has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Training and development
– Bank Banking has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in E-Business Transformation in the Banking Industry: The Case of Citibank Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Low bargaining power of suppliers
– Suppliers of Bank Banking in the sector have low bargaining power. E-Business Transformation in the Banking Industry: The Case of Citibank has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bank Banking to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Bank Banking is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Bank Banking is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in E-Business Transformation in the Banking Industry: The Case of Citibank Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Bank Banking is one of the leading recruiters in the industry. Managers in the E-Business Transformation in the Banking Industry: The Case of Citibank are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Technology & Operations industry
– E-Business Transformation in the Banking Industry: The Case of Citibank firm has clearly differentiated products in the market place. This has enabled Bank Banking to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Bank Banking to invest into research and development (R&D) and innovation.
Ability to lead change in Technology & Operations field
– Bank Banking is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Bank Banking in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses E-Business Transformation in the Banking Industry: The Case of Citibank | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of E-Business Transformation in the Banking Industry: The Case of Citibank are -
No frontier risks strategy
– After analyzing the HBR case study E-Business Transformation in the Banking Industry: The Case of Citibank, it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High bargaining power of channel partners
– Because of the regulatory requirements, Ali Farhoomand, Davide Lentini suggests that, Bank Banking is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow to strategic competitive environment developments
– As E-Business Transformation in the Banking Industry: The Case of Citibank HBR case study mentions - Bank Banking takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Increasing silos among functional specialists
– The organizational structure of Bank Banking is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Bank Banking needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bank Banking to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Bank Banking has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Bank Banking needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High cash cycle compare to competitors
Bank Banking has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High operating costs
– Compare to the competitors, firm in the HBR case study E-Business Transformation in the Banking Industry: The Case of Citibank has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Bank Banking 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Bank Banking, firm in the HBR case study E-Business Transformation in the Banking Industry: The Case of Citibank needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the E-Business Transformation in the Banking Industry: The Case of Citibank HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Bank Banking has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study E-Business Transformation in the Banking Industry: The Case of Citibank, in the dynamic environment Bank Banking has struggled to respond to the nimble upstart competition. Bank Banking has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities E-Business Transformation in the Banking Industry: The Case of Citibank | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study E-Business Transformation in the Banking Industry: The Case of Citibank are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bank Banking can use these opportunities to build new business models that can help the communities that Bank Banking operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Using analytics as competitive advantage
– Bank Banking has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study E-Business Transformation in the Banking Industry: The Case of Citibank - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bank Banking to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Bank Banking can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Creating value in data economy
– The success of analytics program of Bank Banking has opened avenues for new revenue streams for the organization in the industry. This can help Bank Banking to build a more holistic ecosystem as suggested in the E-Business Transformation in the Banking Industry: The Case of Citibank case study. Bank Banking can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Bank Banking can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bank Banking can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Bank Banking can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. E-Business Transformation in the Banking Industry: The Case of Citibank suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Bank Banking in the consumer business. Now Bank Banking can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bank Banking can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Loyalty marketing
– Bank Banking has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Bank Banking to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Bank Banking can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bank Banking can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, E-Business Transformation in the Banking Industry: The Case of Citibank, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats E-Business Transformation in the Banking Industry: The Case of Citibank External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study E-Business Transformation in the Banking Industry: The Case of Citibank are -
Increasing wage structure of Bank Banking
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Bank Banking.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Bank Banking can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Bank Banking is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Bank Banking needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Environmental challenges
– Bank Banking needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Bank Banking can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study E-Business Transformation in the Banking Industry: The Case of Citibank, Bank Banking may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Technology acceleration in Forth Industrial Revolution
– Bank Banking has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Bank Banking needs to keep up with the evolution of technology in the Technology & Operations sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High dependence on third party suppliers
– Bank Banking high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bank Banking can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study E-Business Transformation in the Banking Industry: The Case of Citibank .
Stagnating economy with rate increase
– Bank Banking can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Bank Banking.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bank Banking with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of E-Business Transformation in the Banking Industry: The Case of Citibank Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study E-Business Transformation in the Banking Industry: The Case of Citibank needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study E-Business Transformation in the Banking Industry: The Case of Citibank is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study E-Business Transformation in the Banking Industry: The Case of Citibank is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of E-Business Transformation in the Banking Industry: The Case of Citibank is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Bank Banking needs to make to build a sustainable competitive advantage.
