Citibank's Co-Operative Strategy in China: The Renminbi Debit Card SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Citibank's Co-Operative Strategy in China: The Renminbi Debit Card
The strategy of Citibank (China) Co. Ltd ("Citi") in China has evolved as the business environment has changed. Since the start of its operations in China in 1902, the global banking giant has preferred opening offices as branches (when allowed by the government) rather than subsidiaries. In 2001, China announced that it would join the World Trade Organization and would undertake a series of measures to open up its banking sector. By this time, Citi had realized that the pace of its growth in China had been very slow. Consequently, the bank reviewed its strategy and decided to enter the market as an embedded, or genuinely local, bank. Citi's July 2008 agreement with China Unionpay ("CUP"), China's only national bankcard association, allows Citi's debit cardholders to enjoy the convenience of access to CUP's vast network in China. The agreement is the latest milestone in the bank's strategy to establish its presence in the emerging and rapidly growing China market through a series of strategic alliances. Why has CitiUnionpay changed its strategy and started entering such co-operative alliances? What are the risks and advantages associated with using such co-operative strategies?
Swot Analysis of "Citibank's Co-Operative Strategy in China: The Renminbi Debit Card" written by Stephen Ko, Havovi Joshi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that China Operative facing as an external strategic factors. Some of the topics covered in Citibank's Co-Operative Strategy in China: The Renminbi Debit Card case study are - Strategic Management Strategies, Joint ventures and Global Business.
Some of the macro environment factors that can be used to understand the Citibank's Co-Operative Strategy in China: The Renminbi Debit Card casestudy better are - – digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, increasing energy prices,
increasing transportation and logistics costs, increasing commodity prices, etc
Introduction to SWOT Analysis of Citibank's Co-Operative Strategy in China: The Renminbi Debit Card
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Citibank's Co-Operative Strategy in China: The Renminbi Debit Card case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the China Operative, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which China Operative 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 Citibank's Co-Operative Strategy in China: The Renminbi Debit Card can be done for the following purposes –
1. Strategic planning using facts provided in Citibank's Co-Operative Strategy in China: The Renminbi Debit Card case study
2. Improving business portfolio management of China Operative
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of China Operative
Strengths Citibank's Co-Operative Strategy in China: The Renminbi Debit Card | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of China Operative in Citibank's Co-Operative Strategy in China: The Renminbi Debit Card Harvard Business Review case study are -
High switching costs
– The high switching costs that China Operative 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.
Operational resilience
– The operational resilience strategy in the Citibank's Co-Operative Strategy in China: The Renminbi Debit Card Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Successful track record of launching new products
– China Operative has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. China Operative 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
– China Operative has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Citibank's Co-Operative Strategy in China: The Renminbi Debit Card 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.
Strong track record of project management
– China Operative is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– China Operative is one of the most innovative firm in sector. Manager in Citibank's Co-Operative Strategy in China: The Renminbi Debit Card Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of China Operative in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For China Operative digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. China Operative has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Cross disciplinary teams
– Horizontal connected teams at the China Operative 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.
Sustainable margins compare to other players in Global Business industry
– Citibank's Co-Operative Strategy in China: The Renminbi Debit Card firm has clearly differentiated products in the market place. This has enabled China Operative to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped China Operative to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– China Operative is one of the leading recruiters in the industry. Managers in the Citibank's Co-Operative Strategy in China: The Renminbi Debit Card are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– China Operative is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Stephen Ko, Havovi Joshi can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses Citibank's Co-Operative Strategy in China: The Renminbi Debit Card | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Citibank's Co-Operative Strategy in China: The Renminbi Debit Card are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Citibank's Co-Operative Strategy in China: The Renminbi Debit Card, it seems that the employees of China Operative don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High cash cycle compare to competitors
China Operative 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Citibank's Co-Operative Strategy in China: The Renminbi Debit Card, in the dynamic environment China Operative has struggled to respond to the nimble upstart competition. China Operative has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of China Operative supply chain. Even after few cautionary changes mentioned in the HBR case study - Citibank's Co-Operative Strategy in China: The Renminbi Debit Card, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left China Operative vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, China Operative has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. China Operative even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Workers concerns about automation
– As automation is fast increasing in the segment, China Operative 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.
Slow to strategic competitive environment developments
– As Citibank's Co-Operative Strategy in China: The Renminbi Debit Card HBR case study mentions - China Operative 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.
Aligning sales with marketing
– It come across in the case study Citibank's Co-Operative Strategy in China: The Renminbi Debit Card that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Citibank's Co-Operative Strategy in China: The Renminbi Debit Card can leverage the sales team experience to cultivate customer relationships as China Operative is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at China Operative 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Citibank's Co-Operative Strategy in China: The Renminbi Debit Card 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 China Operative has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Citibank's Co-Operative Strategy in China: The Renminbi Debit Card, is just above the industry average. China Operative needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Opportunities Citibank's Co-Operative Strategy in China: The Renminbi Debit Card | 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 Citibank's Co-Operative Strategy in China: The Renminbi Debit Card are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, China Operative is facing challenges because of the dominance of functional experts in the organization. Citibank's Co-Operative Strategy in China: The Renminbi Debit Card case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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 China Operative in the consumer business. Now China Operative can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– China Operative can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Loyalty marketing
– China Operative 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for China Operative in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at China Operative 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 Global Business segment.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, China Operative 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, Citibank's Co-Operative Strategy in China: The Renminbi Debit Card, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. China Operative can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. China Operative can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Developing new processes and practices
– China Operative can develop new processes and procedures in Global Business industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, China Operative 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.
Buying journey improvements
– China Operative can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Citibank's Co-Operative Strategy in China: The Renminbi Debit Card 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for China Operative to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for China Operative to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of China Operative has opened avenues for new revenue streams for the organization in the industry. This can help China Operative to build a more holistic ecosystem as suggested in the Citibank's Co-Operative Strategy in China: The Renminbi Debit Card case study. China Operative can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Citibank's Co-Operative Strategy in China: The Renminbi Debit Card External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Citibank's Co-Operative Strategy in China: The Renminbi Debit Card are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Citibank's Co-Operative Strategy in China: The Renminbi Debit Card, China Operative may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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. China Operative needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– China Operative 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.
Regulatory challenges
– China Operative needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Global Business industry regulations.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. China Operative will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, China Operative 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 Citibank's Co-Operative Strategy in China: The Renminbi Debit Card .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Environmental challenges
– China Operative 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. China Operative can take advantage of this fund but it will also bring new competitors in the Global Business industry.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for China Operative in the Global Business sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents China Operative with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 China Operative.
Technology acceleration in Forth Industrial Revolution
– China Operative has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, China Operative needs to keep up with the evolution of technology in the Global Business 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.
Increasing wage structure of China Operative
– 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 China Operative.
Weighted SWOT Analysis of Citibank's Co-Operative Strategy in China: The Renminbi Debit Card 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 Citibank's Co-Operative Strategy in China: The Renminbi Debit Card 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 Citibank's Co-Operative Strategy in China: The Renminbi Debit Card 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 Citibank's Co-Operative Strategy in China: The Renminbi Debit Card 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 Citibank's Co-Operative Strategy in China: The Renminbi Debit Card 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 China Operative needs to make to build a sustainable competitive advantage.
