Citigroup in Post-WTO China (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Citigroup in Post-WTO China (A)
China's entry into the World Trade Organization (WTO) at the end of 2001 brought promises that foreign financial institutions would be permitted to operate throughout China. In 1998, Citicorp and Travelers Group Inc. had merged to create the new Citigroup Inc. Travelers brought a vast array of financial services that added to Citibank's existing portfolio of consumer and commercial lending. Travelers had developed extensive businesses in investment banking, asset management, life insurance, and property/casualty insurance, as well as consumer lending. Citigroup now had to determine the business prospects for each of its activities in the growing China market. Fears of social and economic dislocation might lead China to impose regulatory restrictions limiting the pace of foreign expansion. Economic growth might be impeded by the existing political structure, and reforms might not occur in the near term. A myriad of other challenges included human resources difficulties, e-commerce limitations, and regional disparities. The pace of privatization of state-owned enterprises and the societal preferences in regard to alternative insurance and investment products added to the uncertainties. Citibank had a record of success in less developed countries, and had developed certain competitive advantages that might be the basis for success in China, but whether and how these could be extended to other Citigroup financial activities remained an important question.
Swot Analysis of "Citigroup in Post-WTO China (A)" written by David W. Conklin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Citigroup Travelers facing as an external strategic factors. Some of the topics covered in Citigroup in Post-WTO China (A) case study are - Strategic Management Strategies, and Global Business.
Some of the macro environment factors that can be used to understand the Citigroup in Post-WTO China (A) casestudy better are - – challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, technology disruption, increasing energy prices,
wage bills are increasing, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Citigroup in Post-WTO China (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Citigroup in Post-WTO China (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Citigroup Travelers, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Citigroup Travelers 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 Citigroup in Post-WTO China (A) can be done for the following purposes –
1. Strategic planning using facts provided in Citigroup in Post-WTO China (A) case study
2. Improving business portfolio management of Citigroup Travelers
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 Citigroup Travelers
Strengths Citigroup in Post-WTO China (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Citigroup Travelers in Citigroup in Post-WTO China (A) Harvard Business Review case study are -
Ability to recruit top talent
– Citigroup Travelers is one of the leading recruiters in the industry. Managers in the Citigroup in Post-WTO China (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Citigroup Travelers is one of the most innovative firm in sector. Manager in Citigroup in Post-WTO China (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Global Business industry
– Citigroup in Post-WTO China (A) firm has clearly differentiated products in the market place. This has enabled Citigroup Travelers to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Citigroup Travelers to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Citigroup Travelers 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.
Operational resilience
– The operational resilience strategy in the Citigroup in Post-WTO China (A) 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.
Analytics focus
– Citigroup Travelers 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 David W. Conklin 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.
Highly skilled collaborators
– Citigroup Travelers 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 Citigroup in Post-WTO China (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Citigroup Travelers in the sector have low bargaining power. Citigroup in Post-WTO China (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Citigroup Travelers to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Citigroup Travelers is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Global Business field
– Citigroup Travelers 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 Citigroup Travelers in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Citigroup Travelers is present in almost all the verticals within the industry. This has provided firm in Citigroup in Post-WTO China (A) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High switching costs
– The high switching costs that Citigroup Travelers 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.
Weaknesses Citigroup in Post-WTO China (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Citigroup in Post-WTO China (A) are -
Interest costs
– Compare to the competition, Citigroup Travelers has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
No frontier risks strategy
– After analyzing the HBR case study Citigroup in Post-WTO China (A), it seems that company is thinking about the frontier risks that can impact Global Business 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.
Lack of clear differentiation of Citigroup Travelers products
– To increase the profitability and margins on the products, Citigroup Travelers needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Citigroup in Post-WTO China (A), is just above the industry average. Citigroup Travelers 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.
Products dominated business model
– Even though Citigroup Travelers has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Citigroup in Post-WTO China (A) should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Citigroup Travelers 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 Citigroup in Post-WTO China (A) 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 Citigroup Travelers has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Citigroup in Post-WTO China (A), it seems that the employees of Citigroup Travelers 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Citigroup in Post-WTO China (A), in the dynamic environment Citigroup Travelers has struggled to respond to the nimble upstart competition. Citigroup Travelers 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 Citigroup Travelers supply chain. Even after few cautionary changes mentioned in the HBR case study - Citigroup in Post-WTO China (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Citigroup Travelers vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Citigroup Travelers, firm in the HBR case study Citigroup in Post-WTO China (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Citigroup in Post-WTO China (A) | 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 Citigroup in Post-WTO China (A) are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Citigroup Travelers 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.
Better consumer reach
– The expansion of the 5G network will help Citigroup Travelers to increase its market reach. Citigroup Travelers will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Citigroup Travelers can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Citigroup Travelers is facing challenges because of the dominance of functional experts in the organization. Citigroup in Post-WTO China (A) 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.
Building a culture of innovation
– managers at Citigroup Travelers 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, Citigroup Travelers 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, Citigroup in Post-WTO China (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Citigroup Travelers 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.
Developing new processes and practices
– Citigroup Travelers 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Citigroup Travelers can use these opportunities to build new business models that can help the communities that Citigroup Travelers operates in. Secondly it can use opportunities from government spending in Global Business sector.
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. Citigroup Travelers 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. Citigroup Travelers 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.
Learning at scale
– Online learning technologies has now opened space for Citigroup Travelers to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Loyalty marketing
– Citigroup Travelers 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Citigroup Travelers can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Citigroup in Post-WTO China (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Citigroup in Post-WTO China (A) are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Citigroup Travelers with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Citigroup Travelers 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. Citigroup Travelers can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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. Citigroup Travelers 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.
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.
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. Citigroup Travelers needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Citigroup Travelers 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.
Shortening product life cycle
– it is one of the major threat that Citigroup Travelers is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Technology acceleration in Forth Industrial Revolution
– Citigroup Travelers has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Citigroup Travelers 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 Citigroup Travelers
– 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 Citigroup Travelers.
Stagnating economy with rate increase
– Citigroup Travelers 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.
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 Citigroup Travelers.
Regulatory challenges
– Citigroup Travelers 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.
Weighted SWOT Analysis of Citigroup in Post-WTO China (A) 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 Citigroup in Post-WTO China (A) 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 Citigroup in Post-WTO China (A) 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 Citigroup in Post-WTO China (A) 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 Citigroup in Post-WTO China (A) 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 Citigroup Travelers needs to make to build a sustainable competitive advantage.
