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 - – increasing government debt because of Covid-19 spendings, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China,
customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, 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 -
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.
Effective Research and Development (R&D)
– China Operative has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Citibank's Co-Operative Strategy in China: The Renminbi Debit Card - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– China Operative has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled China Operative to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– China Operative 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 Citibank's Co-Operative Strategy in China: The Renminbi Debit Card HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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.
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.
Low bargaining power of suppliers
– Suppliers of China Operative in the sector have low bargaining power. Citibank's Co-Operative Strategy in China: The Renminbi Debit Card has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps China Operative to manage not only supply disruptions but also source products at highly competitive prices.
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.
Diverse revenue streams
– China Operative is present in almost all the verticals within the industry. This has provided firm in Citibank's Co-Operative Strategy in China: The Renminbi Debit Card 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.
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.
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 -
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Stephen Ko, Havovi Joshi suggests that, China Operative 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, China Operative is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Citibank's Co-Operative Strategy in China: The Renminbi Debit Card can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
Increasing silos among functional specialists
– The organizational structure of China Operative is dominated by functional specialists. It is not different from other players in the Global Business segment. China Operative needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help China Operative to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of China Operative products
– To increase the profitability and margins on the products, China Operative needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Citibank's Co-Operative Strategy in China: The Renminbi Debit Card 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 China Operative 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, China Operative has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Need for greater diversity
– China Operative has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
No frontier risks strategy
– After analyzing the HBR case study Citibank's Co-Operative Strategy in China: The Renminbi Debit Card, 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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects China Operative can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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. China Operative can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help China Operative to increase its market reach. China Operative 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.
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.
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.
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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. China Operative can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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 -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for China Operative in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
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 .
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.
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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. China Operative can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of China Operative business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 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.
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.
Shortening product life cycle
– it is one of the major threat that China Operative is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.