Perform a STEEP analysis to understand the general environment facing Citibank. How will Citibank be affected by external factors? In particular what is the affect of the internet on the banking industry and Citibank?
Social & Demographic:
- Commercial cards enabled customers to receive consolidated spend data for all countries within Asia.
- Clients can benefit from in consistency in products, delivery, and services.
- Only balanced card issuers are able to deliver local-currency and local-language
programs to clients worldwide by using its own proprietary systems and customer service
- New technology required major investments in people, risk, and technological services that some banks were not ready to make or had the assets to make happen.
-Citibank invested millions of dollars in the infrastructure required to move and monitor
cash balances online.
- Main focus or goal is to provide corporate customers the most cost effective, cutting-
edge, reliable, and secure solutions in technology innovations.
- Technology was used as a means to achieve strategic objective for Citibank, with
intentions to lower costs and improve efficiency in its investments in IT provided better
- Citibank offers outsourcing services to corporate customers, secures all business
transactions from customer, and attempt to gain a loyal relationship.
- A large consumer base will provide Citibank with economies of scale (low unit costs). d.
Environmental & Geographic:
- Citibank is uniquely positioned to service its customer’s global needs and secure in its
expertise, resulting in setting Citibank’s separation from competitors.
- Citibank implements the “embedded bank” strategy in emerging markets (build broad
customer base, diverse products, community involvement, and recruitments from local
population). - In geographic regions outside of the US, Citibank recruits staff and senior management from the local population. e.
Political, Legal & Government:
- Regulators took cross-platform view of risk, expecting banks to increase connect
exposures across channels and payments (pressure on bank architectures where risk
management buried at the platform level).
- Privacy Issues: Bank expected to able to identify specific breaches to limit fraudulent
damage (third-party arrangements scrutinized were closely to ensure prevention of
The external factors that affected Citibank include adapting to the various preferences of consumers, changes in technology, and competing with competitors fearing imitation. Citibank needs to create a distinctive strategic direction that would create a competitive advantage over competitors that can’t be easily replicated. Citibank also needs to make transformations on a global scale to deliver its e-business strategy, and create a culture that embraces e-banking.
Use Porter’s Five Forces Model to analyze the global online corporate banking industry. Given this analysis, is the industry attractive or unattractive?
Threats of New Entrants:
Generally smart organizations usually pick up from the unsuccessful implementations of another organization. Threats of new entrants occur when consumer demands are not met by a specific organization, and functional components conflict. Also, the threat of new entrants, become a concern when corporations don’t allocate the resources to increase its technology, while the competition does. Banks were compelled to identify what companies were looking for and to keep up with the customers with whom they were supposed to develop consultative relationships. Like most other businesses, banks need to increase their profit margins and this has a direct link with keeping its consumer satisfied. Also, the banking trend toward consolidation meant that fewer banks were competing in the global transaction services marketplace. b.)
Bargaining Power of...
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