Citigroup: Global and Domestic Environmental Factors

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CitiGroup: Global and Domestic Environmental Factors
University of Phoenix
MKT 421 Marketing
Professor Smith
March 1, 2009

Global and Domestic Environmental Factors
Like any global organization doing business today; CitiGroup is feeling the pressure of an increasingly difficult business climate. Economic environmental factors caused by the mortgage crisis have taken their toll on Citi, both domestically and abroad. A January 2008 Fortune Magazine article interviewing Robert Rubin, CitiGroup’s director and executive chair committee member offered some insight into the views of Citi’s Sr. management team. Rubin’s Forecast of Environmental Factors

Had an investor listened to Rubin in January of 2008 he or she may have thought the then current financial crisis was nothing more than a cyclical pattern with markets correcting themselves. Little did the former U.S. Secretary of Treasury know; the declining market conditions of January 2008 were just the tip of the iceberg. Based on Rubin’s views; at the time, Citi executives were not particularly alarmed and were still viewing the recent economic meltdown as business as usual. The organization’s management team was not concerned with the “cyclical” market and made decisions to continue marketing the company in the same fashion they had in the decades prior. The organization pressed on with an order for a 50 million dollar private jet and applauded the 2006 agreement to purchase the naming rights of the New York Mets Stadium, Citi Field, at a cost of 400 million dollars. Rubin’s main concern was how the organization could resolve the wealth gap between countries; in his opinion the most serious deterrent to growth. "It's a paramount task for policy makers to understand why market economy and globalization are associated with severe income distribution issues in almost every country; and then they must create policy to address the problem." (Benner, 2008) For Citi to maximize market potentials the organization must find ways to market to all segments regardless of the wealth gaps. Determining which products will provide growth opportunities with minimum risk factors may be a daunting task for even the world’s largest financial organization. Technological Changes Effect on Marketing Decisions

According to Rubin, technological advances of other countries have put the U.S. in a precarious position. Rubin was stumped when asked where the U.S. fit into a world where China has become the global factory, Brazil the world's farmer, and India its back office. "We can do all of these things, but we have to invest in what we have to invest in, which is education," he said. But his answer was uneasy. After all, globalization has made the U.S. the world's manager and financier, a job that his bank has just screwed up on a massive scale (Benner, 2008). Finding ways to market Citi’s ability to manage the world’s finances after the company has demonstrated on a global platform their inability to do so will require a marketing genius. Citi will need to reinvent how the organization does business. Due to Citi’s near failure and the failures of other large corporation’s such as Bear Stearns and Merrill Lynch; the old business model of being the biggest is no longer viable in a market where big correlates to poor management. Citi must find new ways to market items such as service and dependability; something the organization has not demonstrated under the current regime. Perceived Views on the Importance of Social Responsibility

The author, Katie Benner, opinions are apparent in her terminology throughout the article. Stating Rubin’s company has “screwed up on a massive scale” could be considered fighting words in most cultures. Benner’s view of Rubin and Citi’s actions paint a picture of an outright lack of acceptance or responsibility on Citi’s part for the global...
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