Peer Critique of Case Analysis Assignment: Citigroup Inc

Introduction

Citigroup Inc. was founded in 1812 by Samuel Osgood in New York City. To this day, the organization’s headquarters remain in its initial foundation however, the company has grown from its humble beginnings of a mere 2 million dollars in assets to a market capitalization of 162 billion dollars as of 2014. (David & David, 2017). Operating in more than 160 countries with over 900 million retail accounts and more than 250,000 employees in total, Citigroup is currently known as the “world’s largest credit card issuer and largest banking enterprise” (David & David, 2017). However, Citigroup has faced significant issues in terms of how it has been perceived by the US government, specifically regarding the bailouts and ethical issues surrounding the implications of Citigroup’s actions on the overall worldwide economy.

Mission Statement

Citigroup’s current mission statement has been defined as follows, “Citi works tirelessly to serve individual, communities, institutions and nations. With 200 years of experience meeting the world’s toughest challenges and seizing its greatest opportunities, we strive to create the best outcomes for our clients and customers with financial solutions that are simple, creative and responsible. An institution connecting over 1,000 cities, 160 countries and millions of people, we are your global bank, we are Citi” (David & David, 2017). Overall, this mission statement seems to be very detailed and effectively structured, as it outlines the reach of the organization as well as their accumulated experience and the sheer scale, number of employees and customers. However, perhaps what is missing from this statement is the concept of the causes that Citi cares about and what they are dedicated to/how they define themselves. New Mission Statement

The new mission statement has been developed as per the textbook format (David & David, 2017). Citigroup serves a global (3) customer base, in over 160 countries (1). We provide “global banking, advisory services, derivative services, brokerage, mortgages and auto loans” (2) (David & David, 2017). Citigroup employs over 250,000 people and continuously invest in their career development and ensure that they provide the best services to our customers (9), representing values of professionalism and care (7)(6). At Citigroup, we are constantly innovating, leveraging technology (4) and striving (5)(6) to “create the best outcomes for our clients with financial solutions that are simple, creative and responsible” (David & David, 2017) (8).

Vision Statement

Currently, Citigroup does not have a defined vision statement (David & David, 2017).

New Vision Statement

Citigroup’s vision is to leverage our 200 years of experience to create and develop industry-leading, revolutionary and innovative financial solutions for our clients around the world.

SWOT Analysis

Strengths

Perhaps Citigroup’s most prominent strength is their sheer scale and size. The number of clients and revenues they bring in provides them with significant leveraging power, thus empowering the organization to achieve its objectives and pursue its various goals. The organization is truly can be found in over 1000 cities and 160 countries (David & David, 2017). It is currently known as an industry leader, as the “world’s largest credit card issuer” and the “largest banking enterprise in the world” (David & David, 2017). In addition, the revenues for the firm increased by 2 percent in 2015, in comparison to 17.8 billion as of the last year (David & David, 2017). Thus, in terms of scale, Citigroup has clear strengths and significant competitive advantages. Another strength that Citigroup has is its historical importance and value to the citizens of New York. As it was founded in 1812 by one of the founding fathers of the United States and the fact that the bank played instrumental roles in the development and advancement of America/New York over the years, it is clear that the organization holds a special place within the community and is recognized for its 200-year longevity (David & David, 2017). In addition, in terms of strategic planning and organization, Citigroup has been able to effectively allocate its resources across its various departments/global locations, while developing key effective strategies to turn non-profitable business ventures into successful ones. Some prime examples of these turnarounds are Citi Holdings and OneMain Financial which were initially resulting in major losses however through cutting costs and the divesting strategy, Citigroup was successful in ensuring profitability (David & David, 2017). Lastly, in terms of the organization structure of the firm, it also seems to be effectively managed as each department has been well-defined, and each CEO has been given a certain level of autonomy and control over their department, while also being provided direct support from the general CEO of the Citigroup. Thus, this eliminates a certain level of red tape and allows things to get done efficiently and effectively within each department. Weaknesses

In terms of weaknesses, it is clear that Citigroup has had to deal with a lot of issues surrounding ethics, which definitely impact their brand image and how they are perceived by the public/future potential clients. With the bailout from the government of “half a trillion dollars”, this was perceived as Citigroup simply stealing taxpayer money and utilizing their connections in congress for their benefit (David & David, 2017). With these factors being brought up by senators, it is clear that Citigroup does not have a good reputation with some of the members of the senate, but also the general public as these facts clearly portray an image of a firm that does not display the highest values of ethical judgement (David & David, 2017). From investigations in “manipulation of a key interest rate, anti-money laundering, falsified invoices, failing stress tests and fraud in oil services”, it is clear that Citigroup has been significantly neglecting their ethical responsibilities and thus, failing to implement proper ethical practices within the firm (David & David, 2017). These investigations and allegations have not only caused the organization to incur billions of dollars in charges, thus resulting in significant financial losses but also can result in a negative perceived public image and perhaps even drive away shareholders/investors and existing/potential clients.

Opportunities

There are many opportunities that Citigroup can seize in the market today. Firstly, online banking is becoming more and more of a trend and is a growing market space. Due to its relatively new market space, this should not be perceived as a threat bust as and opportunity since Citibank has not only the funds and scale, but also the existing client base and human capital/talent to develop a strategy to enter and dominate this particular market (David & David, 2017). Another opportunity is more global expansion and into markets that are growing and have potential. Threats

There are many significant competitors in the same industry as Citigroup, and they also have similar competitive advantages as well as client bases that can be leveraged for their benefit. The main rivals have been defined as J.P. Morgan and Bank of America (David & David, 2017). As the case study notes “Citigroup trails both J.P. Morgan and Bank of America on every statistic presenting, except total number of employees, with all three banks roughly equal on employment numbers” (David & David, 2017). This is a highly concerning factor as Citigroup not only needs to improve these statistics (revenue, net income, revenue/employee, EPS ratio, Market Capitalization) through growth mechanisms or investments, but they also need to define a sustainable competitive advantage, that makes them stand out from their competitors in the long run (David & David, 2017). In addition, it is also important to learn from competitors as well. J.P. Morgan also suffered issues with the subprime mortgage lending crisis and is currently doing damage control by paying aid to consumers, while also helping out low-income homeowners (David & David, 2017). Another issue the organization faced was in terms of a data breach, which was immediately dealt with by allocating significant funds to the security measures in the future (David & David, 2017). Thus, it is clear that damage control and mitigating risks is something that Citigroup can learn from its competitors, and perhaps apply to its own ethical issues as well. This shows the public that they acknowledge their mistakes and are willing to improve and make a difference. In addition, the data breach issue is also a threat to all banks and thus, Citigroup should also consider implementing protective measures in order to avoid these risks and consequences (David & David, 2017). The threat of technology also applies to the credit card industry, as increasing methods of mobile payments and the concept of “bypassing banks” has become increasingly popular by corporations like Apple and Google (David & David, 2017). This poses a huge threat to banks like Citigroup, and thus they need to take action in terms of their credit card fees and also deal with the threat of mobile payments in order to ensure that their credit card business does not go into decline.

BCG Matrix

Stars · Commercial Banking · Credit Card Industry	Question Marks · Citi Holdings
Cash Cows · Global Consumer Banking	Dogs · One Main Financial

SPACE Matrix

	FP
CP	IP SP

The SPACE Matrix for this firm is a conservative profile because it is a “firm that has achieved financial strength in a stable industry that is not growing, the firm has a few competitive advantages” (David & David, 2017). This applies directly to Citigroup simply because they have achieved market domination, the industry is stable but the firm does not stand out as much in comparison to its competitors such as J.P. Morgan and Bank of America as discussed prior in the “Threats” section of the report.

Recommendations/Conclusion

Overall, it is clear that Citigroup is in a fast-paced and dynamic industry. With its level of revenues and assets, it is clear that the organization has the resources to pursue strategies in order to ensure market domination. Dealing with the incoming threats such as the credit card industry, online banking as well as damage control for their public image in terms of ethics has been discussed throughout this paper. However, another recommendation is for the organization to consider defining itself by a firm that also gives back, this was something evident in the beginning years of the corporation but has seemed to be lost during these years. Writing the vision and mission statement was difficult in this regard as Citigroup does not seem to have significant causes/a defined, core higher purpose they are dedicated to in terms of giving back to their customer base. This not only will help in terms of their public image and perceived customer value, but it will also assist the firm in defining themselves from their fierce competitors and create a strong corporate identity as well.

References

David, F. R., & David, F. R. (2017). Strategic management: Concepts and cases ; a competitive advantage approach.