Citigroup is the holding company of the following segment such as city group global markets, capital market origination, corporate and investment banking, market and securities services. Citi private bank and treasury and trade solutions, Citicorp and retailing banking, Citi Branded Cards and CitiMortgage (Maiorescu-Murphy and Maiorescu-Murphy 2020). The current plan of the company is to expand the target market and bring different financial support to the company through positive and negative investments. In this context, the company also encounter challenges in terms of high-profile challenges, biases in audits and other market manipulation in foreign bond markets (Garimella, Chiticariu and Li 2021). Hence, company require strong strategy to improve marketing segment and expand financial segment.
Industry Structure and economic feature:
Commercial banks can be broadly divided into public sector, private sector, foreign banks and RRBs. In Public Sector Banks the majority stake is held by the government. After the recent amalgamation of smaller banks with larger banks, there are 12 public sector banks in United states as of now. In this context, Citigroup Inc. is part of public sector as well as foreign bank as it works with different financial groups and others banking sectors (Wilshusen 2022). The company has unique economic features. For example, as a key component of the financial system, banks allocate funds from savers to borrowers in an efficient manner. The company has a segment that will make 52% of bill and developed revenue from the share markets.
CitigroupStrategic
i) Business Level Strategies:
Citigroup diverse targeting strategies to provide customers with the best-suited services. These services are offered to the specific target groups such as low-income earners, single women, startups high-income earners, recent alumni, wage earners, and businessmen. In this case, company has altered the corporate strategy to bring the revenue (Broby 2021).
ii) Corporate Level Strategies:
The corporate level of strategy is unique compared to business level of strategy. They provide specialized financial services, which reduce the investment rates with high level of interest. On the other hand, they have digital record for obtaining information about both savings and borrowing opportunities (Maiorescu-Murphy and Maiorescu-Murphy 2020). The company offers high interest to the older adults in order to bring high revenue with small period of time.
Competitive Analysis and Advantage in the industry:
Citibank have strong brand recognition within the United State, but their brand name is known globally as well. The company had presence in more than 160 countries with a consumer base of 2000 million. Its portfolio of offerings comprises retail, commercial, and investment banking; securities brokerage unlike other banking companies (Singh and Srivastava 2020). In this context, the common competitors who can prevent the expansion and growth are U.S. Bancorp, The PNC Financial Services Group , Truist Financial, Mizuho Financial Group, Wells Fargo & Company American Tower, and Cigna. The company require to identify appropriate strategies for altering threats and engaging consumers who can only prefer this bank. A huge number of investments through well-known stakeholders can improve the company (Thakor 2020).
SWOT Analysis
Strengths ii) Weaknesses iii) Opportunities iv) Threats
| Strength· One of the leading investment banking and microfinancing· The company offers an array of services to the stakeholders in United states unlike others(Singh and Srivastava 2020).· Successful track record of integrating complimentary firms through mergers & acquisition. |
Weakness· The company currently require tremendous expenditure in order to provide service to the consumers· High competition with other microfinancing institution due to high investment rate can be a potential weakness (Maiorescu-Murphy and Maiorescu-Murphy 2020). |
| Opportunities· Expand its horizon by acquisition and joint ventures in international markets.· Organization structure is only compatible with present business |
Threats· Regulatory changes by federal, state and local government· streaming contents and YouTube regarding scandals and poor legal issues may affect the company. (Broby 2021) |
PESTLE Analysis
| Political factors |
The political instability is currently affecting the business because this company has different micro financial segments and able to operate in different states (Maiorescu-Murphy and Maiorescu-Murphy 2020). Hence, while this investment banking has to operate in different countries and states, they must bound by government policies which can affect the investment and financing policies (Kalogiannidi and Kontsas 2021). |
| Economic factors |
A well-developed infrastructure facilitates the business environment and increases the growth potential of the gold industry. In this case, the company has no gold segment which can bring revenue fast as gold loans are highly common. Financial planning is not done properly and efficiently (Singh and Srivastava 2020). The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present ( using gold only). |
| Social factors |
The company has very high competition in the market. The company is considered as an example of competitive firm as it engages clients through brand awareness. However, mutual funds currently affected the social business. |
| Legal markets |
Citibank has been in trouble with regulators, and was fined $400 million by the Federal Reserve and the Office of the Comptroller of the Currency in 2021 (alogiannidis and Kontsas 2021). |
| Technological factors |
The company use advertisements and social media in order to bring revenue However, the company lacks the technological investments to deliver positive business outcomes through enhanced users and excellent marketing strategy for investments (Okediji 2013). |
| Environmental factors |
In order to improve sustainability, reusable products are fundamental for company to label up. In this case, since it is a banking sector , Waste management in Financial sector can influence current workflow and identity in the community (Okediji 2013). |
Target Market Analysis:
Demographic Characteristics of Market:
The demographic characteristics are crucial to identify the target market of the company. In this context, the demographic characteristics of market are range of accounts and deposit services, debit and credit cards, loans and mortgages, small business banking solutions, treasury and trade services, and corporate and institutional lending(Okediji 2013). Hence, company used different strategies to establish their own identity in each target market.
Demographic Characteristics of Market:
Citi has a global network of financial services that stretches across nearly 160 countries. Citibank's target segments include low-income earners, high-income earners, recent graduates, wage earners, and businessmen.
Psychological Characteristics of the Market:
The Psychology of financial consumer behavior provides insight into the thought processes of consumers in a variety of financial topic. The psychological characteristics of the market is highly dependent on the financial interest and investments (Okediji 2013). In this case, consumers are more inclined towards investing in the bank that can provide them with high interest. The consumers are looking for investments and saving that can support their livelihood for long period of time.
Behaviors of the Target Market:
As discussed above, consumers are looking for investments and saving to sustain long term and hence, company reputation also matter to them. In this case, strong global presence and high portfolio enable the company to bring more consumers and invest in this company compared to others.
Strategies Appealing to Market:
- Instant micro investments and mutual funds
- Increasing customer loyalty.
- Extending retention (Kalogiannidi and Kontsas2021)..
- Cross-promoting services and products.
All of these strategies are implemented by other banking companies but may not be as highly effective as this banking group.
Marketing Mix:
Product Strategy (Product Mix):
This bank is a global bank, have a range of products like investments, insurance and loans. For example,
- Personal banking such as Citi-gold private client, Citi priority, Citi banking account
- Corporate banking such as cash management, trade solution, loans, markets and credit cards are provided by bank (Singh and Srivastava 2020).
- Investment banking which mostly focused on account, deposits, mutual funds.
- Wealth management and global banking
Pricing Strategy:
They have
flexible pricing policies based on competition or market conditions or the growing economy. The interest rate is decided by banking authorities and often provide high interest when amount is high.
Promotional/ Advertising Plan:
Billboards, television, internet and newspapers are the common promotional strategies used by the company to promote the company. They also provide special credit card and debit card offers for Citibank account holders as a promotion (de Fontenay 2021). They are major sponsors for sports events and team.
Citigroup Competitive Analysis
4Ps’ comparisons with competitors:
They have high competitor in pricing and promotion. Pricing decisions significantly impacted the company (Hubbard 2020).
Product:
This company offers insurance compared to other companies.
Price:
Their interest rate mostly depends on the decision makers of the bank and hence, it reduce their competitive advantage.
Place:
Citibank have a network in nearly 36 countries with over 4000 branches and growing.
Promotion:
Citigroup inc. have started providing cashback benefits when you apply online with your Citi credit card (Singh and Srivastava 2020).
Strengths’ comparisons with competitors:
The customer base is spread across 140 countries and more than 200 million customers have taken the services of Citibank.
Weaknesses’ comparison with competitors:
The weakness is that they have low consumer engagement for gold loan and have limited alternative strategy for expanding business. However, they still lack in promotion in some countries.
Organization’s Competitive Advantage:
Strong brand recognition is that competitive advantage and they are earning high revenues in most countries.
Key success factors:
The key success factors are following:
- They have strong corporate social responsibility
- World's largest credit card issuer.
- Have a social media presence on several platforms
Problems and Issues in citigroup:
Citigroup continued to pursue higher profits through a wide range of speculative activities, including leveraged corporate lending, packaging toxic subprime loans into mortgage-backed securities and collateralized debt obligations, and dumping risky assets into off- balance-sheet conduits for which Citigroup had contractual and reputational exposures.
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