andre simatupang_citibank
TRANSCRIPT
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Adi Surya 1306356015Andhika Arum Utari 1306419483
Andreas Hotmanri Simatupang 1306356091Ari Nur Widiatanti 1306356116
BUSINESS MODEL INNOVATIONStrategic Management
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Business Model
A companys business model sets forth how its strategy andoperating approaches will create valuefor customer, while at
the same time generate ample revenues to cover costs and
realize a profit.
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Business Model INNOVATION
Hence, companies consider business model
innovationas an opportunity
to build sustainable competitive
advantage (Teece, 2010).
Product innovation no longer offerssufficient competitive advantage indifferentiating successful companies
(McGrath, 2011).
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Background
HOW
When
is one company that redefined
customer value, found new ways to structure
their value creation processes and captured
that value with great returns.
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Case Background
Following an intense competition in 2000, Citibankstarted to establish its e-business strategy
An internet platform should enable all customers withsimilar needs to conduct business online.
Citibanks e-business strategy - Connect, Transformand Extend. The ultimate goal was to build a single Web-
enabled platform for all customers with similar needs.
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Competitive Landscape of Corporate Banking
Citibank wasfounded in1812 as City
Bank of New
York
Third largest
bank companyof the UnitedStates. Their
online servicesdivision is
among themost
successful (15million users)
Transformation from
traditionalbanking to
online bankingcauses by
growing globalmarkets.
E-servicesbecame a
necessary toolfor clients to
avoidpaperwork.
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Citis Mission: Enabling Progress
Common Purpose
One team, with onegoal: serving our
clients andstakeholders.
ResponsibleFinance
Conduct that istransparent,prudent anddependable.
Ingenuity
Enhancing our clients' livesthrough innovation that
harnesses the breadth anddepth of our information,global network and world-
class products.
Leadership
Talented people with thebest training who thrivein a diverse meritocracy
that demands excellenceinitiative and courage.
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Porters Generic Strategy
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Citibanks Strategy: Differentiation
Customer service (web and telephone payment capabilities). I.e. 24 hr callcentre: 021-252 999
Customized internet payment application platform. I.e. Citibank Online.Instead of token, they use OTP.
Investment in technology to support front end and back end electronicsystems.
Three core products. I.e. Transaction, Corporate Finance, and Treasury
Market Service.
Unified platform and group wide expertise.
Online investment applications for short term investments (treasuryvision).
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SWOT Analysis
STRENGTH
- Global Market
- Banking of the Citigroup
- Innovative product offering
- Comprehensive selection offinancial product
- Strong privacy and data process
- Good corporate citizen
WEAKNESESS
- Tarnished brand name
- Issues of corporate governance
OPPORTUNITIES
- Growth markets
- Chinese markets- Online presence
- Strengthen customer relationship
by community involvement
- Look for acquisition that are
compelling strategically and
financially
THREAT
- Foreign exchange fluctuations
- Market conditions- Regulatory forces
- Competition from BRICK, etc.
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Porter Five Forces
Rivalry
1. Many players withlittle differentiation
2. Mature industry
3. New product
Threats of New Entrance
1. Existing loyalty to major brand
2. Huge investment, High fixed cost
3. Scarcity of resources
4. High cost switching company
Power of Buyers
1. Large number of buyers
2. Purchase large volumes
3. Customer are price sensitive
4. Switching to another competitive product issimple
Availability to Substitutes
1. Presence company, such as: Western Union, PayPal
2. If substitutes are similar, it can be viewed in the samelight as a new entrant
Power of Supply
1. There are a very few suppliers of particularsproduct categories
2. Switching need high cost
3. Supplier industry has higher profitability thanbuyer industry
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Value Creation and Value Capture
E-BusinessStrategy fromCitibank meetcustomer needsCustomer value
added INCREASE
In the beginning,Citibank investedhuge of money tocreate ElectronicStrategy
But, with huge ofcustomer, thisstrategy gain hugeprofit
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Value Creation and Value Capture
Citibank E-Business Strategy
Value ChainManagement
DeliveredCustomer Value
DramaticallyRedesign
Customer Base
CitiDirect Connecting customerand Citibank everywhere every
time Easy Access
1. Build new globalinfrastructure deliver e-products more quickly &efficiently
1. Regionalization cash &trade focus
2. Internalizing the web3. Straight-through
automation
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Value Creation and Value Capture
Value creation:1. E-Business strategy E-
Chanel, E-Payment and WebBase
Value capture:1. At the beginning, Citibank must invest huge money to create E-
Business but, with its huge market share, at last, total cost will
be low
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Positioning
Which basic customer need are we trying to fulfill?
Corporate Customer Customer whose not senstive to price
How can we establish and retain a unique positionin our customersminds ?
Citibank preferred to emphasise its customer service response time, technology and support
taking over some of the back-office functions of its customers
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Product and service logic
Web-enabled financialproducts
Citibank e-Business Structure
Which products andproduct features arenecessary to become
indispensable and
strengthen citipositioning ?
Embed Citibank as the trusted brand withincommunities
Build a network of strategic partners Help customers to serve themselves
Web-enable core services
Create knowledge-based e-services
e-Us
What is the uniqueproduct benefit citi offerits customers?
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Added value logic
How citi design its value creation processes to effectively andefficiently bring our offers to the market?
CONNECT
TRANSFORM
EXTEND
What are citi core competencies and core processes on which citito focus and which allow citi to create value
Proprietary Data
Operating worlwide Leader in online financial services
Great Technology Platform
qualified and experienced staff at Citibank
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Sales and marketing logic
How do we attract customers?
Global Reach
Strong Brand
How do we retain customers?
Citibanks Alliance Strategy
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Profit formula
Citi empower local, regional and global customers and the
B2B2C marketplace and provide solutions to help them take
advantage of the efficiencies and opportunities created by e-
commerce, this strategy is using differentiation strategy.
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Suggested Strategies
Strengthen customer relationship by community
involvement
Communicate benefits of online presence clearly
Look forward for acquisition that are compelling strategically
and financially
Handle major international operations from to gain expense
benefit
Position itself as a Global bank focusing on customer benefit
Innovative product
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- Thank You -