Citibank Case Analysis

In: Business and Management

Submitted By krrzzy
Words 1644
Pages 7
Citibank: Launching the credit card in Asia Pacific
Country entry strategy

Objectives of this case ...

 To understand market evaluation, target market selection, and product positioning issues in services operations.  To appreciate globalization/country entry issues in financial products.  To understand the underlying economics of customer acquisition and retention.

Key Strategic Issues
Should Citibank launch the card product ? Why ? Why not ? Given the upscale customer base , how should Citibank position its card, if it decides to launch it ? Which countries should Citibank enter first? Which countries should it avoid?

Few More Operational Issues
How should Rana Talwar convince his country managers and H.Q to accept the card product? What Organizational mechanisms does he have under his control? If you choose not to introduce the card, what do you do to achieve the $100 mio. earnings target by 1990? What kind of Branch banking products should the bank offer?

Economic Analysis

 How many card customers does Citibank need to break even on its investment ?

Economic Analysis

 First step is to ascertain the credit card revenue per customer of $163 (table B page 6) Options available: - assume Hong Kong experience as “typical” of the region. - If we have to target affluent with premium positioning you may use $250/ customer - for mass market strategy take $140/ customer

Cost component of analysis
Three parts :  Variable cost of customer acquisition.  Variable cost of customer maintenance.  Fixed cost of regional card center.

Variable Cost Of Customer Acquisition
Refer to Table A

All assumptions should be drawn from the paragraph preceding Table A.  The “effective customer acquisition rate” (customers/prospects) is a measure of the effectiveness of each of the marketing program component.
 For example, 27% of…...

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