Walmart Analysis

WALMART ANALYSIS

The following Strategic Management plan evaluates Citigroup's competitive position and internal and external environments to determine strategic direction. Alternative strategies are then derived and chosen. The plan recommends that Citibank select to expand its insurance business to foreign markets, by focusing on online banking and the consumer demand for online financial processing. It analyzes how Citibank differentiates itself from the competition by offering a broad line of products and services and exploiting cutting edge technology to support global online banking transactions. It also explores the threats, opportunities, weaknesses, and strengths impacting Citibank's success in competing for online banking market share.

Online banking has brought traditional financial functionality into Cyberspace. The Compounded annual growth of online banking since 1994 has been 80%. Worldwide, more than 100 million households now bank online. Looking ahead, usage is projected to increase to 50+ million U.S. households. Worldwide, the total is expected to triple to 300 million or more households (Online Banking, 2003).

Internet Banking enables financial institutions to market and sell new products, increase their end user base and build longer lasting relationships. Launching online banking services requires minimal demand on the banks existing infrastructure and resources. With Internet Banking, the Internet branch serves as the financial hub for end users' online banking needs and strengthens the brand and image. "Banks view online banking as a powerful "value added" tool to attract and retain new customers while helping to eliminate costly paper handling and teller interactions in an increasingly competitive banking environment."

The key benefits of online banking to businesses and consumers are time and convenience. This convenience is the driving force in the demand and increase of online banking. T

Below are the top 5 reasons why people have chosen to bank online:

*Convenience: Unlike your corner bank, online banking sites never close; and they're only a mouse click away.

*Ubiquity: If you're out of town you can log on instantly to your online bank and take care of business, 24/7.

*Transaction speed: Online bank sites can confirm transactions at or quicker than ATM processing speeds.

*Efficiency: You can access and manage all of your bank accounts, including IRAs, CDs, even securities, from one secure site.

*Effectiveness: Online banking sites offer account aggregation, stock quotes, rate alerts and portfolio managing programs to help you manage all of your assets. (Bank rate, 2003).

Stockholders, corporate executives, employees, Wall Street, investors, and online customers and businesses have a stake in the success of Citibank's online banking program. Citicorp's senior management and Board of Directors own approximately 85 million shares of Citigroup stock. More than 2/3 of Citigroup's employees are also stockowners investing a portion of their salaries into the company each month.

Citibank's online initiatives and strategies must focus on their ability to meet consumer demands and package their core business functions to offer a feature rich product.

By analyzing the marketplace, creating a value-delivery network or supply chain, and creating a competitive advantage in the market segment, a company can maximize its profits. Citibank represents both a Business-to-Consumer (B2C) and Business-to-Business (B2B) organizational model. It creates value by limiting the intermediaries involved with the distribution of its product, streamlining its business, and reducing costs. This value creation ultimately increases profits. The B2B business model creates value by networking and partnering with other businesses to offer a broad range of products and services. By limiting intermediaries' involvement with the distribution of its product the company can streamline its business, reduce costs, and ultimately add to the bottom line.

Businesses to Consumer online business models have the ability to create direct relationships with the consumer without involving intermediaries, such as distributors, wholesalers, or dealers. ("e-Business Principles and Practices," 2002, page 337). Just like the traditional brick and mortar business model, the purpose of a firm is to create value for its customers and create loyal return business.

To support the firm's activities and produce its products, an organization must perform tasks geared towards design, production, marketing, and delivery. Michael Porter of Harvard University proposed the value chain as a tool for identifying ways to create more customer value. (Kotler, P 2000, page 44). An example of Mr. Porter's Value Chain is depicted in the diagram below.

Materials are brought into the company and then converted in products with are then shipped to customers. The marketing and sales department markets these products and the service department, services them.

In the case of Citibank, checking accounts, investment accounts, savings accounts, and many other financial products are offered to consumers. The firm's infrastructure covers the costs of management, planning, finance, accounting, legal, and government affairs that are required to produce the primary and support activities.

The better a firm manages its value chain the more efficient it can operate thus creating shareholder value. The bottom line, value created equates to increased profits for the firm. Benchmarking best practices and looking for competitive advantages by streamlining operations for suppliers, distributors, and customers, creates an efficient supply chain that can maximize profits.(Kotler, P., 2000, page 45).

According to marketingteacher.com, the (value) chain consists of a series of activities that create and build value. These activities culminate in the total value delivered by an organization. The 'margin' depicted in the diagram is the same as added value. The organization is split into 'primary activities' and 'support activities. An example of a primary activity would be customer databases management and storage. Likewise, support activities might include financial tools accessible through the Citibank website.

As a member of Citigroup, Citibank's senior management strives for a common focus and consistent principles in an effort to grow the bank and generate more opportunity for its customers, shareholders, and communities.

Citibank's