Analysis Report
Citibank: Launching the Credit card in Asia pacific
Case Analysis Report
Prepared By: GROUP H Abhishek Kulshreshta Anmol Aggarwal Dinesh Tewari Kartika Garg Lalatendu Das Sudhon Kanagaraj
Citibank: Launching the Credit card in Asia pacific
1. Background
In 1988, Citibank’s Asia Pacific consumer bank (referred to as Citibank henceforth) operated in 15 countries throughout Asia Pacific and Middle-east. The bank generated net earnings of $ 69.7 million over net revenue of $209.0 million. Objective Rana Talwar, Head of Citibank’s Asia Pacific Consumer bank had set a growth objective of reaching $100 million in earnings by 1990. Strategy Citibank aimed to use credit card business to Acquire new customers (Card members) Target new customers outside its branch business Cross-sell other Citibank products and services
2. Problem Statement
Rana Talwar is facing the following key decisions Given the goals, should Citibank’s Asia Pacific consumer bank launch the credit card business If they go launch credit cards, which countries should they go for? In the launch scenario, what should be the positioning and pricing strategy in each countries where the launch is taking place
3. Analysis of Business case for credit cards
Citibank’s Asia Pacific Consumer bank expects to increase its earnings by $30 million over two years. Assuming the bank retains its current profitability ratio, it is expected to increase its revenue by 90.8 million over next 2 years. Given the distribution limitations imposed on foreign banks in Asia Pacific region, it is unlikely that Citibank would be able to increase the revenue by $90 million through their current consumer banking operations. Hence Citibank must launch new products to generate additional revenue stream. Looking at the low penetration of Credit cards (Exhibit 8 of the case) and high growth rates (Exhibit 4 of the case) of Asia Pacific countries, Citibank has a great opportunity to launch Credit card business to
Case Analysis Report
Prepared By: GROUP H Abhishek Kulshreshta Anmol Aggarwal Dinesh Tewari Kartika Garg Lalatendu Das Sudhon Kanagaraj
Citibank: Launching the Credit card in Asia pacific
1. Background
In 1988, Citibank’s Asia Pacific consumer bank (referred to as Citibank henceforth) operated in 15 countries throughout Asia Pacific and Middle-east. The bank generated net earnings of $ 69.7 million over net revenue of $209.0 million. Objective Rana Talwar, Head of Citibank’s Asia Pacific Consumer bank had set a growth objective of reaching $100 million in earnings by 1990. Strategy Citibank aimed to use credit card business to Acquire new customers (Card members) Target new customers outside its branch business Cross-sell other Citibank products and services
2. Problem Statement
Rana Talwar is facing the following key decisions Given the goals, should Citibank’s Asia Pacific consumer bank launch the credit card business If they go launch credit cards, which countries should they go for? In the launch scenario, what should be the positioning and pricing strategy in each countries where the launch is taking place
3. Analysis of Business case for credit cards
Citibank’s Asia Pacific Consumer bank expects to increase its earnings by $30 million over two years. Assuming the bank retains its current profitability ratio, it is expected to increase its revenue by 90.8 million over next 2 years. Given the distribution limitations imposed on foreign banks in Asia Pacific region, it is unlikely that Citibank would be able to increase the revenue by $90 million through their current consumer banking operations. Hence Citibank must launch new products to generate additional revenue stream. Looking at the low penetration of Credit cards (Exhibit 8 of the case) and high growth rates (Exhibit 4 of the case) of Asia Pacific countries, Citibank has a great opportunity to launch Credit card business to