Opportunities Analysis for Citigroup Project - Essay Example

Executive summary This report is the study of the results of the new project that Citigroup is planning to implement as its next strategy. The new project is regarding improvement in the systems and technology used in the business at present. The report has come up with the findings that the project is highly beneficial for the company in terms of profitability and market share. Introduction: Citigroup is the largest financial services provider in US and one of the leading financial services company in the world. The company is re-branded in 2007 and is now called as Citi. The company is based on New York City of US. It is formed by the merger of Citicorp and Travelers Group. Citigroup is being recognized as the largest company in the world as per Forbes in 2008. It also has a customer base of over 200 million. The business of the company is divided into three in order to enable specialized services for the customers. The three groups are Global consumer, Global wealth management and Institutional clients group. "Citi is organized into three major business groups - Global Consumer, Institutional Clients Group, and Global Wealth Management." (How Citi is organized, 2007). Here the company plans to implement a project in which they focus on undertaking an up gradation in their computer systems. The new project is aimed at providing improved and speedy services for the customers. The company is very keen on providing services to the customers strictly on the basis of their needs. Inconvenience for their customers is something that the company cannot afford to happen. The company has thus come up with the idea that, for speeding up the process the systems in the company has to be improved and upgraded. This report looks into the various areas regarding the implementation of this project. The relevance of focusing extremely on customer needs is being discussed on the basis of Citigroup. It is explained in the report about the link between the goals and objectives of the company and the new project proposal. As the company is highly focused on the customer needs the new system will enable them to deliver even better quality results. Main body: In this section of the report an analysis of the new project proposal is being done. Environmental scan of Citi group: Like any other business Citigroup too is influenced by the changes in the environment in which it operates. The major environmental factors that affect the company are political, economical and social conditions. Among all these the economic condition is the factor that has the most influence. Any changes in the economic factors affect the company directly and indirectly. The interest rate difference made by the central bank of the basis of the economy makes the company to revise its own interest rates. Similarly political instability will adversely affect the better functioning of the company in the country. The changes in the attitude of the society towards the company also have an impact on the functioning. The strategies of the competitors of the company are one of the major external factors that affect the company. Citigroup faces very high competition from the other leading banks and financial companies. "Citigroup competitors are primarily in the Money Center Banks industry. Citigroup also competes in the Online Banking, Private Banking, and Asset Management sectors."(Citigroup competitors, 2008). The major competitors of Citigroup are Bank of America, Deutsche Bank and JPMorgan Chase. These are some of the leading banks in the world along with Citigroup. Customer needs and expectations: The customers in this particular sector are very choosy. One of the reasons for this is that there are a number of service providers in this sector. Since there are a number of companies operating in the sector the customers are left with sufficient number of products to choose from. The company already has a very large customer base in the market. The major expectation and desire of the customers is fast and better services from the banks. Even if the products of the company are attractive a bad service can lead to withdrawal of account by the customers. Therefore the company cannot compromise on easy providing better services. One of the methods in which the company can improve the quality of its service is by better technological advancement. Customer complaints are very high in the services related to credit cards. Corporate culture: Corporate culture refers to the overall behavior within the organization that includes that of the employees as well as the employers. It refers to the values that are being shared in the organization. "Culture refers to an organization's values, beliefs, and behaviors." (Kotelnicov, 2008). A company employing persons from different regions will reflect a multicultural environment. Citigroup is very keen on maintaining a better corporate culture. Citigroup has also been regarded among the companies that maintain a better corporate culture. The employees are being instructed and trained to be very attentive during the interaction with customers. Therefore the new technology change is very much related to the organizational culture of Citigroup. The new project will make the works easier for the employees. This will make the employees feel good at work and it will ultimately be reflected in their behavior towards the customers. Opportunities for Citigroup: Citigroup is one of the largest financial services providers in the world. As such the company has different opportunities in the present market condition. Here the opportunities for the company in terms of the customer base are being discussed. One of the opportunities for the company is to retain the new customers and to encourage them to opt for new services from them. Another opportunity for the company is to enter the new market as the group already has a better competitive advantage. The first opportunity of Citigroup is basically to retain their existing customers and to motivate them to purchase new products from the bank. In case of complaints from the customers the company redresses the problems at the earliest. In this way the company has maintained a good track record of satisfying its customers. Therefore through a technological update the company will be able to speed up their processes. The process speed up is contributing greatly towards the productivity of the bank. The company has thus the option of satisfying their existing customers through their speed services. When the customers are satisfied they will look for more products and services from the bank. The company should first conduct a survey among their existing customers regarding their further expectations. This will make inform the management of the company to know more about the needs and desires of the existing customers. When the needs of the customers are fully understood the company can design new products. The company has also the option of altering their existing product lines. It is given that the new upgrade will help Citigroup to cut cost of operation. Therefore the company can enjoy a boost up in its profitability. The second opportunity for Citigroup is to expand their market and thus show a better presence in the new markets. This objective is also linked to the technological up gradation in the company. A huge investment is required for entering a new market. It is found that an increment in the profitability is resulted from the technological up gradation. This higher profitability can be deployed for investing in the new market. The company enjoys a very high reputation in the market. When it is able to deliver services of higher standard in the new market the customers will be highly impressed by the services and they will start comparing then services of Citigroup with that of the competitors. Realization of these two opportunities contributes very much towards the goals and objectives of the company. The goal of the organization is to attain better profitability through better services to the customers. The aim of the new project is also similar. New project will improve profitability and will help the organization to improve the quality of services to the customers. The trend of the market is highly favorable for the company. What every customer and the prospective customers expect is superior quality of services. Selection of the project: The project being selected here for the company is that of upgrading the technology of the company. The bank intends to upgrade the operating systems of the computer systems to Microsoft Vista and the Microsoft office to Office 2003. Windows Vista is highly advantageous over Windows XP. Vista has many additional features over XP. Vista has highly integrated security systems. Vista is developed on the basis of Security Development Lifecycle (SDL) methodology. Vista provides better stability for the drivers, incorporates a desktop window manager, and many other features. Similarly Office 2003 also incorporates many additional features over the current version. There are other project options for the company such as infrastructure development etc. Another project that could have been considered is that of a high level advertising campaign. The selection of technology up gradation from the three options is mainly based on the analysis of the cost involved for project implementation and the benefits that is received from the implementation of the project. All the three project alternatives can be considered individually. Infrastructure development: Infrastructure development was one of the project alternatives available. This project refers to developing new facilities and buildings for the company. This project will consume very higher cost for implementation. The benefits that could be received from the project are better. When there is an improvement in the infrastructure there will be an improvement in the working environment too. The improvement in the working environment will motivate the employees to perform more and therefore better productivity is achieved. Mass advertising campaign: A mass advertising campaign is another project option for Citigroup. This project also consumes higher cost but it is cost effective while compared to infrastructure development. A mass advertising campaign will help the Citigroup to enhance its brand image in the market. The company is able to enhance their presence in the market through a mass advertising campaign. System/technology up gradation: This is the third project option for the company. This project intended to improve the present software used in the systems. This also involves cost but it is lower when compared with that of the other two project options. The benefits of this project are highly customer oriented because the benefits of up gradation in the technology are directly made available to the customers. While comparing the cost of implementation of the three projects it can be found that the cost is lower in system up gradation. Infrastructure development and mass advertising involves huge expenditure. The benefits can also be analyzed. The company gains wide popularity and good brand image through mass advertisement. But at the present stage the company already enjoys good reputation in the market. Therefore it is not necessary for the company to go for building brand image. Infrastructure development and system up gradation is giving similar results. That is better staff and customer motivation. But while comparing the cost system up gradation is more cost effective than infrastructure development. Therefore this project is selected for implementation. Technology roadmap for the project: The project will help the company to improve the present products and services. Speed and quality in the services is the primary motive behind the present project. Therefore, when the quality of the services is improved the customers will become more attached to the company. This will help the company to understand the needs of the customers in detail. When the needs of the customers are known in detail the product and services can be altered according to their choice. This will help the company to move from its current state of products and will enable them to deliver new products and services in future. This is one of the benefits of the new projects for the company. When the products are supplied on the basis of the needs of the customers the profitability of the company will increase. For the purpose of delivering new services the company can depend on different options. While entering a new market the company can merge with any domestic companies of that region. This will help the company to earn better knowledge about the new market. Having a joint venture with any domestic company will also help to reduce cost. Similarly acquisition is another option for the bank. Acquisition refers to acquiring a major or whole portion of the share capital of a company by another company. Citigroup can acquire any banks of the company in which it plans to enter for expanding the market share. Feasibility of breaking the project: A project is usually the combination of a set of activities. Therefore rather than implementing the project as a single function it is better to divide the activities into many sub functions. The whole activity can be divided into subgroups and can be assigned to specialized persons so that it is done better. In the technology up gradation project the activities can be divided into sections such as project budget control section, planning section, the implementation section etc. This will make the whole work easier for the company. Research Brainstorming is the research method used to gather information for this report. "It is particularly helpful when you need to break out of stale, established patterns of thinking, so that you can develop new ways of looking at things." (Brainstorming, 2008). Brainstorming is a methodology used when the research is to be carried on the basis of a given situation and no quantitative data is available. It refers to solving a given problem. Here the situation is the implementation of a particular project. For the feasibility of a technology up gradation process the other alternative project options are compared. It is on the basis of the benefits of the technology project that it is selected for the study. Findings: On the basis of the analysis of the project proposal the following findings can be drawn. Improvement in the customer base: The new project will definitely satisfy the existing customers of the bank and will also solicit new customers to the bank. Therefore, the bank can further improve its customer base. Improvement in the profitability: When there is an improvement in the customer base of the bank the profitability of the bank will also increase. This is directly linked to the quality of services. Expansion of business: Through the employment of new systems the company will be able to expand towards the new markets of the world. Conclusion: This report has given an analysis of the proposed project of Citigroup. From the analysis it is found that implementation of the new project is beneficial for the company on various grounds. It is also found that division of the project into subgroups will enable the company to deliver specialized results for the company. References Our businesses. (July 2007), How Citi is organized, Citi. Retrieved March 04, 2008, from http://www.citigroup.com/citigroup/business/index.htm Hoovers. (2008). Citigroup competitors. Retrieved March 04, 2008, from http://www.hoovers.com/free/co/burn.xhtmlID=58365 Kotelnicov, Vadim. (2001). What is corporate culture, ecoach. Retrieved March 04, 2008, from http://www.1000ventures.com/business_guide/crosscuttings/culture_corporate.html Mind Tools. (1995-2008). Brainstorming, generating many radical and useful ideas. Retrieved March 04, 2008, from http://www.mindtools.com/brainstm.html Read More