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Citibank's Co-Operative Strategy in China: The Renminbi Debit Card  
 
Product Ref: 09/412C Company: Citibank (China) Co. Ltd

Product Type: Case Industry: Banks & Diversified Financials

Related Product(s): Teaching Note
Authors: Stephen Ko   Havovi Joshi
The strategy of Citibank (China) Co. Ltd ("Citi") in China has evolved as the business environment has changed. Since the start of its operations in China in 1902, the global banking giant has preferred opening offices as branches (when allowed by the government) rather than subsidiaries. In 2001, China announced that it would join the World Trade Organization and would undertake a series of measures to open up its banking sector. By this time, Citi had realised that the pace of its growth in China had been very slow. Consequently, the bank reviewed its strategy and decided to enter the market as an embedded, or genuinely local, bank. Citi's July 2008 agreement with China Unionpay ("CUP"), China's only national bankcard association, allows Citi's debit cardholders to enjoy the convenience of access to CUP's vast network in China. The agreement is the latest milestone in the bank's strategy to establish its presence in the emerging and rapidly growing China market through a series of strategic alliances.

Why has Citi changed its strategy and started entering such co-operative alliances? What are the risks and advantages associated with using such co-operative strategies?
Functional Area : Economics & Business Policy
Strategy & General Management

Issues: This case identifies some of the co-operative strategies that Citi has pursued since 2001. It highlights the principles of co-operative strategic management and exposes students to some of the kinds of co-operative strategies that large international banks such as Citi enter into. It can be used to demonstrate how important it is for firms to be flexible and develop strategic alliances when required by the market environment. Through this case, students can understand the kinds of co-operative strategies these alliances represent, and the risks and benefits associated with each of them.
Length: Text: 7 pages
Exhibits: 4 pages
Country: China (People's Rep. of)

Pub. Year: 2009 Level of Difficulty: 1
         
This product type is available in the following language(s):      English
         
Related Information: N/A
 
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