Case Analysis of Citigroup Essay

1141 Words Oct 20th, 2005 5 Pages
Citigroup Case Analysis The purpose of this paper is to debate the pros and cons of Citigroup's entry into the Chinese financial market and their ability to adapt to this foreign culture. Team B debated both sides of the case with strong arguments for and against Citigroup's ability to adapt. The paper will present both sides and conclude with Team B's final agreement on Citigroup's success or failure to adapt in the Chinese financial market.
Historical Operations
Citibank has operated in China for more than a century and has a long history of goodwill in the country. The company began operating in China in 1902, and by 1930 was one of the country's largest and most important banks. Citibank had branches in nine cities, but the
…show more content…
They have been unable to overcome the income differentials and the focus that Chinese have on interpersonal harmony which is left over from government owned leadership (Pearce & Robinson, p. 30-6). They have also been unable to successfully plant expatriates or cultivate successful managers from the labor pool (Pearce & Robinson, p. 30-6). This is yet another example of how they have failed to adapt to the environment despite an enormous advantage in position.
Branch Networking
Citibank, along with many other banks jumped into the financial race when China joined the WTO. One of the big differences is that Citibank had been there for quite some time. Many experts expected large international retail banks like Citibank to move quickly and increase branch networking in China, but it has not happened (He & Fan, 2004, p. 5). Once again these facts prove that Citibank has fallen well short of adaptation to environmental factors in China's financial market.
Joint Venturing A specific instance where Citibank was unwilling to adapt to the Chinese environment was through joint ventures. China had stated that all foreign insurance ventures must be 50% owned by Chinese government. Citibank felt that such ventures would lack long-term success and therefore decided to forego joint ventures and attempt to penetrate the insurance market through mergers and acquisitions. The

Related Documents