Philippine School of Business Administration - Manila

826 R. Papa St., Sampaloc, Manila City

Case Study: Citigroup Inc., 2015

Submitted to Professor Erwin C. Zabala, DBA, PD-SML

In Partial Fulfillment of the Requirements for the subject - Strategic Management

By:

De Castro, Abegail

Edaño, Kyla

Estonactoc, Kyla Daphne

Martinez, Jadelyn

Micua, Frankie Ann

2024
 TABLE OF CONTENTS

I. CASE BACKGROUND
II. ENVIRONMENT ANALYSIS
A. GENERAL ENVIRONMENT
A.1 OPPORTUNITIES
A.1.1. SOCIO-CULTURAL-DEMOGRAPHIC FORCES
A.1.2. TECHNOLOGICAL FORCES
A.1.3. ECONOMIC FORCES
A.1.4. ENVIRONMENTAL FORCES
A.1.5. POLITICO-LEGAL FORCES

A.2 THREATS
A.2.1. SOCIO-CULTURAL-DEMOGRAPHIC FORCES
A.2.2. TECHNOLOGICAL FORCES
A.2.3. ECONOMIC FORCES
A.2.4. ENVIRONMENTAL FORCES
A.2.5. POLITICO-LEGAL FORCES

B. OPERATING ENVIRONMENT
B.1 OPPORTUNITIES
B.1.1. RIVALRY AMONG COMPETING FIRMS
B.1.2. POTENTIAL ENTRANTS
B.1.3. SUBSTITUTE PRODUCTS
B.1.4. BARGAINING POWER OF SUPPLIERS
B.1.5. BARGAINING POWER OF BUYERS
B.1.6. INDUSTRY GROWTH
B.1.7. SHAREHOLDERS’ ACTIONS
B.1.8. CREDITORS’ ACTIONS
B.1.9. COMMUNITY PERCEPTIONS
B.2 THREATS
B.2.1. RIVALRY AMONG COMPETING FIRMS
B.2.2. POTENTIAL ENTRANTS
B.2.3. SUBSTITUTE PRODUCTS
B.2.4. BARGAINING POWER OF SUPPLIERS
B.2.5. BARGAINING POWER OF BUYERS
B.2.6. INDUSTRY GROWTH
B.2.7. SHAREHOLDERS’ ACTIONS
B.2.8. CREDITORS’ ACTIONS
B.2.9. COMMUNITY PERCEPTIONS

C. INTERNAL ENVIRONMENT
C.1 STRENGTHS
C.1.1. MARKETING
C.1.2. PRODUCTION/OPERATIONS

C.1.3. FINANCE
C.1.4. ORGANIZATION & MANAGEMENT
C.1.5. HUMAN RESOURCES
C.1.6. RESEARCH & DEVELOPMENT
C.1.7. INFORMATION SYSTEMS

C.2 WEAKNESSES
C.2.1. MARKETING
C.2.2. PRODUCTION/OPERATIONS
C.2.3. FINANCE
C.2.4. ORGANIZATION & MANAGEMENT
C.2.5. HUMAN RESOURCES
C.2.6. RESEARCH & DEVELOPMENT
C.2.7. INFORMATION SYSTEMS

D. EXTERNAL FACTOR EVALUATION MATRIX

E. INTERNAL FACTOR EVALUATION MATRIX
 F. COMPETITIVE PROFILE MATRIX
G. ASSUMPTIONS
G.1. GENERAL ENVIRONMENT STABILITY
G.2. INDUSTRY GROWTH PROSPECTS
G.3. COMPANY’S COMPETITIVE POSITION

III. PROBLEM STATEMENT

IV. ALTERNATIVE COURSES OF ACTION
A. TOWS MATRIX
B. INTERNAL-EXTERNAL MATRIX
C. GRAND STRATEGY MATRIX
D. SUMMARY OF STRATEGIES

V. RECOMMENDED ALTERNATIVE AND ACTION PLAN

A. QUANTITATIVE STRATEGIC PLANNING MATRIX
B. ACTION PLAN

VI. FINANCIAL PROJECTIONS

A. SALES FORECAST
B. INCOME STATEMENT FORECAST
C. BALANCE SHEET FORECAST
D. CASH FLOW FORECAST
 I. CASE BACKGROUND

Citigroup Inc., headquartered in New York City, is a global company that offers financial
services. It is the largest banking enterprise in the world providing quality services to over 1,000
cities, 160 countries, and millions of people and striving to create the best outcomes with
financial solutions that are simple, creative, and responsible.

Citigroup is divided into two (2) segments: Citicorp (Global Consumer Banking and
Institutional Clients Group) and Citi Holdings (Non-core Businesses). Between the two
segments, Citi Holdings comprises only 6% of the company’s overall balance sheet. Citicorp has
two divisions: Global Consumer Banking (GCB) and Institutional Clients Group (ICG). The GCB
division comprises four (4) of Citigroup's Regional Consumer Banking (RCB) businesses and
these banks provide financial services such as credit cards, commercial banking, and more. On
the other hand, the ICG division focuses on providing products and services to public sectors,
high-net-worth individuals, and corporations. It also offers lending, prime brokerage, derivative
securities, and other services.

The company faced various ethical issues where they incurred charges to cover costs
such as legal, restructuring, and investigations costs. In December 2014, Citigroup was called
out for alleged unethical behavior by Senator Elizabeth Warren. She highlighted that two out of
the top five economic advisors, President Bush and Obama, were associated with the company.
It also encountered issues in its Mexican operations which included falsified invoices and fraud.

Citigroup Inc. has resolved much of its mortgage litigation, cutting Citi Holdings' annual
loss by 50%. CEO Corbat is now prioritizing cost-cutting over asset sales in Citi Holdings to
achieve break-even. Additionally, all 101 countries where Citi does business are categorized
into four buckets for better resource allocation.
 II. ENVIRONMENT ANALYSIS

A. GENERAL ENVIRONMENT
A.1 OPPORTUNITIES
A.1.1 SOCIO-CULTURAL-DEMOGRAPHIC FORCES
● The increase in the demands in mergers and acquisitions results to a
growth in profit for financial institutions to provide financial services. The
country's shifting growth rate and emerging trend on consumer behavior
creates an opportunity for banks to build new revenue streams and
modify their offers to venture into various product categories cater to the
diverse tastes of their clients.

A.1.2 TECHNOLOGICAL FORCES

● The emergence of digital banking presents an opportunity for financial
institutions to provide and create more effective and convenient services.
It can also use data analytics, one of the new technologies to improve
productivity and efficiency.

A.1.3 ECONOMIC FORCES

● The Federal Reserve of the United States reported the continuous
changes in the interest rates thus affecting the economy and the industry
to make investment decisions for a new product or business ventures.

A.1.4 POLITICO-LEGAL FORCES

● Changes or new regulations create opportunities to adapt and innovate
potentially leading new products or services that comply with evolving
regulatory requirements.

A.2 THREATS
A.2.1 TECHNOLOGICAL FORCES
● Cybersecurity threats that can cause money losses and reputational
damage.
● Investments in new technologies have the potential to jeopardize a
company's profitability because they need significant resources for
 product innovation and development. The budget will be impacted
whether new technologies are bought or existing ones are upgraded.

A.2.1 ECONOMIC FORCES

● The continuous changes and fluctuation in the interest rates and the
unstable condition of the economy provides uncertainty and fear to all
including the banking industry and its customers. There will always be
survival threats as long as the financial markets are unstable.

A.2.1 ENVIRONMENTAL FORCES

● Financial institutions may be in danger due to the fierce competition in the
sector and the entry of new providers of financial services.
● After growing just 2.5% in 2012 and 3% in 2013, Latin America is
predicted to have experienced its worst growth in 2014, at 1.2% in 2015.

A.2.4 POLITICO-LEGAL FORCES

● Regulation changes may have an effect on how banks operate and force
financial institutions to modify their procedures in order to comply, which
may incur extra costs.

FORCES OPPORTUNITIES THREATS

Socio-Cultural-Demographic Forces ✔️
Technological Forces ✔️ ✔️
Economic Forces ✔️ ✔️
Environmental Forces ✔️
Politico-Legal Forces ✔️ ✔️
B. OPERATIONAL ENVIRONMENT
B.1 OPPORTUNITIES
B.1.1 RIVALRY AMONG COMPETING FIRMS
● Dominated the investment banking and securities business operation in
the United States.
● Largest banking enterprise in the world based on geographic coverage.

B.1.2 POTENTIAL ENTRANTS

● Advantage over the potential entrants because the firms have already
established their name over the past years.
● Have the resources to develop and expand their market to cater to more
customers.

B.1.3 INDUSTRY GROWTH

● The adoption of new technology standards and government free trade
agreements has provided an opportunity to enter a new emerging market.

B.1.4 SHAREHOLDERS’ ACTIONS

● Selling assets to cutting costs which resulted in cutting their annual loss
into half.

B.2 THREATS
B.2.1 RIVALRY AMONG COMPETING FIRMS
● Major rivalry exists among prominent firms like J.P. Morgan, Bank of

America, Morgan Stanley, and Goldman Sachs in the US investment

banking and securities market.

B.2.2 POTENTIAL ENTRANTS

● The emergence and expansion of online banks pose a potential threat to
established banking institutions.
 B.2.3 SUBSTITUTE PRODUCTS
● The rise of online banks as alternatives to traditional ones. It also
discusses potential impacts from Bitcoin, PayPal, and recent competitors
like Apple and Google in the credit card market.

B.2.4 COMMUNITY PERCEPTIONS

● The Mexico issue that they found $235M in falsified invoices reported
through financing programs might affect the community's perceptions.

FORCES OPPORTUNITIES THREATS

Rivalry among competing firms ✔️ ✔️

Potential Entrants ✔️ ✔️
Substitute Products ✔️
Bargaining Power of Suppliers

Bargaining Power of Buyers

Industry Growth ✔️
Shareholders’ Action ✔️
Creditors’ Action

Community Perceptions ✔️

C. INTERNAL ENVIRONMENT
C.1 STRENGTHS
C.1.1. MARKETING
● As the biggest bank in the world, Citigroup serves millions of customers in
more than 1,000 locations across 160 countries with high-quality financial
services.
 ● With more than 900 million retail accounts across several well-known
brands, Citigroup is the biggest credit card provider in the world.
● The four regional consumer banking (RCB) divisions of Citigroup are part
of the company's Global Consumer Banking (GCB) segment, which has
the most revenue of any other sector.

C.1.2. PRODUCTION/OPERATIONS
● Citigroup is operating in 160 countries, more than 16,000 locations
globally, and 251,000 full-time employees.
● Citicorp is primarily focused on offering worldwide banking services to
businesses and individuals. The company has strong ties to several
emerging regions, particularly in Latin America.
● Citigroup provides global banking, advisory services, derivative services,
brokerage, mortgages, auto loans, and etc.

C.1.3. FINANCE
● Citi Holdings continued to turn a profit in the second quarter of 2015,
helping Citigroup post net income of $4.8 billion as opposed to $181
million in the same time the previous year. At $17.8 billion, Citicorp's
revenues, net of interest expenditure, climbed by 2% over the same time
last year.

C.1.4. ORGANIZATION & MANAGEMENT

● When CEO Corbat changed his approach from selling assets in Citi
Holdings that had previously acquired loss to lowering costs for Citi
Holdings, Citigroup settled a significant portion of its mortgage litigation.
Citigroup attempted to divest OneMain as well, but the pricing was not
appropriate at the moment.

C.1.5. HUMAN RESOURCES

● As stated in the company's mission statement, "Citi works tirelessly to
serve individuals, communities, institutions, and nations," Citigroup has a
large workforce of dedicated workers, as evidenced by the fact that they
employ 241,000 surpassing Bank of America.
 C.1.6. RESEARCH & DEVELOPMENT
● Citigroup is a multinational banking company renowned for its strong
research and development divisions. They make investments in a number
of sectors, including banking, financial services, innovation, and
technology. Citigroup's strength in research and development is its
capacity to assess market trends, create new services, and improve its
information technology (IT) systems in order to satisfy shifting demands
from customers.

C.1.7. INFORMATION SYSTEMS

● The systems cover more ground in financial management than merely
standard tasks like tax reporting, record-keeping, and analysis. Citigroup
has also put in place crucial steps to guarantee that its MIS can discover
prospective niche markets, as well as giving data on the present market
trends. The organization's creation and dissemination of knowledge is
another focus of the MIS. It also focuses on handling and resolving
problems related to the company's human resource management
division. (Citibank, 2015)

C.2 WEAKNESSES
C.2.1. MARKETING
● Citigroup’s 2014 Income has decreased by 53% compared to 2013.
● The business has lost some market share in the specialized categories as
a result of its inability to meet the difficulties posed by the recent arrivals
into the industry.

C.2.2. PRODUCTION/OPERATIONS
● Citi Holdings is currently cutting costs due to the loss of $3.3 billion in
2014.
● Citigroup raised more capital to invest in the channel due to high days
inventory compared to other competitors.
C.2.3. FINANCE
● Citigroup incurred charges of $3.5 billion in Q4 of 2014 to cover legal and
restructuring costs.
● The bank allocated $2.7 billion of that amount to cover legal costs
associated with investigations into currency trading, the manipulation of a
key interest rate, as well as anti-money laundering and related probes.

C.2.4. ORGANIZATION & MANAGEMENT

● Citigroup does not have a publicly available vision statement, which is
important in creating a strategic plan to foresee the company's goal.
● Citigroup has a complex organizational structure that is only applicable to
the current business strategy which prevents it from expanding the market
adjacent categories.

C.2.5 RESEARCH & DEVELOPMENT

● In 2015, Citigroup sold its Japanese retail operations to Sumitomo Mitsui
Banking Corp. for $400 million, ending this Citigroup problematic,
money-losing segment.

C.2.6. INFORMATION SYSTEMS

● As there are expansions worldwide, there is a lack of investment in
technology for more integration of processes.

FUNCTIONAL AREA STRENGTHS WEAKNESSES

Marketing ✔️ ✔️
Production/Operations ✔️ ✔️
Finance ✔️ ✔️
Organization & Management ✔️ ✔️
Human Resources ✔️
Research & Development ✔️ ✔️
 Information Systems ✔️ ✔️

D. EXTERNAL FACTOR EVALUATION MATRIX

WEIGHTED RATING
KEY EXTERNAL FACTORS WEIGHT RATING
SCORE VALUES

OPPORTUNITIES: (4) – superior response

(3) – above ave.

1. Emergence of digital banking 0.17 4 0.68
response

2. Modify their offers to provide

customized goods and services that
0.12 3 0.36 (2) – ave. response
cater to the diverse tastes of their
clients.
3. Changes or new regulations
create opportunities to adapt and
innovate potentially leading new 0.1 3 0.3 (1) – poor response
products or services that comply with
evolving regulatory requirements.

4. Increase in the demands of

0.14 2 0.28
financial advisory services.

THREATS: Overall Rating:

1. Cybersecurity threats that can

cause money losses and
0.11 4 0.44 >2.5 – high response
reputational damage to financial
institutions

2. The continuous changes and

fluctuation in the interest rates and
0.08 2 0.16 2.5 – medium response
the unstable condition of the
economy provides uncertainty.
3. J.P. Morgan’s segment Consumer
& Community Banking have the
largest revenue and their top income 0.18 4 0.72 <2.5 – low response
driver which offers ATMs, online
banking and business banking.
4. The expansion of Internet banks
as alternatives also runs over the
possible effects of Bitcoin and
0.10 3 0.30
PayPal as well as recent entrants
into the credit card market, including
Apple and Google.
Conclusion:
Citigroup's
TOTAL WEIGHTED SCORE 1.00 3.24
strategies are
responding

E. INTERNAL FACTOR EVALUATION MATRIX

WEIGHTED RATING
KEY INTERNAL FACTORS WEIGHT RATING
SCORE VALUES
(4) – major
STRENGTHS:
strength
1. Citigroup is the largest banking
enterprise in the world providing
(3) – minor
quality services to over 1,000 cities, 0.25 4 1
strength
160 countries, and millions of
people.
2. Citigroup is the world's largest
credit card issuer with over 900 (2) – minor
0.12 4 0.48
million retail accounts with various weakness
well-known brands.
3.Citigroup has established large (1) – major
0.07 3 0.21
market in the United States weakness
4. Citigroup’s Global Consumer
Banking (GCB) segment is the
0.05 3 0.15
largest in terms of revenues of any
other segment
WEAKNESSES: Overall Rating:

1.Citigroup faced various ethical 0.18 1 0.18 >2.5 – strong

issues internal position
2.Citigroup has a complex
organizational structure that is only
applicable to the current business 2.5 – average
0.14 2 0.28
strategy which prevents it from internal position
expanding the market adjacent
categories.
3. As there are expansions <2.5 – weak
worldwide, there is a lack of internal position
0.12 2 0.24
investment in technology for more
integration of processes.
4. Scandals which heavily affected Conclusion:
0.07 2 0.14
Citigroup's image Citigroup's internal
TOTAL WEIGHTED SCORE 1.00 2.68 position is strong

F. COMPETITIVE PROFILE MATRIX

Citigroup Inc. J.P Morgan Chase Bank of America

Critical Success Factors Weight Rating Score Rating Score Rating Score

Brand Image 0.10 4 0.40 3 0.30 2 0.20

Product Variety 0.35 2 0.70 3 1.05 4 1.40

Product Quality 0.20 3 0.60 4 0.80 3 0.60

Financial Position 0.20 3 0.60 4 0.80 3 0.60

Technology 0.15 3 0.45 4 0.60 2 0.30

Total 1 2.75 3.55 3.00

Rating Values: 4 = major strength, 3 = minor strength

2 = minor weakness, 1 = major weakness
Conclusion: J.P Morgan Chase is the strongest.

Citigroup Inc. is performing relatively low on the Competitive Profile Matrix (CPM). J.P
Morgan Chase has the highest total score with 3.55 due in part to J.P Morgan Chase’s Product
Quality and its Financial Position. Citigroup Inc. must elevate its strategic planning to adjust the
company’s trajectory.

G. ASSUMPTIONS
G.1 GENERAL ENVIRONMENT STABILITY
● The general environment is stable because economic forces bring about some
change, giving financial institutions regular chances to innovate, adapt, and
strategically align their products with the increasing socio-cultural, technological,
economic, and politico-legal forces. Opportunities in that environment show the
business is capable of defending despite its threat.

G.2 INDUSTRY GROWTH PROSPECTS

● Citigroup Inc. is a leading industry growth opportunity due to its extensive global

reach, well-established reputation, innovative skills, and ability to strategically

adjust to changing market conditions.

G.3 COMPANY’S COMPETITIVE POSITION

● Citigroup being a globally known company with a strong brand reputation shows
its strengths in various ways including having a diverse business portfolio and
strong operational capabilities together with their continuous good business
performance.
 III. PROBLEM STATEMENT

The major problem of Citigroup is that the company is facing the lack of innovation impacting
adaptability as evidence by following:
1. Citigroup’s lack of investment in technology for global expansions.
2. The company does not have publicly available vision statements.
3. Citigroup organizational structure is only applicable to the current strategy.
4. Citigroup’s 2014 income decreased compared to the last year (2013).
 IV. ALTERNATIVE COURSES OF ACTION

A. TOWS MATRIX

STRENGTHS WEAKNESSES
1. Citigroup is the largest
banking enterprise in the
world providing quality 1.Citigroup faced various ethical
services to over 1,000 issues
cities, 160 countries, and
millions of people.
2.Citigroup has a complex
2. Citigroup is the world's
organizational structure that is only
largest credit card issuer
applicable to the current business
with over 900 million retail
strategy which prevents it from
accounts with various
expanding the market adjacent
well-known brands.
categories.
3. As there are expansions
3.Citigroup has established
worldwide, there is a lack of
large
investment in technology for more
market in the United States
integration of processes.
4. Citigroup’s Global
Consumer Banking (GCB)
segment is the largest in
terms of revenues of any 4. Scandals which heavily affected
other segment Citigroup's image
OPPORTUNITIES SO Strategies: WO Strategies:
1. The emergence of digital
banking presents an
opportunity for financial
institutions to provide and
create more effective and
convenient services.
2. Reaching out to markets
with diverse cultures,
demographics, and values
Product Development (S2,
can help financial Product Development (W3, O1, O3)
S4, O1, O3)
institutions to develop their
customer base by taking
advantage of the country's
shifting growth rate. Banks
might modify their offers to
provide customized goods
and services that cater to
the diverse tastes of their
clients.
3. Changes or new
regulations create
opportunities to adapt and
Market Development (S1,
innovate potentially leading Market Penetration (W2, W4, O1)
S3, O2, O4)
new products or services
that comply with evolving
regulatory requirements.
4. The adoption of new
technology standards and
government free trade
Market Penetration (S1,
agreements has provided
S2, S3, 01)
Citigroup Inc. an
opportunity to enter a new
emerging market.
THREATS ST Strategies: WT Strategies:
1. Cybersecurity threats
that can cause money
losses and reputational
damage to financial
institutions include
ransomware, phishing,
viruses, and data
breaches.
2. The continuous changes
and fluctuation in the
interest rates and the
unstable condition of the
economy provides
uncertainty and fear to all Product Development (S2, Product Development (W3, T1, T3,
including the banking S4, T1, T4) T4)
industry and its customers.
There will always be
survival threats as long as
the financial markets are
unstable.
3. Rivalry between big
banks such as J.P. In the
US investment banking and
securities market, Morgan, Market Penetration (S2,
Bank of America, Citigroup, S4, T2)
Morgan Stanley, and
Goldman Sachs are the
most prominent firms.
4. The expansion of
Internet banks as
alternatives to conventional
brick-and-mortar kbanks is
mentioned in the text. It
Market Development (S1,
also runs over the possible
S3, T3, T4)
effects of Bitcoin and
PayPal as well as recent
entrants into the credit card
market, including Apple
and Google.

B. INTERNAL - EXTERNAL MATRIX

The IE matrix shows that Citigroup should grow and build its position. The EFE and IFE
scores of Citigroup are 3.24 and 2.68 respectively. This illustrates that the company shows
strong ability to respond to the external environment and that they have an average internal
environment. Citigroup should focus on intensive strategies such as product development.
 C. GRAND STRATEGY MATRIX

The bank sector is clearly in a phase of rapid market growth. Citigroup reported higher
revenues in 2014 than in 2013, while J.P Morgan Chase and Bank of America reported lower
revenues in 2014. Citigroup has also been afflicted by dependence on foreign markets,
securities and trading business, and ethical issues that have affected their performance and
resulted in significant fines. As Citigroup attempts to restructure with a more US focus, and less
dependent on securities and trading, the strategies should include approaches in terms of
development.

D. SUMMARY OF STRATEGIES

STRATEGY OPTIONS TOWS IEM GSM TOTAL

A. INTEGRATION STRATEGIES

1. Forward Integration 1 1

2. Backward Integration 1 1

3. Horizontal Integration 1 1

B. INTENSIVE STRATEGIES
 1. Market Penetration 1 1 1 3

2. Market Development 1 1 1 3

3. Product Development 1 1 1 3

C. DIVERSIFICATION STRATEGIES

1. Concentric Diversification `1 1

2. Conglomerate Diversification

3. Horizontal Diversification

D. DEFENSIVE STRATEGIES

1. Joint Venture

2. Retrenchment 1 1

3. Divestiture

4. Liquidation

The proposed courses of action (ACA) were identified based on the Strategic Factor
Analysis, Competitive Profile Matrix, TOWS Matrix, Internal-External Matrix and further validated
through the evaluative dimensions of the Grand Strategy Matrix. The Strategic Factor Analysis
revealed that according to our measurements, Citigroup matches other companies in the
industry and is improving its services. The Competitive Profile Matrix indicated that Citigroup is
performing relatively well however it needs to elevate its strategic planning to adjust the
company’s trajectory. TOWS Matrix pointed out that Citigroup is facing numerous challenges
and it includes decreasing worldwide presence, market concentration, organizational
complexity, technology issues, ethical problems, and strong competition. Matrix revealed that
The Internal-External Citigroup has a strong ability to respond to external factors and an
average to internal strength. Moreover, the analysis of the market growth and competitive
position of the company from the Grand Strategy Matrix indicated that the appropriate strategies
that must be pursued by the company fell under Quadrant (I). These findings could be attributed
to Citigroup's outstanding competitive advantage and continuing improvements in their industry.
In totality, the Summary of Strategies Matrix confirmed that the most feasible alternatives is
product development. Therefore strategy product development would best address the major
problem of the firm under study.
 V. RECOMMENDED ALTERNATIVE AND ACTION PLAN

A. QUANTITATIVE STRATEGIC PLANNING MATRIX

Market Market Product

Key Strategic
Factors ght etration elopment elopment

ng ghted ng ghted ng ghted

e e e

OPPORTUNITIES:

1. Create more effective 0.17 3 0.51 3 0.51 4 0.68

and convenient services

2. Advantage of the 0.12 3 0.36 4 0.48 2 0.24

country’s shifting growth
rate

3. Adapt or innovate 0.10 3 0.30 2 0.20 4 0.40

potentially leading new
products

4. Advancement on 0.14 1 0.14 3 0.42 4 0.56

adapting new
technology standards.

THREATS:

1. Cybersecurity threats 0.11 3 0.33 3 0.33 4 0.44

2. Continuous changes 0.08 3 0.24 4 0.32 2 0.16

and fluctuation in the
interest rate and the
unstable economy

3. Increasing rivalry 0.18 3 0.54 4 0.72 3 0.54

between big banks

4. Expansion of internet 0.10 2 0.20 3 0.30 4 0.40

 banks.

Sub-Total 1.00 2.62 3.28 3.42

STRENGTHS:

1. Largest banking 0.25 4 1.00 3 0.75 3 0.75

enterprise.

2. World’s largest credit 0.12 3 0.36 2 0.24 4 0.48

card issuer.

3. Established large 0.07 1 0.07 4 0.28 2 0.14

market in the United
States.

4. Global Consumer 0.05 3 0.15 2 0.10 4 0.20

Banking (GCB)
segment is the largest
in terms of revenues of
any other segment.

WEAKNESSES:

1. Faced various ethical 0.18 3 0.54 1 0.18 1 0.18

issues.

2. Complex organizational 0.14 3 0.42 4 0.56 3 0.42

structure that is only
applicable to the current
business strategy.

3. Lack of investment on 0.12 3 0.36 2 0.24 4 0.48

technology for more
Integration of processes

4. Scandals which heavily 0.07 3 0.21 3 0.21 1 0.07

affected Citigroup's image

Sub-Total 1.00 3.11 2.56 2.72

OVERALL TOTAL 2.00 5.73 5.84 6.14

 The Quantitative Strategic Planning Matrix results indicated that ACA Product
Development obtained the highest overall score which means that this is the best alternative
course of action that could significantly address the identified major problem. Evaluation
indicated that the company’s strengths, such as being the largest banking enterprise and being
the world’s largest credit card issuer have a positive impact on market penetration and product
development. However, weaknesses, such as having complex organizational structure and lack
of investment on technology for more integration processes pose challenges to market and
product development. Opportunities related to creating more effective and convenient services
and innovating potentially new leading products provides potential for market development,
while threats from cybersecurity and increasing rivalry between big banks may hinder market
penetration and product development. The company should leverage its strengths, address its
weaknesses, and capitalize on opportunities to mitigate threats and enhance its strategic
position in the market.

B. ACTION PLAN
Functional
Objective Strategies Time Frame Budget
Area
1. Engage customers with the help of
social media and implement
customer referral and loyalty
Increase market programs to improve customer Marketing
Marketing share and sales retention and attract new 3 years Expenses
by 10% customers. = $2,500,000
2. Enhance targeted digital marketing
campaigns to promote product and
services offerings.
1. Contracting out particular sections
of the business.
Low operation’s
2. Lowering starting salary. Investments
Finance cost and 3 Years
3. automating the process of $5,000,000
expenses
business's activities.

1. Enhance modern innovations to Production

Adopt
Productions/ reduce the amount of time needed and Operation
Technology and 3 years
Operations Expense =
Innovation for production cycles, including $850,000.00
 design and enhancing overall
operational responsiveness and
efficiency.
2. Implement technology that
facilitates flexible and agile
operations, which will help the
organization respond promptly to
shifting consumer needs and
industry environment.

1. Build a strong performance

management system that
Organization Enhance synchronizes individual objectives Operation
and Performance with company aims. 3 years expense =
Management Management 2. Develop programs for leadership $50,000,000
development to find and cultivate
organizational talent.
1. Regularly monitor and evaluate Production
Monitor and
each employee's productivity. expense,
Human Evaluate
2. Develop each employee’s strength 3 years Training
Resources Progress of
and improve their weaknesses by expense =
Employees
motivating them. $20,000,000
1. Regularly conduct market and
Research and
consumer research to continuously
Research and Develop new Development
meet market and consumer trends. 3 years
Development leading products Expense =
2. Establish a structured process for
$800,000.00
product development.
1. Enhance system software to easily
System
Adapt modern manage customer’s historical data.
Information Software
innovations on 2. Develop digital channels to 3 years
Systems Expense =
internet banking encompass web portals, mobile
$650,000.00
apps, and online platforms.
 VI. FINANCIAL PROJECTIONS
A. SALES FORECAST
Year Sales, US$
2013 76,419
2014 76,882

Forecast:
Year Sales, US$
2015 $77,347.81
2016 $77,816.43
2017 $78,287.90

B. INCOME STATEMENT FORECAST (in millions of USD)

Projected Projected Projected

2013 2014 Year Year Year
(2015) (2016) (2017)

Revenues $ 76, 419 $ 76,882 77,227 77,634 78,044

Operating Expenses 48, 408 55,015 62,606 71,197 80,967

Operating Income 28, 011 21,831 17,014 13,261 10,335

Other Expenses 8, 514 7,467 6,549 5,743 5,037

EBIT 19, 497 14,364 10,582 7,796 5,744

Interest Expense - - -

EBT 19, 497 14,364 10,582 7,796 5,744

Tax 5,867 6,864 8,030 9,395 10,992

EAT 13, 630 7,500 4,127 2,271 1,250

Other Items 43 (187) 813 -3,537 15,380

Net Income 13, 673 7,313 3,911 2,092 1,119

 C. BALANCE SHEET FORECAST
Citigroup's Balance Sheet (in millions of USD)
Historical Forecasted
December December 31, December December December
Report Date
31,2013 2014 31,2015 31,2016 31,2017
Cash $455,927.00 $402,767.00 $405,207.25 $407,662.28 $410,132.18
Accounts
25,674.00 28,419.00 28,764.41 28,938.68
Receivable 28,591.18
Total Current
481,601.00 431,186.00 433,798.43 436,426.68 439,070.86
Assets

Property, Plant
& - - - - -
Equipment
Goodwill 25,009.00 23,592.00 23,734.94 23,878.74 24,023.41
Intangibles 5,056.00 4,566.00 4,593.66 4,621.50 4,649.50
Trading account 285,928.00 296,786.00 298,584.14 300,393.17 302,213.16
Total
308,980.00 333,443.00 335,463.23 337,495.70 339,540.49
investments
Net loans 645,824.00 628,641.00 632,449.75 636,281.57 640,136.61
Other Assets 127,984.00 124,316.00 125,069.19 125,826.95 126,589.30
Total Assets 1,880,382 1,842,530 1,853,693 1,864,924 1,876,223

Current debt 262,456.00 231,773.00 233,177.24 234,590.00 236,011.31

Accounts
53,707.00 52,180.00 52,496.14 52,814.20 53,134.19
Payable
Other current
968,273.00 899,332.00 904,780.79 910,262.58 915,777.59
Liabilities
Total Current
1,284,436.00 1,183,285.00 1,190,454.17 1,197,666.78 1,204,923.09
Liabilities

Long-term debt 329,878.00 362,116.00 364,309.95 366,517.20 368,737.82

Other liabilities 59,935.00 85,084.00 85,599.50 86,118.12 86,639.88
Total Liabilities 1,674,249.00 1,630,485.00 1,640,363.62 1,650,302.10 1,660,300.79
Common Stock 31 31 31 31 31
Preferred Stock 6,738.00 10,468.00 10,531.42 10,595.23 10,659.42
Retained
111,168.00 118,201.00 118,917.14 119,637.63 120,362.48
Earnings
Treasury stock -1,658.00 -2,929.00 -2,946.75 -2,964.60 -2,982.56
Pais in capital
89,854.00 86,274.00 86,796.71 87,322.58 87,851.65
and other
Total Equity 206,133.00 212,045.00 213,329.53 214,621.84 215,921.98
Total Liabilities
1,880,382 1,842,530 1,853,693 1,864,924 1,876,223
and Equity

D. CASH FLOW FORECAST

Citigroup's Cash Flows (in millions of USD)

Historical Forecasted
2014 2015 2016 2017
Operating Activities
Revenues 76,822.00 77,227.13 77,634.39 78,043.80
Gain on significant disposals 401,660.00 416,155.17 431,173.44 446,733.70
Payments for Operations 55,051.00 62,605.61 71,196.94 80,967.26
Net Cash Flow from
Operating Activities 533,533.00 555,987.91 580,004.77 605,744.76

Investing Activities
Proceeds from securitization
450,000.00 450,000.00 450,000.00 450,000.00
of loans
Proceeds from subsidiaries
400,000.00 400,000.00 400,000.00 400,000.00
and affiliates
Purchase of investment -333,443.00 -359,842.82 -388,332.80 -419,078.44
Net Cash Flow from
Investing Activities 516,557.00 490,157.18 461,667.20 430,921.56

Financing Activities
Issuance of preferred stock 3,730.00 5,795.00 9,003.22 13,987.58
Other liabilities 85,084.00 85,599.50 86,118.12 86,639.88
 Net Cash Flow from
Financing Activities -88,814.00 -91,394.50 -95,121.34 -100,627.47

Net Increase in Cash 961,276.00 954,750.59 946,550.63 936,038.86

Cash at the Beginning
402,767.00 405,207.25 407,662.28 410,132.18
of the Year
Cash at the End of the Year 558,509.00 549,543.35 538,888.35 525,906.68

Resources
Citibank. (2015). Annual Report 2014. New York, NY: Citigroup.