Citi-Bank E-Business Strategy - Coursework Example

Citi-Bank E-Business Strategy & Projects Name: Roll No: Class: University: January 23, 2008 University: E-commerce Setting business on internet is known as E-commerce that facilitates visitors to access business web-site and probe into details of catalog of products online. A visitor desire to buy anything has the option to add it to their practical shopping basket. Items included I the shopping basket can be deleted or added in case a customer is ready to checkout requesting a business their address and method of payment usually through credit card. Once all necessary information has been added all a customer is to do to wait for the delivery. E-commerce is not just about online retailing or stores, it deals everything and anything related to money. Normally a payment is made via credit, visa cash or check. Banks all over the world are providing their customer accessibility to their account at bank through web. It is expected that web will penetrate deep into the affairs of the life of a common man as an order and reservation for move at the domestic video store can even be made through online and the titles can also be browsed through surfing. In short it can be said that through implementing e-business a person can save money and time, are online seven days a week, twenty four hours a day. E-commerce is the transformation of prime business process via usage of internet technologies. Every sphere of life is being altered by Web. In fact every area is experiencing a significant and swift change and business is no exception. Businesses commenced to accomplish real value of business as they integrate Internet technology in the hub of their processes. Presently companies whether small or large in size are utilizing Web for the purpose of communicating with their stake holders to remain linked with their data-systems and managing commerce. This is ‘e-commerce’ in which the reliability and strength of convention information technology coordinate with Web. (5. Michales E. Harvard Business School Press, Boston, 2001) New delicate combination of Web with information technology model mingles the simplicity; standards and connectivity of core processes with Internet are the foundation of business. People conduct business in extra expressive manner as the fresh killer apps are much more interactive, and business is intensive. The significant element of an e-business is an organization that can become accustomed to continuous and constant change. For managing transitions in a smooth manner two significant ideas are worth remembering: Start easy and simple but ensure planning to develop quickly Establish on what a business owns presently (7. Winter M. ABA Banking Journal, 2005) E-commerce is not about re-creation or re-inventing the wheel of any business. It in fact is about reformation of present business processes that is able to improve and enhance operating efficiencies, that in turn is able to strengthen the worth being provided by the business to customers. This worth cannot be produced and generated through any other means. As such it is a value that can provide a serious benefit to the business over competition. (3. Johnson G. Prentice Hall, Essex, 2005) Web fledgling or hatchling business professionals, exploiting entire benefits from opportunities e-commerce is able to present need planning. Experts in E-commerce have deep awareness and understanding of business requirements. They have the necessary skills and resources for implementing, designing and sustaining extra-quality solutions. They are able to tailor in delivering the potential and promise of e-business. (2. Burno M. US Banker 28, 2001) Examples of E-business E-commerce is performing affairs of business in Internet. This does not comprise only buying and selling but includes providing services to consumers and collaborating with the partners in business. E-business term was first used by IBM. E-business can be classified in two categories: Business to consumer or B2C Business to business B2B Most of the customers are familiarized with business to consumer or B2C category and most of the Business to consumer websites is managed as if a consumer is in store. Business to consumer sites facilitates a consumer to buy shop and arrange for the articles that are shipped to them later on. A business to business is a site where selling, partnering and buying is managed between two or more businesses. Some business to business or B2B supports other businesses for improving procedures and policies, customer service and helps a variety of operational complexities. B2B are mostly used for inter-industry commerce like marketing of equipment ad raw materials to other businesses. (3. Johnson G. Prentice Hall, Essex, 2005) Another kind of e-commerce is consumer to consumer business or C2C business in which consumers can sell directly to other consumers such as an auction or garage sale. A consumer can market personal belongings and related articles selling them to different consumers online. Many technologies required to be existed for providing help to e-commerce world. E-commerce is at times broken down into pipes and open internet. (1. Allen C. Wiley & sons, New York, 2001) In case a user wish to connect to the web server of a company, the user can work via an ISP or internet service provider that transmits a request for some files, the server in turn retrieves such files and sends them back to the user who has requested for them. As such the users are helped by getting what is required and add it to their shopping cart and ultimately make a purchase. (7. Winter M. ABA Banking Journal, 2005) Concept of Consumer Study of consumer can help organization improve their strategies in the area of marketing by understanding particular issues like consumer’s psychology as the way a consumer reasons, feel, thing and select among different alternatives. Psychology of consumer can be understood also as how he/she is influenced by culture, family, media and signs etc. Organizations can perform better if they are cognizant about the behavior and attitude of consumer in the course of shopping or making different kinds of marketing decisions. Restraints about the knowledge of consumer or skills of information processing have an impact on the decisions and outcome of marketing. A firm needs to understand the reasons for consumer motivation and formulate decision strategies that differ among products to the degree of importance that they have for the consumers. Markets can then improve their marketing strategies and campaigns to access consumers more effectively. (1. Allen C. Wiley & sons, New York, 2001) Consumer and E-Commerce It is necessary to study business to consumer or B2C as every user of Internet is a prospect customer and business to consumer or B2C presents many benefits. the dot.coms can support entrepreneurial experimentation and ideas, generating numerous innovations that spread to other kinds of e-commerce. It is also essential to study such market realities that are surfacing along with the expectations of customer for accomplishment of aims and objectives. The first step in the course of starting new bricks and mortar retail shop is to buy or lease essential real estate along with selecting location is a source to success. Subsequently merchant purchase racks, display tables, checkout counters, install credit card readers and cash register. Next step is the hiring and then training sales staff. On the other hand for an e-business retail set up the location is immaterial as Internet facilitates a web site to connect to any other site despite the fact that such site is located in any part of the world. Unlike a physical store racks, expensive displays or checkout counters are not required all together. In order to conduct e-commerce transaction a customer must buy or lease a computer that is loaded with an operating system, a modem, a browser, communication software and a need for paying fees per month to an Internet service provider. (3. Johnson G. Prentice Hall, Essex, 2005) For attracting a potential customer a hook can be used such as presenting an exclusive product that is called a hook. Another example of hook is to position the site of e-business as price leader among specific market niche. Further examples of hook comprise convenience, help desks, FAQ, account and order status, online help, call centers and targeted e-mails. As such these significant objectives of business to consumers or B2C tools provide a swift service to consumer because any delay could result in permanently loosing a sales opportunity. Branding is also significant in a business to consumer site as a well-managed brand name entails steadiness and reduces the risk of fraud significantly. It also entails that a famous business lacking online presence is obsolete and outdated. Strategy of bricks and clicks present a fabulous competitive edge to recognize brands with an established corporeal presence. Brands having a sound physical presence involve stability and as such a consumer is always in a position for returning a product that is purchased online to a particular physical location if required. (1.Allen C. Wiley & sons, New York,2001) The most apparent manner in which a consumer centered B2C e-business organization can find a prospective customer is advertising. Messages sent through e-mail to targeted as well as untargeted mail list are treated somewhat as inexpensive option. Unfortunately an e-mail that is untargeted can degenerate into spam. For prospective customers the most general way is through a search engine. An e-business firm must use particular keywords like prospective customer can easily find their sites and buy products of a firm. (4. Kranzley A.D. Thomson Financial, Inc, 2001) Current trends and e-business The foremost question is ‘Why e-commerce’? Some of the key points mentioned below can provide an insight into this burning question of the day. value Network Operating Cost decrease Less intermediaries More processes outsourced Intangible Assets Customization and Web-based flow of work E- Business is the process aimed to conduct and perform activities of business using internet while e-commerce is the process of buying and selling products including goods and services on Internet. It is a system for exchanging securely the information in a company globally that comprises a methodology to publish the prime public matters in public for tracking concluded keys. (6. Pennathur A.K. Journal of Banking and Finance. 2006) Advantages of E-commerce It expands market access for businesses globally. Improve convenience and choice for consumers. Open new avenues for business. Increase competition and decrease prices. Creates new and innovative market efficiencies. Modernize and rationalize operations reducing related costs. (5. Michales E. Harvard Business School Press, Boston, 2001) An e-commerce transaction primarily via desktop computers and mostly wirelessly using web-enabled devices that is handheld. Another latest trend is being surfaced in connection with e-commerce is \m-commerce’ or m-commerce that means an e-commerce that happens by using mobiles. E-commerce is in fact a unique form of commerce that facilitates users with similar software networking connecting everybody’s hard disk and transfer files directly. A consumer can easily make payment to other consumer in C2C for copying a file e-bay or online auction or music sharing etc. Likewise the concept of ‘c-commerce is the optimization of distribution channels and supply for the purpose of capitalizing upon worldwide economy and understanding techniques as to how a new technology can be used effectively and in an cost effective manner. Idea of c-commerce is a modern business equation that has in fact re-defined the manner in which people work in the present worldwide marketplace. C-commerce is the arrangement of electronically-permitted mutually coordinated interactions among firms, its trading partners, suppliers, customers and employees. C-commerce empowers Web in the creation and then sustaining an interactive community of employees, suppliers, trading partners and customer in a business. Real time connectivity of internet enables data, human resources, intellectual capital and process once considered internally sharing and using by the joint community. (4. Kranzley A.D. Thomson Financial, Inc, 2001) Citibank Citibank is among one of the main international banks of the world. It was founded in the year 1812 as City Bank of New York. Citibank has been developed into one of the largest banking companies worldwide from being a small bank that existed out of New York. It is famous as largest in corporate and consumer banking. Reports of the year 2007 declare Citibank as the top bank by holding in United States. (8. www.citibank.com) Citibank was founded in the year 1812 by a group of merchants of New York. The first head of Citibank was Samuel Osgood who in fact was the first postmaster General of United States. Subsequently the management and ownership of Citibank was taken over by Moses Taylor a protégé of John Jacob Astor who is among one of the legends of the nineteenth century. Citibank operated and functioned as a center of treasury and finance in the time of Taylor proved a foundation for the exaggerated business empire of Taylor. (2. Burno M. US Banker 28, 2001) In the year 1865 Citibank became a part of United States national banking system and changed the name to The National City Bank of New York. It was considered as one of the largest US bank by the year 1894. Three years later it became first every U.S bank for commencing foreign department. Citi cards being integral part of global operations of Citibank has more than two hundred million accounts of customers in almost hundred world wide countries. Operations of Citibank are divided into three parts: Citi card being an integral segment of Citibank worldwide has three significant business groups. Global Consumer Investment banking and corporate banking. The worldwide wealth management (8. www.citibank.com) Global consumer Group of Citibank introduces product offerings for consumers in the entire world. Some of the products comprise credit cards, insurance, banking services and loans. Investment and corporate banking group provides transaction and advisory services to institutions, government and corporate clients while the global wealth management group is responsible for providing money management service aimed at serving private and institutional clients through globally recognized brands such as Smith Barney. Presently customers of Citibank include Citi cards customer benefits from worldwide strength and legacy that remains the focal point of their service, legacy and leadership. One of the most famous Citibank credit cards today is the Master Card with distinctive features. Operations of Citibank also include asset management and securities brokerage. E-business of Citibank is also a worldwide provider of coordinated treasury, cash management, e-billing and solutions providing to supplier finance allowing their customers to re-engineer their payables and collection processes, integrate tightly supply chain and organize working capital in an effective manner. E-business of Citibank provides easy access to full range of Citigroup’s complete range of products transacting over US$ 1 trillion per day in ninety local markets. (8. www.citibank.com) E-Business strategies Citibank E-business Banks now-a-days are cognizant of both opportunity and threat that is presented by Internet. Banks are applying a thoughtful and detailed approach to the concept of Internet as to ensure business success. The prime motives of banks in launching and beginning online services is to support and supply their customers with a responsive, alternative and less expensive choice. As options are away from customers at a click they have more authority and control as compared with the traditional banking. Customers now anticipate real-time solutions and superior usability. They long for personal attention and a superior quality customized product. Concentration of e-business is ‘customer’. Conversely the business structure and technology pursue form of the worth banks intend to provide to their customers. E-business is dependent on the growth of new strategies designed by businesses that are purely based on networks. The world has been transformed and become inter-connected through computers and telecommunication computers. These offer flexible, swift and cost-effective methods of business. (8. www.citibank.com) Economies of the world are driven by establishing unexpected opportunities for companies, countries and individuals globally. Leaders of the Banks worldwide particularly banks have identified the strategic role that is being played in the ability of company to compete and survive in the future. For becoming more competitive in the economy of Internet, organizations require to connect to Internet force successfully. Citibank has chosen differentiation strategy aiming at home banking service. In this context they offer a high-class option of web banking with relevant and powerful functionalities in which their customers can have an easy and simple access for operating their bank account on Internet with all confidence. Mission of Citibank is to remain as a leader in exclusive e-financial services and sustain their position of being a premier and trusted e-business enabler. The e-business strategy of Citibank aims at extending the network and further expanding the situation of branches. For the purpose of saving operating costs Citibank is motivating customers to divert their banking transaction from phone banking to the Internet. Citi online is among the lowest cost per interaction when compared with branch banking, phone banking or ATM. It is contributing significantly as an integral element of strategic cost management plans being implemented by the bank. (8. www.citibank.com) E-banking of Citibank is aimed at enhancing brand image in customers’ minds and the views by remaining innovative in the field of product development and technology. Through e-banking Citibank creates an extra arm for enhancing customer relationships via cross selling and acquiring new customers. Providing solutions through internet Citibank has sustained its liveliness and competitive advantage, acquiring substantial advantages from them. It is pertinent to mention that customer in the era of internet economy are more cognizant and their overall expectations are constantly increasing as such the capability for responding to the demands of customers and delivering ultimately value is most crucial. (8. www.citibank.com) E-Business Strategies of Citibank and Support of E-commerce to Improve Business In the today’s world products are seen as more commoditized and differences in pricing slimmer, the huge differentiator presently is delivering value to customers. Customers-focused companies require an integrated, well-planned business strategy that comprises not only catering of customer needs but also meeting objectives set by corporate business. E-business has opened new avenues for unprecedented opportunities for organizations to establish sales and improve revenue streams by enhancing geographical scope, improving procurement, decreasing operating costs and supply chain efficiency. Citibank possess business philosophy that is based on technological benefits, has searched to apply state-of-the-are technology in an endeavor to deliver exclusive value to exceedingly mobile customer foundation. Bank is at the vanguard of e-business development and using actively a broad spectrum of technologies for designing and ultimately developing products serving remote consumers in a better manner, improving decision making by managers and decreasing operating costs. Citibank in order to address changing needs of customers in the start of millennium founded a committee ‘Internet Operation Group’ in the year 2000 that was responsible for making an interaction among e-Citi and business units of bank in the quest to explore opportunities of Internet. In the same year Citigroup entered the second phase by creating two units with the objective of opening internet to all corporate banking activities and consumers; e-business and e-customer. Again in same year e-Asset management and e-capital markets were added. The main intention of these unites was to complement e-Citi. (8. www.citibank.com) Objective of Citibank via its e-business solutions is to provide local, global and regional customers the opportunity for taking full benefits of ecommerce. The strategy branded as ‘connect, transform & extend’ was aimed to deliver vision. The main points of e-business strategy of Citibank are: Connect: Web-enable prime services for connecting with entire portfolio of customers Transform: Drawing entire sketch of capabilities of Citibank to deliver. Extend: Access and expand to new customers, new customers. The main elements of e-business strategy of Citibank aimed at improving business are; implant Citibank as one of the most trusted brand among communities; establish a network with making alliances with strategic partners; provide support to customers in order to serve them better; provide web-enable prime services; create a general awareness and advance information-based e-services; and implement slogan ‘e-us’. E-Business Projects E-business technology for improving business E-business of Citibank commenced to manage relationships of customers domestically at the regional or country level. As such new structure of Citigroup involved conventional business units in drawing internet strategies and establishing committees for synthesis and coordination, a concept similar to other banks. It has resulted in the usage of manifold processes and support staff functioning tremendous overwhelming activities. Citibank had developed successfully internet software for their corporate customers setting up business to business or B2B e-commerce exchange. This reveals the preceding days of internet in which banks managed e-business as distinctive and separate projects. Changing business paradigms and market demands have cultivated the desire to view consumer or customer relationship on a worldwide basis for understanding entire elements of relationship in order to ensure resources are adequately aligned, customer satisfaction is achieved and shareholder are satisfied with their demanded value. (6. Pennathur A.K. Journal of Banking and Finance. 2006) E-Business Technology Projects for Improving Business Volatile and Unprecedented E-business Growth: Citibank should make investments in e-security as it is becoming more complex for considering e-security as one of the main threats for Banks in particular. E-security has been positioned as the top issue when respondents in some research were inquired about their priority in business challenges. Bank should also take into account the competitors and react to all developments in internet industry. It is expected that with the support of swift growth, Citibank will not have any complexity in acquiring new customers and ultimately expanding their horizon to the emerging markets. As such competition is not anticipated as a large problem depending on the element of aggressiveness in the overall strategy of Citibank. The business to business will certainly hike further as the companies have started developing and keen to utilize e-products, they are likely to alter new cost-saving attribute. Investment by Citibank in business to business or B2B is important during growth period, as new emerging standards are still unexplored and underdeveloped. It would by interesting to observe the nature of development that will take place and responding to them. New and innovative e-banking products are required to be developed and presented most probably through internet channel to the customers of Citibank. Slow-Paced E-Business: Although it is necessary to invest in e-security as it is becoming a major element of threat to business particularly in those areas where economy is growing at a swift pace but due to the slow progress and development of e-business most probably the customers will be reluctant for using e-products. In the case of competition as other banks are struggling in their e-business while other businesses are progressing they will be developing new and innovative products. They will also be investing more money in marketing activities, emphasizing on lower prices and investing in their sales team. As such it is necessary to observe and monitor competition if such scenario builds. Recession and E-business: In the stage of recession coupled with slow pace of e-business Citibank should cut their costs as it is most unlikely to acquire new customers and watch growth in revenue from present clients. But this cut in cost should aim to save a small quantity of costs. Citibank should sustain realistic level of security for the customers. Competition is also significant. Major competitors like ABN-Amro, Deutsche Bank and HSBC etc are likely to decrease their prices, searching for new and innovative solutions and probing profitable areas. Citibank should also be responsive in this area by undertaking alike actions trying to retain present clientele. (6. Pennathur A.K. Journal of Banking and Finance. 2006) Clients of Citibank will not try to explore new markets in the scenario of economic slowdown globally to the level that it could bring some extra revenues. Timing will be ripe for Citibank to acquire domestic banks in emerging market in the course of trouble time due to under-pricing. The bank should cut their investment in e-banking as customers will be more reluctant in adopting it. When the global economy will revert to growth obtained technology might be obsolete. As the economic scenario will improve the prices of IT will fall. (2. Burno M. US Banker 28, 2001) It will be a good time for the employees of Citibank to acquire some additional knowledge in consultancy services and train them in providing solutions of cash management. Business to business will also be slower as banks will be cutting down their costs, not working on new technological developments. With the uncooperative attitudes of other market players Citibank can have problems in the creating of standards. Conversely it will be a fine alternative for Citibank for establishing new standards of e-banking. References 1. Allen C. One-to-One Web Marketing: Build a relationship Marketing strategy one customer at a time, (Wiley & sons, New York.,2001) 2. Burno M. Who’s Using Whom on the internet? Internet Banking. (US Banker 28, 2001) 3. Johnson G. Exploring Corporate Strategy. (Prentice Hall, Essex, 2005) 4. Kranzley A.D. Lifestules Fuel Internet Banking in: Credit Card Management.(Thomson Financial, Inc, 2001) 5. Michales E. The war for Talent, (Harvard Business School Press, Boston, 2001) 6. Pennathur A.K. Clicks and bricks. E-Risk Management for banks in the age of the internet. (Journal of Banking and Finance. 2006) 7. Winter M. Straight Talk about Internet Banking, (ABA Banking Journal, 2005) 8. www.citibank.com Read More