Citibank Case Analysis

Kristin Howell

Bus 400 Sec A

Dr. Li

30 October 2007

“Citibank Case Analysis”

Introduction:

Through reading the article titled “Citibank: Performance Evaluation” and performing my own in-depth case analysis, I was able to analyze the issues Citibank California was confronted with and determine possible solutions to help run their business more successfully. Although Citibank is a well-run corporation that made necessary improvements in an effort to gain a competitive advantage over their main competitors, Bank of America and Wells Fargo, a main area that needs improvement is clear: customer satisfaction. As Frits Seegers, President of Citibank California, identified, without improving customer satisfaction, the extreme success that Citibank was experiencing through financial profits, would be extremely temporary. As a result of reading this article and through concepts learned in class and through the text, I have developed some recommendations that may help Citibank in the future.

History:

James McGaran was the manager of the most important of the 31 Los Angeles area Citibank locations and as a result, his Performance Review was perhaps the most important for the expected success of Citibank California. Located in the financial district, the branch had a staff of 15 people, revenues of $6 million, and $4.3 million in profit margin. With a diverse customer base, this specific branch reached many different business people as well the typical home banker. Competition for the branch was extremely intense with competitors branches within a block of McGaran’s branch.

McGaran’s performance reviews exceeded expectation every single year and he delivered impressive financial statistics in yearly reviews. However, when the company implemented a New Performance Scorecard that measured non-financial statistics for each branch, McGaran’s performance was sub-par thus exposing a need for improvement within the customer service department.

Citibank Strategy:

Citibank was a niche competitor in the California banking market with only 80 branches compared to the 400 of the biggest competitor. In other words, “Citibank’s strategy in California was to build a profitable franchise by providing relationship banking combined with a high level of service to its customers” (p. 76). Like most businesses, customers’ expectations rose with their net worth, in addition to providing a greater profit margin for the company itself. While financial measures typically were the way Citibank measured success in the past, they recognized a need to measure customer service as well and thus developed a Performance Scorecard. The six different types of measures the Performance Scorecard evaluated were: financial measures, strategy implementation, customer satisfaction, control, people, and standards. By developing this Performance Scorecard, Citibank believed they could better analyze where each branch needed specific improvements and where each branch was excelling. Citibank felt it was necessary to update the previous evaluations to include non-financial measures because