Citibank Card Product Group

Abstract

Jim Bailey, CEO of Citibank's Credit Card Products group, must decide where to take his organization, which is confronted by significant market change, including AT&T entry into the credit card industry. The case starts off with Bailey assessing the merits of one proposal provided by his top managers that counterattacks the AT&T entry. The remainder of the case introduces a broad range of industry issues facing Bailey and discusses the competencies (many of which are information technology based) of the credit card group. The case is designed to teach how an organization can assess different strategic options when confronted with rapid market change by applying a potent array of core competencies designed with both flexibility and efficiency in mind.

Excerpt

UVA-BP-0318

CITIBANK CARD PRODUCT GROUP

In early 1990, Jim Bailey, chief executive officer of Citibank's U.S. Card Product Group (CPG), sat at his desk overlooking the Manhattan skyline thinking about how to continue CPG's recent success. Citibank was tied with American Express as the largest issuer of multipurpose cards in the world, and Citibank's estimated $ 600 million in after-tax credit card profits were greater than American Express' estimated $ 500-$ 550 million in card-related earnings.

Bailey realized that CPG couldn't rest on its laurels, however. The credit card industry was changing, and recent events suggested that the change was of greater magnitude and more unpredictable than he had suspected: no CEO wants to wake up one morning and find that Ma Bell is a direct competitor. Bailey picked up the proposal aimed at responding to AT&T's recent entry into the credit card industry.

Proposal to Counter AT&T

The proposal before Bailey was a bold one, crafted by some of his finest managers. It was simple, straightforward, and to the point. The “Executive Summary of Proposed Actions” read:

. . .

Keywords: competitive dynamics industry evolution market analysis strategy formulation technolgy management