1.

Introduction
Citigroup belongs to an American multinational financial services corporation
and its headquartered is in the Manhattan, New York City. In October 9 1998,
Citigroup was established because of the $140 billion of Citicorp (the largest
American bank) and Travelers Group (an insurance company) combined
together. The idea to make the combination of the two companies is belonging
to Sanford Sandy Weill. His position as chief executive until he was
involved a lot of scandals in 2003.Chuck Prince replaced by Weill , he owned
the top job for four years until he compelled to lose his sword as the banking
giant since was swallowed up in the subprime mortgage crisis. In December
2007, Vikram Pandit took the place of as chief executive and he created a
legend to fight a losing battle to make the companys performance become
better. He has managed a steep share price fall from a peak of about $34 when
he put a little more than $3 in noon on Wall Street today.
Citigroup incurred huge losses during the global financial crisis of
2008 and it was salvaged by US government in November 2008. Afterwards,
Citigroup promulgated that in order to avoid bankruptcy of the biggest bank in
the world, United States government would take a 36% equity stake in the
company by exchange $25 billion into common stock with a US Treasury
credit line of $45 billion. Total more than $300 billion troubled assets are
assured by government and it also infused $20 billion into the company
promptly.
Citigroup has a strong foundation and it is the worlds largest financial
services network cause the company hard to fail. According to Forbes, the
company owns 375,000 employees working in more than 100 countries and
most employees occupy approximately 12,000 in Britain. In the United States,
Citigroup is currently the biggest bank holding company by assets. It also has
largest shareholders from the Middle East and Singapore. Nowadays,
Citigroup has 200 million account holders in more than 140 countries. It also
be ranked 20th in size under the Fortune 500 list. Therefore, its a totally
successful business in the world.

2. Sun Zis Art of War Theory

In order to achieve the goal of victory, as businessmen, we should know the
five factors in Sun Zis Art of War Theory well and realize the changing
conditions and circumstances. These five factors in chapter one include moral
influence, the weather, terrain, generalship, and doctrine & law. Moral
influence refers to measures and policies that align the people with the
sovereign so as to be in complete agreement and harmony with each other. In
this way, the people will be prepared to co-exist with as well as die for the
sovereign without any fear of dangers. Besides that, weather refers to the
contrasting changes of night and day, the coldness of winter and the heat of
summer, and seasonal changes. Then, terrain is a main reason to achieve
success. Terrain means the three general areas of obstacles which is distance,
dangers and encumbrance. The other factors includes generalship which is a
leader should have qualities of wisdom, trustworthiness, benevolence, courage
and discipline. If a leader has the features above, he will become the key factor
to succeed in a business. Next, doctrine & law refer to organization and control,
management systems and procedures, and the command and control structure
for the deployment of resources. So, there are the five main key to access
success in war. Thus, we need to use this five factors to access success and
wont loss in any battle of nowadays business.

3. SWOT Analysis
Strengths
1. Geographically diverse business
Geographically diverse business and revenue can protect the business from shocks in
any part of their business. Citigroup that have branches in different countries or
locations around the world would have different characteristics. Those characteristics
from different countries or locations do not always match, so, Citigroup able to lower
their risk by investing in part of the world with low conjunction. Therefore, Citigroup
can run business with lower risk. Without geographically concentrate, Citigroup may
generate higher revenue and competitive advantages.
2. Diverse financial products
Nowadays, customers typically have many different financial products and services
needs. Therefore, having diverse financial products and services would help a
company increase the competitive advantages, which will translate into revenue
growth and also profits. Citibank have offered variety types of products and services
to meet the needs of customers in order to satisfy the customers. Once customers have
been satisfied, the company would able to generate more revenue and retain the
customers. For example, the products and services that offered by Citibank such as
credit cards, loan, deposit, insurance, investment services and financial management
services.
3. The world's largest credit card issuer
The credit card business is very profitable for many companies. The companies that
issue the credit cards such as Citibank, makes a huge profit. Citibank is the worlds
largest credit card issuer in the world. Citibank offers variability of the credit with
different characteristic to fit the needs and wants of their credit card represents an
account that enlarge credit to consumers to purchase items while delaying payment
and let consumers to make payments to multiple vendors at one time. Credit cards
provide consumers line of credit and the ability to make large and small purchase
immediately. This is more convenient for consumers as reduce the risk of carrying
cash. There are several types of credit cards used by Citigroup such as Giant-Citibank

Credit Card, AirAsia-Citibank Credit Card, Shell Citibank Credit Card, Citibank
Celcom Credit Card, Citibank Gold Credit Card, Citibank Platinum Credit Card and
etc. These credit cards had brought lot of conveniences to consumers and became one
of the reason that Citigroup well-known in the world.
4. Online Services
In addition, having online services for a company is very convenient for customers
and also increases competitive advantages. Citibank has their own website to offer
online services to customers. Customers who have account in Citibank, they will have
the Citibank Online Services for free. Citibank Online is a few fast and simple steps
online. Customers able to manage their account anytime and anywhere as long as
have internet service. Customers can check account balance, transfer funds, manage
investment, pay bills and even reload the mobile prepaid without leaving home or
office. These services already brought a lot of convenience to customers to manage
their account in Citibank.
5. Security
Security is very important for a company especially bank. In terms of security,
Citibank had offered 3 levels of security to safeguard the customers financial
information. Firstly, the Strong Encryption (128-bit), when the data sent from
Citibank is reassembled and scrambled between Citibank and customers
personal computer which able to safeguard customers personal and financial
information. Secondly, the password and security question also can protect customers
information. Customers must keep their own password and security question secretly.
Lastly, Citibank provides automatic time out when there is no action for 5 minutes.
Citibank had provided strong security in order to protect their customers financial
information. Therefore, customers are more confident and relieve when using the
online banking services.

Weaknesses
1. Cases of fraud by employees
Fraud refers to the unlawful or criminal deception intended to result in personal or
financial gain. Fraud caused by employees happened in many industries especially
banking sector. Citigroup as the worldwide financial institution, the cases of fraud by
employees also happened continuously. In late February of 2014, Citigroup had
discovered some $400 million in fraudulent loans at Banamex, which prompting the
bank to decrease its profit in 2013 by $235 million, while the bad loans were made to
Mexican oil services company Oceanografia. Besides that, Citigroup found additional
fraudulent loans linked to Ocenografia and another oil services company that has not
identified publicly, caused total losses to $565 million. To reduce the losses and
control the cases of fraud, 12 employees in Mexico had been fired, including senior
executives.
2. Over dependence in the US market
Citigroup has highly dependence over the US market. Sometimes this may show low
activities and lesser kind of services and products being offered to the customers in
various countries. Dependence over US market has greatly increased since US
customers are great in number and it is simple to tap them. With dependence in the
US market, that is very risk for Citigroup. Once US market facing trouble, Citigroup
may experience losses too. To solve and prevent this problem, Citigroup has to
expand overseas and raise the proportion of Citigroups earnings coming from outside
the US.
3. Exposure to subprime mortgage market
Besides that, Citigroup exposure to subprime mortgage market also known as one of
the weaknesses for the company. Bad mortgage problems are related to the credit
market which will lead to continued pain for lenders. The subprime loans helped by
banks significantly hurt profits of the company. For example, in year 2013, Citigroup
paid $730 to settle claims that mislead investors in its bonds and preferred stock over
its exposure to subprime mortgages. This can said as the second-biggest class action
payout related to the financial crisis.

4. High attrition rates

Attrition refers to the sluggish reduction of size of a workforce by not switching
personnel lost through retirement or resignation. High attrition rates might become
problem, especially if a companys best talent is leaving for other opportunities. This
also brings problem to Citigroup. In April 2008, Citigroup retention of participants
has been high with a voluntary attrition rate of 4.2 percent. High employee attrition
means that the company has to go through the expense of hiring new employees and
training new employees. When old employees move to other firms, they may take
their know-how with them. Therefore, this may harm the company and increase the
cost.
Opportunities
1. International Expansion
Citigroup has strong international presence and expansionary, it should increase
Citigroups growth and profits. The expansion of Citigroup over abroad will bring
synergic, it is because they would have a larger customer base. Besides, it brings more
financial stability, if one country has suffered economically, other countries may not
have the same issues. Expansion could help the group to discover synergies in
marketing expenses and ideas, try to make it lower. Through experimentation, it may
work well in one market. International Expansion has a significant impact, so an
analyst should focus and pay more attention into it. Additionally, it will have a longterm positive impact on this entity and also adds to its value. This will take the shortterm positive impact on this entity, which adds to its value. This qualitative factor will
decrease the costs and it also increases the profits for this entity. International
expansion is a difficult qualitative factor to defend, so it will have been overcome in
an easy time by competing institutions.
2.

Cross Selling Opportunities

Citigroups business has many related business line, so they have the opportunity to
cross sell to consumers who need the specific services, but many different products
and services has been left. Cross selling is particularly to gain more, because it allows
a company to earn extra income from consumers and no need to specifically target
those parts of consumers with advertising or other promotional material.

3. Consolidating Industry
Consolidating markets create many acquisition targets, especially economies of scale
can be led by consolidation. The acquisition target will quickly increase their value
and plus a premium. The quick potential returns to company will accrue to small, but
the successful way is companies can consolidate the market.
4. Reduced Competition
When economic slowdown, the group reduce the competition because some
competitor became bankruptcy, it also help to increase the profit margins which firms
are avoid bankruptcy.
5. Emerging Markets
The Demand of emerging markets is helping growth and margins. New opportunities
are created by emerging markets to expand products from the developed world. All
benefit will be getting by paper products, computer services and other industries. It is
because emerging countries increase demand for industrial and agricultural products.
Threats
1.

Credit Market Crisis

The cost of borrowing of Citigroup is increased by the credit market for financial
firms. This will cause the cost increase lowers margins and decrease the free cash
flow to shareholders. As free cash flow rises, so does the value of the firm. If the cost
is high like interest rate increase, then it will cause the loan slows and further will
cause the business cash flow weakness. The capital-intensive companies are also
affected by the crisis, which need to borrow money to fund large projects or have
customers have to borrow money to afford large projects created by the company.
2. Housing Crisis
The Citigroup's assets and equity is lowered by Housing Crisis and business is harder
to do in the market. Lower equity will lower the amount of money can be loaned thus
it will limit the ability of company to generate additional revenue from loans. Pressure
on mortgages, the growth of home equity will slow.

3. Mortgage Issues

Bankruptcy would be forced by the losses on outstanding mortgage obligation and is

taken over by government. This means that equity invests to company will be worth
nothing. Citigroup faces the threats, although mortgage loans are not worth what was
they need to pay, but their value is still unknown. The uncertainty risk increases for
the group, the discount rate applied to future cash flow is increased and indirectly
decrease the value of groups stock. When the problem of uncertainty risk is settled,
stock price will increase owing to there is less risk to future cash flows. The losses of
mortgage is estimated nearly impossible, it is because mortgages were securitized
with many other mortgages. The percentage of mortgage losses is compared to
measure losses with other banks. If the banks get larger losses than normal, then FNM
will suffer disproportionately more.
4.

Sharp Rise in Interest Rates

The interest rates is controlled by the central banks, they set the level of rates. A sharp
rise in interest rates, it can most likely to stop inflation, but it also seriously damage
the profit margins of businesses that rely on raising money in order to finance their
expenses.
The rise of rates would most likely hurt the financial sector, which bank gain profit
from borrowing funds at low rates and lending out with high rates. Additionally, it
will form the bad debts.
5. Credit Card Write Offs
Citigroup faces the problem, when the situation of economic is worst, the value of
houses drops. Besides, the tendency for consumers to fail for bankruptcy and credit
card is written off will increases. Credit card write off will cause the problem of profit
decreases, it has a significant impact, so analyst should put more weight into it. It will
form a long-term negative impact on this entity, which subtracts from the entitys
value.

4. Conclusion

In the conclusion, Citigroup is an American multinational financial services

corporation. Although this company faced massive losses during 2008, Citigroup
persists and never give up to make it becomes the worlds largest financial services
company. In the Sun Zis Art of War Theory, these five factors in chapter one include
moral influence, the weather, terrain, generalship, and doctrine & law. Strengths for
Citigroup include geographically diverse business, diverse financial products, the
world's largest credit card issuer, online services and security. Citigroup faces
weaknesses contain of cases of fraud by employees, over dependence in the US
market, exposure to subprime mortgage market, high attrition rate. Opportunities
confronted by Citigroup comprise international expansion, cross selling opportunities,
consolidating industry, reduced competition and emerging market. The threats faced
by Citigroup are credit market crisis, housing crisis, mortgage issues, sharp rise in
interest rates and credit card write offs.