Case 4

Scale and Scope at Citigroup

(a) What are Citigroup’s major businesses? Does large scale

help it in some businesses? Does small scale hurt in others? In
what businesses has a broad range of products been Helpful?

Citigroup major businesses have been global consumer global

corporate and global investment management &private
banking Sure in some businesses large scale helps in some
business. Small-scale harm in other as they are unable to grow
and earn profit in global consumer businesses abroad range of
product such as credit cart, retail banking mortgagees and life
insurances has been helpful.

(b) Has Citigroup’s success to date reflected economies of scale

and scope or some other Kind of “Sandy magic”?

Citi group success to data reflected combination of economic of

scale and sandy magic Citigroup reports that it has the largest
consumer finance business globally. CitiFinancial is the leading
sub-prime lender in the US, and Citigroup has substantial and
growing Consumer finance businesses in Japan, Europe, and
the emerging markets. Citigroup is Also a substantial player.

(c) If economies of scale and scope are important in this

industry, why haven’t more Firms followed Citigroup’s
strategy?

Citi group has achievement economies of scale mainly through

acquisition, thereby consistently increasing firm size product
and geographic rang while the have achieved economic of scale
by diversifying in their own product and not through
acquisition.
Management is magic word and also the ability execute
acquisition may be not be present so power position in market
give power leader so many firm not followed Citi group
strategy.

(d)Do you see a clear advantage to focusing on distribution, as

Weill’s letter to Shareholders suggest? If so, how would you
follow through?

Focusing on distribution is clear advantage .distribution can be

by advertising its product through proper channels and
engaging more people in role relation manger and strong signal
to power of product and give more indication for position firm.

(e) Bottom line: Would you suggest to Sandy Weill that

Citigroup expand, contract, or simply fine-tune its range of
products and services? Be specific

Would suggest combination of fine-tuning of its product and

expanding. In addition to the scale and scope of its distribution
network, the company stressed Expense discipline, acquisitions
expertise, and risk management.

End