Citibank: Launching The Credit Card In Asia Pacifi

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Citibank: Launching the Credit Card in Asia Pacific (A) Summary Citibank is a prestigious, consumer-oriented international consumer bank. Citibank’s Asia Pacific branch, operating in 15 countries in the Asia Pacific and Middle East area, earned $69.7 million in 1988 and set the goal of earning $100 million in 1990. In order to reach it, the launch of a new product – credit cards – was considered. The idea of a credit card launching in the Asia Pacific region wasn’t supported by the New York headquarter as well as by many country managers: it would be risky since the area was relatively underdeveloped compared to the USA and Europe, it lacked from adequate infrastructures and many competitors were already operating on the market. Since Asian governments’ regulations limited the expansion of foreign banks, to improve its position in local markets Citibank already had to aim at innovation and high-quality, introducing telephone banking in Asia. On the other hand, Asia Pacific was an attractive area to international banks thanks to its rapid economic development. This factor could enable Citibank to expand its customer base to the growing middle-income households. The main competitors that Citibank would face were local banks and their franchisors Visa and Mastercard, besides the internationally growing American Express. To compete better against it, in 1981 Citibank acquired the international proprietary card payment system Diners Club International (DCI), which managed Diners Club cards in the business sector. If Citibank decided to launched the credit card, many decisions would had to be taken. It could chose between three entry strategies: acquiring an existing card portfolio from another company, doing greenfield market development (investing in direct marketing tools such as direct mail, take-ones, direct sales force and bind-ins) or combining the two

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