Citigroup in Post Wto

Citigroup is an excellent example of an organization that has displayed environmental adaptability. At the end of 2001, Citigroup chose to expand its operations into China; and the environment in China is unique. As a learning team we have reviewed the case "Citigroup in Post-WTO China". We have taken sides on whether Citigroup has displayed adaptability in its attempt to expand operations in China. The main arguments of each side of the debate are discussed along with an agreement as to which side we felt had a stronger argument and why.

Arguments that support that Citigroup has displayed adaptability

* Citibank was one of the first foreign firms that had obtained licenses to conduct business in China. In early 2002, Citibank became the first foreign bank to be given approval for foreign currency dealings with Chinese customers. Citibank displayed adaptability by taking a risk and being a leader in a new market instead of waiting for another big bank to test the waters first.

* Because of its large size, Citibank was able to comply with China's WTO requirements of having a minimum of $72 million in operating capital in order to do local retail business. Meeting this financial requirement put Citibank at a competitive advantage compared to smaller banks.

* Citibank was able to capitalize on its long history of emerging market expertise. In 2001, Citibank built more than $2.8 billion in core income from emerging markets. Citibank was much more international in scope than its international competitors. Citibank had a distinct competitive advantage over both domestic and foreign banks.