Citibank: Launching the credit card in Asia Pacific
Country entry strategy

Objectives of this case ...

 To understand market evaluation, target market selection, and product positioning issues in services operations.  To appreciate globalization/country entry issues in financial products.  To understand the underlying economics of customer acquisition and retention.

Key Strategic Issues
Should Citibank launch the card product ? Why ? Why not ? Given the upscale customer base , how should Citibank position its card, if it decides to launch it ? Which countries should Citibank enter first? Which countries should it avoid?

Few More Operational Issues
How should Rana Talwar convince his country managers and H.Q to
to support 250k customers. Incremental investments of $15mio.to support additional 250k customers.

Cumulative Contribution / Break Even Analysis

At 250,000 At 500,000 At 750,000 At 1 million Customers Customers Customers Customers

At 1.25 Mio Customers

Avg. Revenue Per customer (Table B)
Less :

$ 162.65 $ 162.65 $ 162.65 $ 162.65

$ 162.65

Avg. Direct Cost . Customer Avg. Acquisition Cost / Customer

$ 25.00 $ 60.00

$ 20.00 $ 60.00

$ 15.00 $ 60.00

$ 10.00 $ 60.00

$ 7.00 $ 60.00

Total Direct Costs
Contribution / New Customers

$ 85.00

$ 80.00

$ 75.00

$ 70.00

$ 67.00

$ 77.65

$ 82.65

$ 87.65

$ 92.65

$ 95.65

Contribution - Existing Customers

$ 142.65 $ 147.65 $ 152.65

$ 155.65

Cumulative Contribution / Break Even Analysis
New Customers Existing Customers New Customer Contribution ($Mio)

At 250,000 At 500,000 At 750,000 At 1 million Customers Customers Customers Customers 250,000 250,000 250,000 250,000
250,000 500,000 750,000

At 1.25 Mio Customers 250,000
1,000,000

19.413

20.663

21.913

23.162

23.912

Existing Customer Contribution ($Mio) --Total Contribution($Mio) Fixed Cost :