Question

CASE STUDY: Citigroup in China

1. How can a foreign organization such as Citibank make an initial assessment of a host-country market (such as China) in deciding how to do business there? What is involved in this process?

Answer 1

whenever any company or any institution make foreign investment ,whether portfolio investment or direct investment,it would always seek the return over the investment.citibank would assess the market condition and potential of market before establishing business in China.

1. SCOPE OF MARKET -Citibank would first analyze the market and scope of business.being a  technical giant country China is having a large number of industries which would be helpful to expand the level of banking.
2. GROWTH OPPORTUNITY - Citibank would observe the growth opportunity in the country.
3. COMPETITION AMONG THE SERVICE PROVIDERS - the most important factor would be the competition among the service provider concerned with the banking sectors.whether Citibank would be able to provide the services at the rate which their competitors are providing.
4. GOVERNMENT POLICIES - the government policies either can encourage or discourage the foreign investors.if government is providing tax benefits and incentives to foreign companies then it would be beneficial and firms would be willing to invest in those countries and contrary is also true.
5. CONSUMER PREFERENCES - proper marketing process would be conducted by the foreign company to know the preferences of the consumers and at what price they would prefer to shift their demand from existing service provider to new service providers.

therefore in this manner,firms would be able to get a clear scenario for which they would be able to make decision concerned with the investment.the above cases would be included in the process.