Session 3 - Strategies within CIB

Question 1

On which 3 parameters are the strategies and the strategic models of CIB based on?

Answer 1

• Customers: corporations, split into mid corporates, corporates and large corporates, FIG
• Products: the seven business units of CIB
• Markets: geographic areas and/or industrial sectors

Question 2

On what does the strategy for CIB depend?

Answer 2

Both a plan by the management and the results of constraints/resources/backgrounds that characterize the enviroment of the bank like:
- historical and cultural heritage
- legal enviroment
- size of the most relevant customers
- size of the country
- disposal of financial resources
- development/political model of the country

Question 3

What are the three different strategic models for CIB?

Answer 3

• the global model
• the international model
• the local (domestic) model

Question 4

Characteristics of global model

Answer 4

Global control of C-M-P items. It means the strategy is a global offer of all the products to all the customers in whatever country. While the offer of all products means managing the seven business units, the presence in all countries and the service offer to all customers are very hard to manage. For these reasons, FIG and large corporates are the most relevant customers and the level of control of different countries is carried out via different HQs, legal entities, branches and country managers

Question 5

Pros and Cons of global strategy

Answer 5

Pros:
* Networking
* Economies of scale
* Maximization of revenues
* Research and innovation
* Diversification
Cons:
* Difficulty to find the “right” organization
* Lack of control over big countries
* Very difficult mid-corporate management
* Conflicts of interest

Question 6

Characteristics of international model

Answer 6

It is based on a global control of C-M-P items, but restricted to a “specific” geographic area
It means the strategy is a global offer of all the products to all the customers in countries belonging to a certain cluster (Europe, Asia, Latin America, etc…). FIG and large corporates are the most relevant customers, but mid-corporates and corporates are considered as well

Question 7

Pros and Cons of international strategy

Answer 7

Pros:
* Networking
* Economies of scale
* Deep knowledge of some countries/areas
* Research and innovation (potential)
* Diversification
Cons:
* Difficulty to find the “right” size
* Lack of control over global deals
* Very difficult mid-corporate, large corporate and FIG management at the same time (“stay in the middle trap”)
* Conflicts of interest

Question 8

Characteristics of local model

Answer 8

It is based on a partial control of C-M-P items, restricted to a “specific” geographic area represented by a country or small number of countries.
The strategy is a global (or, more often, a selected) offer of all the products to all the customers in a country.
The offer of all the products is very difficult because the lack of economies of scale, but the presence in a country makes the access to mid-corporates simpler.
FIG and large corporates are very difficult to target, as well as the largest deals at international/global level

Question 9

Pros and Cons of local strategy

Answer 9

Pros:
* Deep knowledge of the country
* Easy access to country mid-corporates and country FIG
Cons:
* Lack of economies of scale for some business units
* Lack of global/international network and reputation
* Lack of know-how for global/international deals