| dc.description.abstract | The Financial Supervisory Commission announced in March 2011 that the domestic banks have a pre-tax income of NT$183.1 billion for the year of 2010, surpassing the record of NT$155.3 billion of 2004 . The most profitable domestic bank is the Citigroup (Taiwan) (hereafter, Citigroup), with pre-tax profit of 17.8 billion. After the merger of OCBC Bank, a bank suffering losses, The the Citigroup (Taiwan) transformed into a profitable domestic bank far beyong all other domestic banks. In contast to Citigroup which owns only 66 local chanells, Taiwan Cooperative Bank (hereafter, Cooperative) owns 302 local chanells but only had are not financial holding banks. Taiwan Cooperative Bank has 302 locations, but it only has a pre-tax income of NT$ 8.8 billion.
Both Citigroup and Cooperative are not financial holding banks. What made Citigroup so profitable? In other words, what is the unique feature of its business model? This question is worthy of our research effort. The purpose of this study is two-fold. First, it tries to explore the differences in business models of both banks. Second, it attemps to analyse the value creation strategies to be derived by Cooperative facing the operating environment. This study first uses the Porter’s five forces framework to identify the opportuities and threats to the Cooperative. Next, it use the business model proposed by Alexander Osterwalder and Yves Pigneur to compare the differences between Citigroup and Cooperative. Finally, it employs the SWOT framework to derive the value creation strategies and analyses the business value creation based on the strategic assumptions.
The findings of this study are as follows. Based on its sound business model Citigroup used its superior financial knowledge base, well trained employees, advanced technology, and global financial network, collaborating with local banking institutions, to design financial solutions and banking services for its customers in an efficient way. On ther other hand, Cooperative was not able to repond to changes of banking environment and stick to its old business model. Cooperative has to reinvent its business model. Among the strategic intiatives, reorganizing the headquarter functional groups, reshuffling and integrating the operations of branch offices, upgrading the ERP system, designing new products and entering the new markets, setting up the exit scheme for incompetent employees, and designing an incentive system to keep the talented employess are the most urgent and effectiive approach to creating the enterprise value.
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