Citigroup: 'Internet banking' is a valubale but not a rare resource

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In today’s competitive world, and in particular in the banking business industry, banks are trying to deliver the best services to their customers so that they don’t stay way behind their competitors. Just recently, Citigroup bank, the US largest bank, has launched Internet bank hoping to better compete with such rivals as HSBC. But is this physical technology (internet banking) valuable? Is it rare compared to what competitors have? Is it difficult to imitate? And is Citigroup organized to exploit the full competitive potential of its internet banking technology? The following paragraphs answer these questions.

First, to answer whether the internet banking technology (resource) valuable or not, we should ask ourselves whether this resource enabling Citigroup to respond to the environmental threats or opportunities, as Barney refers to it as the ‘question of value’. Indeed, this resource is going to enable Citigroup to respond to the external threats wherein HSBC, which is one of the leading banks, has already this technology employed in its business. And therefore, by launching this internet bank service, Citigroup is trying to catch up and thus respond to those threats. At the same time, the launching of the internet bank enables Citigroup respond to opportunities in such a way that online banking is viewed “as both a source of new customers and a means to increase business with existing customers who prefer to bank through more than one channel”.

Moving on to the question of rareness, now that we have known that the internet banking resource is a valuable one, we need to ask how many competing firms already possess this internet banking valuable resource? Well to my limited knowledge, banks such as HSBC, Credit Suiss, and many others have already launched the online banking technology in their businesses and thus this makes the valuable resource not rare or in other words a common one.

In addition, since the online banking resource is a valuable but a common one, we can’t further say that this resource is difficult to imitate. Instead, we can say that Citigroup is not a strategic innovator because they are not in a position that they are able to conceive of an engage in strategies that other banks could not conceive of. In other words, Citigroup didn’t really gain the first mover advantages. As a result, Citigroup is not that organized to exploit the full competitive potential of its internet banking technology.

To conclude, Barney explains clearly that if a particular resource (or capability) is controlled by many competitors, then that resource is unlikely to be a source of competitive advantage. Instead, valuable but common resources and capabilities are sources of competitive parity. So, this valuable but common internet banking resource can help ensure Citigroup’s survival when they are exploited to create competitive parity in the banking industry.