Research On The Competitive Strategies For China CITIC Bank

With the support from the government for direct financing, China’s capital market develops rapidly, and the market structure gets improved continuously. Equity financing and bond financing are two major methods which play an increasingly important role in the financing activities in China. Meanwhile, commercial banks’ position as the method of indirect financing is greatly compromised. It is well recognized that the year 2013 witnesses the rise of internet finance. With the rise of internet finance, many internet companies are setting foot in the finance industry, bringing great competition against current commercial banks in China and undermining the profits of them. In the meantime, new financing methods such as P2P and crowd-funding also pose direct threats towards commercial banks. To make the situation even worse, the authority is issuing the banking license to private capital, which makes the competition fiercer. Also, as the interest rate spread between the loan interest rate and the deposit interest rate is becoming narrower and narrower, commercial banks find out that it is increasing harder to earn from the conventional loaning activities.In recent years, the economic growth rate of China has been declining year by year due to the excessive production capacity of the real economy and the adjustment of the industrial structure. The non-performing loan ratio of China’s commercial banks is way too large due to the downward trend of economic growth. All in all, China’s commercial banks are faced with great pressures both from the inside factors and the outside factors.China CITIC Bank was established in 1987, and its parent company is China CITIC Group. After years of rapid development, China CITIC Bank has become a nationwide joint-stock commercial bank with great competitive power. Faced with the deteriorating external environment, the profit of China CITIC Bank has been reduced dramatically in recent years. In 2014, the net profit just grew by 2.98% against the year 2013. It is very clear that China CITIC Bank is facing great difficulties in operation. So, it is quite reasonable to choose China CITIC Bank as the research subject because of its practical significance.By analyzing the external environment facing China CITIC Bank, the author identifies the opportunities and challenges facing China CITIC Bank, and by analyzing the internal environment, the author summarizes the strengths and weaknesses of China CITIC Bank, and based on these, the author develops the competitive strategy for China CITIC Bank. After that, the author comes up with detailed implementation measures and safeguard measures.This thesis contains three major parts, first part contains Chapter 1 and Chapter 2. In this part, we introduce the research background、research objective and research methods、literature review and theoretical structure of this thesis. The research background is discussed in the first paragraph, and the research objective is to establish competitive strategies for China CITIC Bank. In the part of literature review, the author introduces the research achievements on enterprise competitive strategies of former scholars. The achievements can be categorized into industry structure theory、Core competence theory、Strategic resources theory and International competitive strategies theory. After that, the author introduces the theoretical framework of this thesis, which contains PEST model、Porter’s five forces model and SWOT model. The second part contains Chapter 3、Chapter 4 and Chapter 5, in this part, to begin with, the author reviews the development process of China’s commercial bank industry since the reform and opening up policy. Then we analyze the current situation of the bank industry from the aspects of profit and industry concentration. After that, the author uses the PEST model to analyze the macro environment facing China CITIC Bank from the aspects of political factos、economic factors、social and cultural factors and technological factors respectively. After that, the author uses the Porter’s five forces model to analyze the competition situation within the banking industry, and the five forces are the bargaining power of suppliers、 the bargaining power of buyers、the threats from potential new incomers、the threats from substitute products and threats from current competitors in the same industry. The fourth chapter is part of the internal environment analysis, the author introduces the general situation of China CITIC Bank from the aspects of development process、 shareholder structure and corporate governance. After that, we analyze the current operating situation and the human resource status of China CITIC Bank. The fifth chapter is the part of empirical analysis of competitiveness. Based on the multi-factors analysis model, the author calculated the scores of competitiveness of China CITIC Bank and other banks in China, and the author utilized the entropy evaluation method to determine the weights of each factors. In the third part, the author summarized the internal advantages/disadvantages and the external opportunities/threats of China CITIC Bank based on the analysis before. Then the author built the SWOT matrix to come up with possible competitive strategies for China CITIC Bank, and then a choice is made from these strategies. In the last part, we bring forth the application and safeguard measures from respective angles of business innovation, product management> marketing management and risk control. In the business innovation part, China CITIC Bank should establish the B2B platform based on its abundance in corporate resource, also, it should built the B2C platform, ensuring the variety and quality of its products, China CITIC Bank should acquire a third-party payment company. In the product management part, it should develop different products targeting at different groups of customers based on the big data technologies. In the marketing management part, China CITIC Bank should perfect its training system for marketing personnel, and should improve their contacts with clients. In the risk control part, China CITIC Bank should set different credit policies for different industries, and should set strict rules for internet finance products. Also, China CITIC Bank should build personal credit department to improve efficiency.