Luận văn thạc sĩ quản trị kinh doanh quốc tế MBA (88)

GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT CREATING BUSINESS STRATEGY IN THE PERIOD FROM 2010 TO 2020 AT VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT (HEREINAFTER REFERRED TO AS AGRIBANK) Group Number: 05 HANOI 2011 TABLE OF CONTENTS Page INTRODUCTION 1 General background, the necessity and importance of the researched topic Research purpose and applicable capacity Implementation method .2 Structure of the major exercise CHAPTER I: GENERAL ARGUMENTS ON STRATEGY CREATION 1.1 General concepts on business strategy 1.1.1 Concept of strategy: .3 1.1.2 Concept of strategy administration 1.2 Business strategy creation .3 1.2.1 Concept of business strategy creation 1.2.2 Content of business strategy creation .4 1.2.3 Process of creating the business strategy 1.2.4 Role of business strategy planning for the enterprise in general and for the Bank in particular 1.2.5 Factors which exert influence on business strategy creation CHAPTER II: ACTUAL STATE OF STRATEGY CREATION AT AGRIBANK 2.1 General introduction about AGRIBANK 2.1.1 Formation and development history of AGRIBANK .9 2.1.2 Historic mission of AGRIBANK 10 2.1.3 Organizational structure: 11 2.1.4 Function and task of Strategy Creation Department .11 2.2 Business features of AGRIBANK which exert influence on strategy creation 11 2.3 Applied strategies and operating situation of AGRIBANK in current period .12 2.3.1 Applied strategies of AGRIBANK in current period 12 2.3.2 Operating situation of AGRIBANK in current period 14 2.4 Actual state of purpose and target planning of AGRIBANK .14 2.4.1 Actual state of determination of conditions, resources to implement purposes and targets 14 2.4.2 Actual state of purpose and target planning of AGRIBANK 15 2.4.3 Actual state of the deployment of strategy planning 16 2.5 General assessment on result of business strategy implementation of AGRIBANK in 2001-2009 period 24 2.5.1 Obtained results from the implementation of business strategies 24 2.5.2 Some shortcomings in the implementation of the development strategy period 2001 – 2009 32 2.6 AGRIBANK business strategy from 2010 – 2020 33 2.6.1 Analysis of strong and weak points, oppotunities and challanges (SWOT) 33 2.6.2 AGRIBANK objective from 2010 – 2020 .34 2.6.3 AGRIBANK business strategy in the period of 2010 - 2020 .36 CHAPTER III SOLUTION, PROPOSAL AND CONCLUSION ON IMPLEMENTATION OF BUSINESS STRATEGY FOR THE PERIOD 2010 TO 2020 IN AGRIBANK: 38 3.1 Groups of solution to perform Business Stragegy for the period 2010 to 2020 in AGRIBANK 38 3.1.1 Solutions related to market, customer market share .38 3.1.2 Solutions related to organization, networks 39 3.1.3 Solutions related to finance and safety operation 40 3.1.4 Solution related to capital source 40 3.1.5 Solutions related to product development of banking services 41 3.1.6 Solutions related to risk control 42 3.1.7 Solutions related to training and developing human resorce 43 3.1.8 Solution related to information technology development .44 3.1.9 Solutions related to commercial investment activities 44 3.1.10 Solutions related to foreign exchange 44 3.1.11 Solutions related to brand development and enterprise’s culture 45 3.2 Proposal to Gevernment and State Bank .46 3.2.1 Proposal to Gevernment .46 3.2.2 Proposal to State Bank 46 CONCLUSION 48 LIST OF ABBREVIATIONS AGRIBANK PEST analysis Vietnam Bank of Agriculture and Rural Development Political, Economic, Social, and Technological analysis SWOT analysis Analysis of strengths, weaknesses, opportunities, and threats WB World Bank ADB Asian Development Bank IFAD International Fund for Agricultural Development SWIFT “Tam nong” policy Society for Worldwide Interbank Financial Telecommunication The policy of Vietnamese State and Government on solving matters of agriculture, rural area and farmer GDP Gross domestic product FDI Foreign Direct Investment ODA Official Development Assistance CPI Consumer Price Index WTO World Trade Organization AFAS ASEAN Frame Agreement on Services ASEAN Association of South East Asian Nations VND Vietnamese Dong USD US Dollar IPCAS Information Processing Communications and Security WAN Wide area network ALCO Asset Liability Committee ATM Automated Teller Machine LIST OF TABLES AND DIAGRAMS Table Contents Summary of operating result from year 2006 to year 2008: (Annual report source of AGRIBANK) Owner’s equity, total assets of commercial banks in December, 2009 Page Table 2.3 Owner’s equity of Agribank from year 2007 to year 2009 14 Table 2.4 Owner’s equity of some top banks in the world: 15 Table 2.5 GDP and CPI growth in 2001– 2009 period 17 Table 2.6 Internal analysis of AGRIBANK 22 Table 2.7 Analysis of strong and weak points of AGRIBANK 22 Table 2.8 Analysis of competitive advantages of AGRIBANK 23 Table 2.9 Results achieved by AGRIBANK in 2001 – 2009 period 24 Table 2.10 SWOT Analysis 33 Table 2.11 Financial objective and operation safety 35 Table 2.12 Objective of market, market share 36 Table 2.1 Table 2.2 Diagram Contents 14 14 Page Diagram 1.1 Basic model of strategy administration 05 Diagram 1.2 Organizational structure of AGRIBANK 11 HANOI 2010 INTRODUCTION General background, the necessity and importance of the researched topic In globalization trend, countries in general and Vietnam in particular must integrate into international market to bring into play competitive advantages Banking field plays a very important role It’s the channel which mobilizes and harmonizes capital resource of economy Furthermore, bank is the tool to stabilize financial market and manage State economy The growth of economy exerts direct and strong influence on the development of banks Especially, many business lines such as securities, electronic commerce, etc, have appeared on market Before practical requirements of the development and integration process, Vietnamese Government has had commitments to open financial market and retail market For this reason, Vietnamese commercial banks need to have changes on orientation for adaptation in the new situation In order to exist and succeed in the business environment with many changes, commercials banks must creation suitable business strategies and enhance their competitive capacity With more than 20 years of creation and maturity, Vietnam Bank of Agriculture and Rural Development (AGRIBANK) has been interested in the work of business strategy creation However, the work of business strategy creation has not brought into play all advantages of AGRIBANK and made the best of opportunities to become the most modern and strongest bank in Vietnam Role of business strategy is extremely important, Vietnamese commercial banks have not been interested in creating business strategies properly Being aware of the importance of business strategy creation, the affair that group chooses topic: Creating business strategies in the period from 2010 to 2020 at Vietnam Bank of Agriculture and Rural Development for research adapts to some extent the work of strategy creation of AGRIBANK at present Research purpose and applicable capacity - Summarize matters relating to business strategy and strategy creation - Actual state of the creating work of AGRIBANK in recent years - Proposing measures and proposals to complete the work of strategy creation of AGRIBANK in the integration process Group – Class GaMBA01 – N04 Applicabe capacity of the topic is for AGRIBANK to refer and put into practice in the work of strategy creation Implementation method The exercise bases on dialectical materialism, historical materialism, applies logical thought, uses actual data to interpret through the two main methods as follows: - Statistical method - Method of analysis – comparison, collection Structure of the major exercise Besides the preamble, conclusion, list of tables, reference documents, the exercise is divided into chapters as follows: Chapter I: General arguments on strategy creation Chapter II: Actual state of business strategy creation at AGRIBANK Chapter III: Measures, proposals for creating business strategy at AGRIBANK in 2010 – 2020 period Group – Class GaMBA01 – N04 CHAPTER I: GENERAL ARGUMENTS ON STRATEGY CREATION 1.1 General concepts on business strategy 1.1 Concept of strategy: There are many definitions about strategy, they have much or less differences depending on conception of each author In year 1962, strategy was defined by Chandler as “Determination of basic, long-term targets, purposes of enterprises and application of a chain of activities as well as distribution of necessary resources to implement this target ” In year 1980, Quinn brought out the definition as follows: “Strategy is the pattern or plan which integrates main targets, policies, and activity chain into a general which is united closely” Johnson and Scholes defined that “Strategy is the orientation and scope of an organization in a long time to win a vantage position in competition for the organization through the formatting of its resources in the changeable environment to meet demand of market and satisfy expectations of relevant parties At present, with globalization trend, companies are rapidly diversifying their activities out of national borders, from that point, global strategy seems to be the choice of coping with international business matters 1.2 Concept of strategy administration Strategy administration is a set of administrative decisions and actions which determine long-term productivity of a company Strategy administration includes successive activities: environment check (internal and external); strategy creation, strategy implementation and strategy assessment and control Thus, strategy research focuses on the supervision and assessment of chances and external threats in the background of internal strength and weak points 1.2 Business strategy creation 1.3 Concept of business strategy creation Business strategy creation is the process of confirming targets, tasks and the best method to implement those targets Target of business strategy creation is creating different methods basing on premise conditions of the formation and strategy creation opinions Group – Class GaMBA01 – N04 1.4 Content of business strategy creation 1.4.1 Purpose, target Purpose is the long-term operating motive of the organization, or the goal which the enterprise desires to achieve in far future Purpose is determinated basing on the interactive relationship between factors of environment, resources, relationship of power and virtue, capacity of administrators Target is the finish of an enterprise in a short time, is the finishing point in a short time 1.4.2 Policy Policy is the general of measures which the organization uses to affect all relevant departments and factors to effectively implement the purpose and target of the enterprise Features of policy: - Policy includes many types to affect each factor, each department of the enterprise in operating process Thus, when policies are issued, goal and unification of those policy types need to be guaranteed - Each policy has life history which means that there is a process of being born, bringing into play its effect and being rejected For this reason, when a policy is issued, a testing period is required to adjust suitably, otherwise, the policy will become a interstice which rivals can take advantage 1.4.3 Program Program is the combination of targets, policies, steps which must be implemented, resources which need to be used to implement a given purpose or target of the enterprise 1.4.4 Budget Budget is the anticipation of financial resources to guarantee that the given programs of the enterprise are implemented 1.4.5 Setting up plan Plan is the detailed report of programs Content of a program must clearly present the work which must be done, the starting time, the finishing time, the person who does the work and the means of implementation Group – Class GaMBA01 – N04 1.5 Process of creating the business strategy Diagram 1.1: Basic model of strategy administration Mission and purpose External analyis (Chances and threats) Choosing and creationing strategies Functional strategy Internal analysis (Looking for capacity resources and essence capacity) Business strategy Global strategy Company strategy Organizational structure Implementing in accordance with strategy, structure and control Control design Changing strategy (Source:Associate professor PhD Le The Gioi – PhD Nguyen Thanh Liem – MA Tran Huu Hai (2009), “Book for Strategic Administration”, Statistical Publishing House) 1.5.1 Base of Research and evaluation of strategy creation Purpose is to analyze and evaluate: - Position of the enterprise - Strong and weak points of the enterprise - Potentials which can be mobilized of the enterprise - Chances or dangers which can happen to the organization Group – Class GaMBA01 – N04  Being a partner for choice when foreign partners are in business cooperation in Vietnam market, being an Vietnamese brand name popularly known in the international community - Financial value:  Supplementing charter capital, ensuring CAR coefficient of 9%  Creating up independent, efficient and comprehensive risk administration system;  Raising profitability ratio of owners’ capital to 20% /year  Creating up price fixing mechanism based on the cost  Maintaining NPL rate less than 5%  Growth of total assets of 15%/year  Growth of credit of 15%/year  Growth of capital resources of 20-25% by 2020  Revenue of non-credit service/gross income of 15-20% by 2020 - Improving values to employees  Enhancing awareness of value of human resources  Tripling budget for training within next five years  Creating good working conditions for employees  Raising income to the employees * Equitization plans Equitized Agriseco company and financial leasing company and creating up AGRIBANK to become an leading multi-industry, multi-area, multi-property group in Vietnam in 2020 1.19.3 Specific objective to 2020 Table 2.11: Financial objective and operation safety Unit: billion VND; % Objective Own capital Capital Aquadecy Ratio (CAR) Service turnover ratio per gross net turnover Profitability ratio per capital Outstanding balance of loan investment Group – Class GaMBA01 – N04 2015 76,000 → 100,000 9% 2020 122,000 → 200,000 9% 10 – 15% 15 - 20% >15% 705,000 → 920,000 >15% 1,135,000 →1,850,000 35 Medium-term and long-term loan ratio, of which Nonprofit assets ratio Bad debt ratio Total capital resources