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GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT METHODS TO IMPLEMENT BUSINESS STRATEGY IN THE PERIOD OF 2010 - 2015 OF GLOBAL PETRO JOINT STOCK COMMERCIAL BANK Group No.11 - Students’ names Duong Thi Bich Lien Nguyen Manh Hung (04/03/1976) Nguyen Hong Khuong Mai Thi Thuy Huong Class: GaMBA01.X01 HANOI, 2010 ACKNOWLEDGEMENT Members of group 11 of class GaMBA01.X01 would like to make the commitment: Selecting the Global Petrol Commercial Joint Stock Bank (GPBank) as the research object of this assessment has been approved by the Leadership of the Bank Class: GaMBA01.X01 GROUP 11 This assessment is completed by the efforts of group members through the realistic research process and application of the argument issues basing on the reference of some quoted documents This assessment has not been used to submit for any research or training programs We agree to have the full responsibility if there are the disputes about the copyright relating to the content of this assessment Hanoi, July 22nd 2010 GROUP OF AUTHORS DUONG THI BICH LIEN NGUYEN MANH HUNG (04/03/1976) NGUYEN HONG KHUONG MAI THI THUY HUONG Class: GaMBA01.X01 GROUP 11 CONFIRMATION OF GLOBAL PETROL COMMERCIAL JOINT STOCK BANK (GPBANK) We, Global Petrol Commercial Joint Stock Bank (GPBank), confirm that we agree the research group including the members mentioned below to be allowed to get access to the internal documents, data as well as contact with the operation fact to study about the strategic orientations of GPBank, serving the research purpose of the group to complete the MBA course: Duong Thi Bich Lien Nguyen Manh Hung Nguyen Hong Khuong Mai Thi Thuy Huong Hanoi, July 22nd 2010 GENERAL DIRECTOR (Signed) Class: GaMBA01.X01 GROUP 11 TABLE OF CONTENTS ACKNOWLEDGEMENT CONFIRMATION OF GLOBAL PETROL COMMERCIAL JOINT STOCK BANK (GPBANK) LIST OF ABBREVIATIONS LIST OF TABLES, FIGURES, GRAPHS FORWORDS 10 CHAPTER 1: OVERVIEW ON THEORIOTICAL ISSUES ON MANAGEMENT STRATEGY OF ONE ORGANIZATION 13 1.1 Strategy and Management strategy .13 1.1.1 Concept on Strategy and Management strategy : .13 1.1.2 The role of Business Strategy and necessity of Management strategy in the organization 14 1.1.2.1 The role of business strategy 14 1.1.2.2 The necessity of Management strategy 15 1.2 Duty of management strategy 15 1.3 Management strategy process 16 1.4 Important factors in Management strategy process 17 1.4.1 Identification of Mission; Vision; Core value 17 1.4.1.1 Mission 17 1.4.1.2 Vision .17 1.4.1.3 Core value 18 1.4.2 Analyzing internal and external environment 18 1.4.2.1 Analyzing internal environment 18 (Excerpted: Doan Thi Hong Van, “Strategic Management”, Statitics House Publishing) 21 1.4.2.2 Analyzing external environment 21 1.4.3 Tools for construction and choosing strategy .28 1.4.3.1 Strong point - weak point - opportunities - challenges (Analyze SWOT) 28 Class: GaMBA01.X01 GROUP 11 1.4.3.2 Internal and External Matrix (I-E Matrix) 30 1.4.4 Select strategy 31 1.4.4.1 Strategy at company level 31 1.4.4.2 Strategy at business unit level .33 1.4.5 Deployment and Evaluation 34 1.4.5.1 Establishment of organization structure .34 1.4.5.2 Establishment of controlling system .34 1.4.6 Establishment of implementation tinier .34 CHAPTER 2: REAL STATUS OF BUSINESS STRATEGY OF GLOBAL PETROLEUM .36 COMMERICAL JOINT STOCK BANK 36 2.1 Introduction of global petrol commercial joint stock bank 36 2.1.1 General information 36 2.1.2 Organization structure of GPBank 36 2.1.3 Some targets for operation of 2008, 2009 and first months of 2010 38 2.1.4 General evaluation on of GPBank 38 2.2 Analyze & evaluate on current business strategy of GP Bank 39 2.2.1 Commitment for current strategy of GPBank 39 2.2.1.1 Mission 40 2.2.1.2 Vision .40 2.2.1.3 Core value 40 2.2.2 Analyze internal environment of GP Bank: .40 2.2.2.1 Situation of human resource 40 2.2.2.2 Technology situation .42 2.2.2.3 About the issue of enterprise culture 44 2.2.2.4 About the issue of brand name 44 2.2.2.5 Activity to serve the customer 46 2.2.2.6 About financial capacity 48 2.2.2.7 General evaluation from analyzing internal environment of GPBank 48 Class: GaMBA01.X01 GROUP 11 2.2.3 Analyze external environment 51 2.2.3.1 Analyze macroscopic environment: 51 2.2.3.2 Analyze the sector environment 55 2.2.3.3 Judgment on opportunity and challenges from industry environmental analyzing 66 2.2.4 Matrix of internal – external factors (IE) 67 2.2.5 Current development strategy of GPBank 67 2.2.5.1 Strategy at company’s level 67 2.2.5.2 Business unit level strategy 70 2.2.5.3 Implementation and evaluation 71 2.2.6 Comment and evaluation on business strategy implementation of GPBank 71 CHAPTER 3: IMPLEMENTATION SOLUTION FOR BUSINESS STRATEGY OF GPBANK PHASE 2010 - 2015 73 3.1 Development orientation of the bank 73 3.1.1 Target and vision up to 2015 .73 3.1.2 Plan to strengthen and improve financial capacity 73 3.1.3 Some basic criteria .74 3.2 SWOT analyzing summary table of GPBank 75 3.2.1 SWOT analyzing summary table 75 3.2.2 SWOT summary table 77 3.2.3 Development orientation .77 3.3 Solutions to implement business strategy phase 2010-2015 78 3.3.1 Strengthen financial capacity 79 3.3.1.1 Strengthen risk management capacity, accomplish controlling system and monitoring quality of Credit asset by some measurements 79 3.3.1.2 Completely solve relating issues to bad debt and pending account receivables 81 3.3.1.3 To solve the issue on increasing chartered capital .81 Class: GaMBA01.X01 GROUP 11 3.3.2 Strengthen human resource quality 82 3.3.3 Technology system .85 3.3.4 Strengthen and improve brand name advertisement and products advertisement 87 3.3.5 Solutions on organization development and organize to extend business aspects 89 3.3.6 Summary table of impacts of solution groups to strategy of GPBank 92 3.3.7 Conditions to implement strategies 93 3.3.8 Process to implement strategy solutions .93 CONCLUSION 96 REFERENCES 97 APPENDICES 97 List 10 Banks are using T24 system .97 The order of the Bank charter capital from large to small 99 Comparing some targets in 2009 of VP Bank, Maritimes Bank, An Binh Bank, PG Bank and GP Bank 100 Class: GaMBA01.X01 GROUP 11 LIST OF ABBREVIATIONS CEO HSBC GDP WTO ATM Eximbank : : : : : : ACB Techcombank : : MB Sacombank VND T.V VTV1 ON : : : : : : Chief Excutive HongKong and Shanghai Banking Corporation General Dosmetic Product World Trade Organization Automatic Teller Machine Vietnam Export Import Commercial Joint Stock Bank Asia Commercial Bank Vietnam Techonological and Commercial Joint Stock Bank Military Bank SaiGonThuongTin Joint Stock Commercial Bank Vietnamese Dong Television VietNam Television - Channel Order Number Class: GaMBA01.X01 GROUP 11 LIST OF TABLES, FIGURES, GRAPHS Table 1.1: Table 1.2: Table 1.3: Table 1.4: Table 1.5: Table 1.6: Table 1.7: Table 2.1: Table 2.2: Table 2.3: Diagram for strategy planning IFE Matrix’s sample Competitive image matrix’s sample Michael Porter’s five competitive forces model External Factor Evaluation Matrix’s Sample SWOT matrix sample The I-E matrix sample Governance model of GPBank Some targets for operation of GPBank Datas of GPBank’s human resource Table 2.4: Analizing table of internal capacity factor of GPBank Table 2.5: Table 2.6: Table 2.7: Table 2.8: Table 2.9: Table 3.1: Table 3.2: Table 3.3: Table 3.4: Table 3.5: Table 3.6: Matrix table of internal factors of GPBank Data of GDP Matrix of competitive image of GPBank Table of external factor matrix The matrix of the internal - external factors of GPBank Target of charter capital from 2010 to 2015 Target of plan 2010 - 2015 period Result of SWOT analyzing SWOT’s coordination summary table Overview of impact of solution groups to strategy Timeline for implementing strategy solution Class: GaMBA01.X01 GROUP 11 FORWORDS Reasons of choosing subject: For every country, commercial bank system is always considered to be “blood vessel”, ruler to measure the strength of economy Besides the main function of trading in services in the field of monetary finance, Commercial Banks are also a tool which is used by Government to adjust and carry out the policies of macroeconomics In Vietnam, bank system has developed strongly, especially in nearly 05 years with the establishment of many new banks; older banks have widened the net of transaction Besides, with the trend of joining and opening with the world, Vietnam bank system also sees the presentation of branches of big banks in the world With the participant of 100 banks (including State Commercial Bank; Joint Stock Bank; branches of foreign bank, joint venture bank, bank with 100% foreign capital) with 16 financial companies, the competition is positive in financial market in Vietnam, therefore, if each bank wants to be exist and develop in that environment, that bank must build a business strategy which is suitable to business environment; suitable to their ability and advantages Being a bank with medium scale and the banks has changed model in to urban commercial joint stock bank, besides chances which are got from the develop of Vietnam economy, Global Petrol Joint Stock Bank (GPBank) has to face to problems in competitive environment Being peoples who are almost working at GPBank, by the content of this essay, besides the aim of systematizing the theoretical matters about strategy administration; analyzing - assessing the fact of carrying out the strategy in GPBank in recently time, group 11 also want to give the distributing ideas to Manager Board of Bank in carrying out the business strategy of GPBank in 2010-2015 Aim of research: - Collecting matters of strategy and strategy administration in business in general - Analyzing and assessing the fact of carrying out the strategy in GPBank in recently time 10 Class: GaMBA01.X01 GROUP 11 For the long term, with one fledging stock markets such as Vietnam, stock companies in Vietnam is still considered as having many opportunities, however, for GPBank, target of the establishment of stock company as well as strategy to develop the Company should be establish more detailed, growing criteria is indicated in the restructuring proposal still having subjective characteristics and general, has not got actual foundation Another trend that helps GPBank to be able to accomplish target to take advantage opportunity of the stock market is to participate contributed capital to stock company which has been established and being operated, in the mean while GPBank has conditions to selects potential stock company, with orientation and capacity to develop actually and is being noticed by the market etc - Relating to the Extension of transaction network : development orientation focus at major cities of GPBank is one correct orientation in current phase and it is suitable the conditions on financial capacity ,administrative management, human resources However , for the long term, if only this orientation is focused orientation, many potential market may be omitted and GPBank may be having disadvantages condition in the racing to other competitors in the development of advertising network and promotion of branch name Therefore, the necessary issue that should to is the general planning and develop network to have positioning plan trade marks at some potential markets, ready at some potential market, ready to prepare conditions so that the market develops because within to years laters, distance between regions would be reduced and many provinces in the country would be developed and become attractive markets to banking activities Another problem relating to orientation of GPBank that we want to mention to, that is: Although GPBank orientates to become a multi-function bank in favor of retailing, in the recent time the wholesale transactions are implemented frequently and with an increasingly density in both capital mobilization field and capital using We hope this is not changing about the strategic orientation of GPBank’s steering committee, but this is taking advantage of business opportunities in the favorable Page 90 Class: GaMBA01.X01 GROUP 11 conditions because according to assessment of the group, with the current scale and ability of GPBank, although pursuit of the wholesale strategy can bring a rapid growth, it is also latent of much risk Really in Viet Nam, it is not contingent that most of banks orientate in favor of retailing, therefore, GPBank should be patient to the chosen orientation Page 91 Class: GaMBA01.X01 GROUP 11 3.3.6 Summary table of impacts of solution groups to strategy of GPBank Table 3.5: Overview of impact of solution groups to strategy Solution group Strategies growth Strengthen financial capacity: Risk management, Accomplishment of controlling system and monitoring Credit asset quality - Process definitely bad debt and difficult liquidation debts - Increase chartered capital Develop Develop Diversifi markets products -cation Stability Strategy to Strategy to integration reduces development x Adjustment strategy Adjustment of Adjustment of manipulating organizational solutions structure x x x x x x Strengthen quality of human resource x x x x x x x Technology system x x x x x x x x x x x Publicize trade marks publicize products and x Develop organization extend business aspects and x x x x Class: GaMBA01.X01 GROUP 11 3.3.7 Conditions to implement strategies For above mentioned solution to be implemented to receive good results successful in the implementation of strategy from now on up to 2015, within the internal of GPBank, it should unify following principles and conditions: - The openness: strategies should be publicized to each departments, even to each individuals so that the deployment should be favorable and to be foundation to be successful as every member in the bank are aware the orientation development of enterprises as well as the mission of each individuals - The unify: all leader level from up to down should be consistence due to set out strategy and implement strongly and determinedly - Regular to monitor, evaluate and follow up implementation process of set out strategies and having timely adjustment for the suitable of ceaseless changing environment conditions - There is the distribution of resources actively and plan to ensure the using of resources to collect efficiency effectively and safely - Irregular objective factors outside movement trend of Vietnamese economy and world, national defense, social, political conditions take place normally 3.3.8 Process to implement strategy solutions To be able to implement successfully strategy up to 2015, on the foundations of real conditions at GPBank as well as the understanding on competitions, our groups propose process to implement concrete strategy solutions in details as follows: Table 3.6: Timeline for implementing strategy solution Class: GaMBA01.X01 GROUP 11 Therefore, in the process to implement solutions strategy which has been overall sketched out according to above mentioned model, it is possible to divided into two following implementation level as below: - Group of urgent solutions: which comprises Solution with paths to be accomplished within to initial years of years plan, in details? + Risk management, strengthen quality of Credit asset + To solve bad debt and difficult liquidation account receivables + Recruitment and training + Upgrade Core banking +Extend business by equity or seizing shares of Stock company - Group of regular Solutions: comprising solutions that is implemented in all years of years plans, this is not non-urgent issues but they should be deployed based on the real changes of the market and it possible to adjust via each year Looking at the deploying process of the above solutions, we can see that from now to 2012, GPBank will have to resolve many important works relating to strategy implementation for a period of years (2010 - 2015) and completion of solutions in 94 Class: GaMBA01.X01 GROUP 11 the two first years will have decide success of implementation of the years strategy 95 Class: GaMBA01.X01 GROUP 11 CONCLUSION In gradually fierce business competitive environment with constant appeared challenges and opportunities, to be able to attain set out target, the close monitoring of fluctuation environment as well as always to position the status of enterprises in the market so that on that foundation, to have adjustment solutions of strategy timely, the leaders of enterprises is considered as first priority duties For GPBank, although the bank is newly established, in comparison to most of another banks in the Vietnamese urban market joint stock banking system and scale of chartered capital is limited but GPBank not only integrated to business environment but also having strong and solid step, even more outstanding on some factors in comparison to some banks that have longer activity time in the markets That result partially confirms strategy steps of GPBank which is correct orientation and GPBank should be persistent to these targets Due to constraints research time, in this article, besides the systematically theoretical foundation on strategy administration, we only mentioned to key solutions relating to essential strategies that GPBank is deployed Our group correlative expects that some set out solutions in this article should be feasible proposal so that Board of Directors of GPBank refers and selects the implementation in order to accomplish current strategies of GPBank The collective group also expects to receive supplementary opinions of Teachers, Lecturers; Management Board of GPBank and students of GaMBA01.X01 to help us to exchange and drill more other skills and knowledge on strategy administrative management in general as well as the accomplish of solutions set out in this articles Respectfully thanks! 96 Class: GaMBA01.X01 GROUP 11 REFERENCES Liam Fahay & Robert M.Randall (2009), “MBA within reach – Strategy management” Fred R David, Outline about strategy management, Ho Chi Minh Statistic Publishing House, 2003 Ngo Kim Thanh, Strategic Management, University of National Economy Press, 2009 Doan Thi Hong Van, “Strategic Management”, Statitics House Publishing Business Operation reports of 2007, 2008, 2009 and months of the begining of 2010 of Global Petrol Commercial Joint Stock Company (Including audited Financial Report) Structural project of Global Petrol Commercial Joint Stock Company approved in 2009 Document “Conference of eveluating the development of 2001-2010 & oreientation for development 2011-2020” organizated on 08/09/2009 in Ha Noi Audited Financial Report 2009 of Banks: Techcombank; AnBinh Bank; VPBank; PGBank Information from website and annual report of Banks: Techcombank; AnBinh Bank; VPBank; PGBank 10 Informations and photos from some websites of: - Website of State Bank of VietNam: www.sbv.gov.vn - General Statistics Office of VietNam: www.gso.gov.vn - Websites about management specialist: www.365ngay.com.vn www.doanhnhan360.com.vn www.quantritructuyen.com www.cafef.vn vi.wikipedia.org APPENDICES List 10 Banks are using T24 system NAME SHORT NAME Vietnam Techonological and Commercial Techcombank 97 Class: GaMBA01.X01 GROUP 11 Joint Stock Bank SaiGonThuongTin Joint Stock Commercial Sacombank Bank AnBinh Joint Stock Commercial Bank South East Asia Joint Stock Commercial AnBinh Bank SeaBank Bank Military Joint Stock Commercial Bank MB Global Petro Joint Stock Commercial Bank GPBank VietNam Joint Stock Commercial Bank for VPBank Private Enterprises Orient Joint Stock Commercial Bank OCB BaoViet Joint Stock Commercial Bank BaoViet Bank SaiGon Joint Stock Commercial Bank SCB 98 Class: GaMBA01.X01 GROUP 11 The order of the Bank charter capital from large to small No Name of banks Chartered Capital (billion VND) 01 Sacombank 9,179 02 Eximbank 8,800 03 Asia Comercial Bank 7,814 04 Techcombank 6,932 05 Military Bank 5,300 06 SeABank 5,068 07 Sacom Bank 3,653 08 Lien Viet Bank 3,650 09 An Binh Bank 3,482 10 Dong A Bank 3,400 11 Vietnam Tin Nghia Bank 3,399 12 Maritimes Bank 3,000 13 NAS Bank 3,000 14 Habubank 3,000 15 VIB Bank 3,000 16 Saigon Bank 3,000 17 MD Bank 3,000 18 Trust Bank 3,000 19 VP Bank 2,117 20 Saigon - Hanoi Bank 2,000 21 Ocean Bank 2,000 22 GP Bank 2,000 23 Phuong Dong Bank 2,000 24 Mien Tay Bank 2,000 25 HDB 1,550 26 Viet A Bank 1,515 99 Class: GaMBA01.X01 GROUP 11 27 Bao Viet Bank 1,500 28 Nam A Bank 1,252 29 Tiên Phong Bank 1,250 30 Đại Á Bank 1,000 31 Đệ Nhất Bank 1,000 32 Gia Định Bank 1,000 33 Kiên Long Bank 1,000 34 Navi Bank 1,000 35 Việt Nam Thương Tín Bank 1,000 36 PGBank 1,000 Comparing some targets in 2009 of VP Bank, Maritimes Bank, An Binh Bank, PG Bank and GP Bank Targets VPBank Maritimes An Bình Bank Bank PGBank GPBank Total assets VND) (billion 27,543 63,882 26,518 10,418 17,274 Chartered (billion VND) Capital 2,117 3,000 3,484 1,000 2,000 Employees 1,963 1,886 1,479 905 892 132 110 89 56 63 Profit (billion VND) 382.63 1,005 412 230 173 Mobilizing (billion VND) 16,489 30,053 15,001 6,896 15,200 15,682 23,698 12,882 6,219 6,962 Total (person) Total Branchs capital Loan (billion VND) 100 ... PG Bank and GP Bank 100 Class: GaMBA01.X01 GROUP 11 LIST OF ABBREVIATIONS CEO HSBC GDP WTO ATM Eximbank : : : : : : ACB Techcombank : : MB Sacombank VND T.V VTV1 ON : : : : : : Chief Excutive... the group to complete the MBA course: Duong Thi Bich Lien Nguyen Manh Hung Nguyen Hong Khuong Mai Thi Thuy Huong Hanoi, July 22nd 2010 GENERAL DIRECTOR (Signed) Class: GaMBA01.X01 GROUP 11 TABLE... schematized as below: 16 Class: GaMBA01.X01 GROUP 11 Table 1.1: Diagram for strategy planning (excerpted documentary “Strategic Management” - Program Global Advanced MBA – Griggs University) 1.4 Important