Luận văn thạc sĩ quản trị kinh doanh quốc tế MBA (159)

GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER BUSINESS ADMINITRATION PROGRAM CAPSTONE PROJECT DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 Group No: – GaMBA01.V0110 Student’s name: Vo Thanh Tan Nguyen Tran Quang Nguyen Thanh Xuan Mai Thi Hai Van HANOI, 2011 TABLE OF CONTENTS DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 LIST OF TABLES AND FIGURES Figure 1.1 F.David’s Model of Strategic Management Table 1.1 Figure 1.2 Figure 1.3 Figure 2.1 Table 2.1 Table 2.2 Macro-environment factors Micro-environment map SWOT Matrix Organizational chart of Vietcombank Quang Binh Business performance of Vietcombank Quang Binh Comparison of Vietcombank Quang Binh’s operation with those of Table 2.3 Vietinbank, BIDV, and Agribank branches in Quang Binh The External Factor Evaluation (EFE) Matrix of Vietcombank Table 2.4 Table 2.5 Quang Binh Capital mobilization activities of QuangBinhVietcombank The Internal Factor Evaluation (IFE) Matrix of Vietcombank Table 2.6 Table 3.1 Table 3.2 Quang Binh The SWOT Matrix of Vietcombank Quang Binh QSPM Matrix of Vietcombank Quang Binh Action plan INTRODUCTION The necessity of the research Entering 2011, the world economy hasn’t been out of the crisis and downturn The largest economy – The United States – is dealing with many difficulties coming from the government’s debt and unemployment Japan is still suffering the heavy damage from the earthquake March, 2011 Especially, the debt crisis has spread over countries in the Euro Zone The political instability and V0110.Capstone.Group3 DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 democratic process in some North African countries which have large oil reserves such as Libya, Egypt also have great influence on the world oil markets Meanwhile, our country’s socio-economic conditions in the first half of 2011 took place with many difficulties and challenges The prices of necessity products in the world are fluctuating with the increasing trend Although some large economies have recovered from the global financial crisis, they are still carrying some risks and instability Domestically, the inflation is higher, the weather is complicated and there are many diseases occurring in the plants and animals As estimated, GDP in the first half of the year increased by 5.57% compared to the same period in 2010 To the banking industry, when Vietnam joined WTO and committed to open this market, the industry has had some dramatic changes - Traditional banking activities have the potential to grow stably - Retailing banking and investment banking activities have high growing potential The use of personal banking services remains low - The competitiveness between the State-owned Commercial Banks and Joint Stock Commercial Banks is increasing significantly - The operation effectiveness of banks is not uniform - Banks are facing many risks, including credit risk, liquidity risk, interest rate risk, investment risk In that context, beside the general strategy of Vietnam Vietcombank, QUang Binh Vietcombank Branch should develop its own business strategy based on the analysis of Quang Binh market Research subject: The research subject is Quang Binh Vietcombank branch The research scope just limits in the strategic issues and strategic management The main source of data is from Quang Binh Vietcombank Therefore, the topic is only applicable to this bank branch Research purpose: V0110.Capstone.Group3 DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 The purpose of this research is to build a strategy for Quang Binh Vietcombank branch until 2015 and give some recommendations on the strategy implementation in order to help the Quang Binh Vietcombank Joint Stock Commercial Bank branch become one of the strong bank branches in Quang Binh Research methodology The research, based on the dialectical materialism philosophy combined with the learnt knowledge, aims to evaluate the whole business operation of Quang Binh Vietcombank branch Data processing and analysis method: the research uses the method of statistical description, analysis and synthesis to evaluate the business operation results of Quang Binh Vietcombank; it also uses the matrix like EFE, IFE, SWOT, QSPM Research structure Chapter 1: Theoretical foundation of business strategy Chapter 2: Analysis of the current business operations of Vietcombank Quang Binh Chapter 3: Selection of business strategies and implementation solutions for Quang Binh Vietcombank bank branch (period 2011-2015) CHAPTER I THEORETICAL FOUNDATION OF BUSINESS STRATEGY 1.1 Business strategy 1.1.1 Concepts of business strategy: In the view of “Strategy business is the art” - Michael Porter said: “ Strategy is the art the build sustainable competitive advantages to defend” V0110.Capstone.Group3 DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 In business, strategy is the art of organizing the tools to reach the long term objectives of the company, having the relationships with the changes I the business environment and competition Another view is that: business strategy is a series of commitments and actions that the company uses to gain a competitive advantage by exploiting core competences in a certain market The purpose of business strategy is to differentiate the company from other competitors to position itself The company has to decide whether to operate in a different way or perform activities differently from rivals 1.1.2 Role of business strategy: - Business strategy helps the company to identify the objectives and direction which can be used as the compass for every business operation activity - Business strategy helps the company to grasp and take advantage of opportunities, having active solutions to overcome the threats and risks in the competitive market - Business strategy helps to improve the efficient use of resources, enhancing the competitive position to ensure the sustainable development of the company - Business strategy creates a firm basis for policy proposal and decisions on business operation in the case of changing market 1.1.3 Generic business strategies Cost leadership strategy Cost leadership strategy is providing products and services to the customers at the lowest costs compared to other competitors The purpose of this strategy is to out-compete the others by reducing the costs of production and supplying the products to customers at lower prices than the rivals Differentiation strategy The purpose of the differentiation strategy is to gain the competitive advantage by providing the customers with the products or services that are perceived to be unique in terms of some aspects by the customers The company following this V0110.Capstone.Group3 DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 strategy tries to create products with features that the competitors cannot match and charges the customers premium price (that is higher than the average price of the industry) The ability to create profit by charging the premium price (rather than reducing the costs as in the cost leadership strategy) helps the differentiators outperform their competitors and gain the profit that is higher than the average level of the industry The price charged by the differentiator is higher than that of cost leaders; however, the customers are still willing to pay because they believe that the differentiating products have unique features Focused strategy Focused strategy is the third strategy The difference from two above strategies is that it aims at specific segment of market to serve customers’ needs A focused strategy will direct to specific market gaps that can be determined based on geography, customers, or product lines For instance, a market gap of geography can be defined according to regions or even locations The company can choose the market segment of upper, middle or low income customers or the young people 1.2 Business strategic management process Strategic Management Process is summarized by the following model: External analysis to identify the main opportunities and threats V0110.Capstone.Group3 Establish Specific objectives Establish long term objectives DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 Identify current missions, objectives and strategies Allocate resources Review business goals Internal analysis to identify the main strengths and weakneses Choose the strategy Identify and evaluate achieveme nts Propose policies Planning strategy Implementing strategy Evaluating strategy Figure 1.1 F.David’s strategic management model 1.2.1 Identification of Vision, Mission(s) and Objectives A company’s main mission and objectives provide the context for the strategy Mission statement shows why the company exists and what it will Main objectives identify what the company hopes to in the medium and long term Vision: Claims of enterprise on their position in business environment in a certain period of time – is guidelines for company’s action in all the times and circumstances V0110.Capstone.Group3 DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 Mission: Reflecting the important tasks of the business in business environment and is often expressed through brief philosophies of business Mission shows the reasons for the formulation and existing of a business Businesses can change their strategy to carry out the mission but hardly change the reason of their existing Objective: is the final goal the enterprise wants to achieve Objectives show the directions for all the decisions and forming criteria for measuring performance in practice 1.2.2 External environment analysis PEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes a framework of macro-environmental factors used in the environmental scanning component of strategic management It is a part of the external analysis when conducting a strategic analysis or doing market research, and gives an overview of the different macroenvironmental factors that the company has to take into consideration It is a useful strategic tool for understanding market Enterprises identify the opportunities and threats by using the data analysis on the changes of the market that they are currently in or intend to enter The opportunities can be market development, market gap, near supply or skill-matching and cheap labors The threats to the companies can be the shrinking market, stronger competition, policy changes, political instability in the main markets or the technology development making the facilities and production lines probably become obsolete Macro-environment analysis involves the consideration of macro- environment factors, political and legal factors, socio-cultural factors, natural factor and technology factors Table 1.1 Macro-environment factors * Economy -Stage of economic cycle -Sponsorship V0110.Capstone.Group3 * Politics and Government: - Regulations on consumer loan - Antitrust laws DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 -Trends of national income -Inflation rate -Interest rate -Monetary policy -Level of unemployment - Tax policy - Control of wage / price - Balance of Payments *Society - Attitude toward the quality of life - Lifestyle - Women in the labor force - Occupation - Flexibility of the consumer * Population: - Population growth rate - Changes in the population - Population density - Religion - Environmental Protection Act - Rules on taxation - Stimuli - International service laws - Rules on hiring and promotion - Government stability * Nature: - Types of resources - Pollution - Lack of energy - Waste of natural resources * Engineering technology: - Target of the state on research and development Expenditure of industry on research and development Focus on engineering efforts - Patent Protection - New products - Transfer of new technologies - Automation - Robot Micro-environment analysis includes: Rivalry, Customers, Suppliers, Potential competitors, Substitutes The overall impact of these factors is the reality that the companies have to accept To have a proper strategy, the companies have to analyse these factors Five Competitive Forces: Michael Porter's Five Forces have become a yardstick for assessing industry profitability They are: Buyers'/customers' power Suppliers' power Rivalry among competitors Threat of new entrants Threat of substitute product V0110.Capstone.Group3 DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 Figure 1.2 M Porter’s Five Forces Analysis of environmental factors will allow businesses to clearly identify what are the opportunities that businesses can take and what are the threats that businesses have to face Evaluation of opportunities and threats from the external environment will allow enterprises to set out specific business tasks and reasonable policies to achieve goals 1.2.3 Internal environmental analysis The purpose of internal environment analysis is to find the strengths and weaknesses of a business By analyzing the internal environment of a business, the strengths of the business can be identified such as: skills, resources, advantages over competitors (core competencies of the business), talent managers, advanced technology, recognized brand, avaible cash, good corporate image in the public’s eye or large market share in key markets The main weaknesses of a business are reflected in the shortcomings or limitations in skills, resources or other factors negatively influencing the competitiveness of that enterprise They may be ineffective V0110.Capstone.Group3 10 DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 Strategy 1: Network development strategy: In the basis of promoting the strength of Vietcombank including modern technology by the fact that VCB always stay ahead in the application of e-banking products compared to other banks nationwide, combined with stable, strong and competitive financial capital, VCB provides the 2% lower of service fees and 5% lower of interest rate than other banks in the area In addition, the advantages of the local social and economic conditions appears, such as: stable economic growth with the average rate of 10,5%, investment policies focused on infrastructure, industrial parks, economic zones; improved average income of about 1.000 USD/person/per year, increasing intellectual level, expanding internet and communication network into many remote areas Banking services, therefore is inevitable in the social and economic development of Quang Binh province Besides, Quang Binh province has great potential not only in tourism development and services with Phong Nha breathtaking cave system; Nhat Le stretching beaches, but also in construction materials producing with raw materials for cement limestone, titanium ore; manganese and aquatic products export development Moreover, Quang Binh authorities’s policies has focused on development of economic zones, industrial parks to attract investment priorities in the country and abroad Those are favorable conditions for Vietcombank Quang Binh to expand operations in the province, develope business, increase the market share of capital mobilization, credit and banking products in order to meet the increasing needs of customers Strategy 2: Market development strategy: Beside the network development, market development is also the important task to focus on in the future: With high technology systems and modern electronic banking, VCB has always satisfied the increasing needs of customers; combined with prestigious V0110.Capstone.Group3 46 DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 brand's price has established over 45 years of operation, especially in the field of import and export payments, foreign exchange has been known in the region and the world With quality management system, VCB is considered to be the leading bank in the direction of integration according to international standards This allows Vietcombank to take advantage of growth opportunities on the following basis The economic integration of the region and the world has created positive conditions for banks The advantage of Quang Binh for having a road system near the east of Laos and northern Thailand (From the TP Dong Hoi way Chalo Laos border about 130 km), is favorable for the development of trade circulation of goods import and export businesses At the same time, combined with the potential for tourism development, construction materials producing and seafood export Those are the favorable conditions for Vietcombank Quang Binh to expand marketoriented businesses in the future 3.2.2 Determination of business strategies According to the above analyses, Vietcombank Quang Binh needs to focus on two strategies below: Strategy 1: Network development strategy Focus on investing and developing Vietcombank’s network including: transaction offices, ATMs, POSs: - Expanding transaction offices in many districts of Quang Binh province, such as: Ba Don office, Bo Trach office, Quang Ninh office, Hon La economics zone office, South – West Dong Hoi economics zone office - Developing POS network through ATM systems in areas where transaction offices are operating, hotels, supermarkets and restaurants in local provine Strategy 2: Market differentiation development strategy Expand market in the border areas including promoting banking services to customer, atracting customers, and having appropriate customer cares policies in order to increase market share, improve effectiveness of performance V0110.Capstone.Group3 47 DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 - Developing business at border gate areas between Vietnam and Laos-North East of Thailand such as: + Set up transaction offices in Chalo-Laos-North East Thailand border gate to attract foreign currency deposits and support import export payment + Install currency exchange desks and POSs at the trade centers of Vietnam, Lao and Thailand 3.3 Strategic implementation solutions 3.3.1 Human resource development solutions The existing management team and specialists of Vietcombank Quang Binh just meet the current demand To facilitate the expansion of the bank over the area with increasing number of transaction offices, the human resource needs to add up and improve their capability 3.3.1.1 Recruitment activity The recruitment activity has to follow the guideline of National system of Vietcombank Besides, the real operating condition and the strategic business direction at Vietcombank Quang Binh require the affiliate to augment the recruitment criteria Recruitment program has to be conducted publicly and clearly to attract the candidates with qualification, dedication and long term commitment to the affiliate The bank denies candidates who are unqualified but recommended by internal relationships These candidates will not meet the job’s requirements 3.3.1.2 Staff training The staff training programs have to be conducted continuously and regularly to update the working knowledge Besides the training courses of technical skills, operation, service offerings hold by Vietcombank, the affiliate also needs training courses in working skills, communication skill, team working, customer service, etc To managers, the company has to conduct classes to improve management skills such as planning skill, leadership skill, decision making skill, etc Meanwhile, V0110.Capstone.Group3 48 DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 the company will encourage or support managers to study MBA courses to improve management skills, facilitating the sustainable and long term development of the affiliate The signature characteristic of Vietcombank is being a foreign trade bank, therefore the affiliate will focus on training to improve the foreign language for staff members Moreover, as Quang Binh province has great tourism potential, attracting many foreign visitors, the transaction staffs have to communicate fluently in English 3.3.1.3 Compensation policy The banking industry is competing very fiercely Although the human resource for banking service is continuously renewed, the real quality resource is rare Moreover, as Quang Binh is a low developing province, the retention of qualified staffs is a challenge To retain the human force, ensuring the capable human resource for the long term development, the affiliate has to establish an appropriate compensation program Specifically, it includes: Convenient, fully equipped offices should be maintained so that staff members can effectively conduct their job A strong business culture so that staff can increase their satisfaction and commitment to the bank Besides salary, rewarding schemes following Vietcombank system instruction, Vietcombank Quang Binh branch also needs additional reward and salary system based on profit sharing and sales 3.3.2 Marketing Solutions Currently, Vietcombank Quang Binh’s network is quite thin, only including head office, transaction office and ATMs Considering the wide area of Quang Binh province and the coverage of competitors, Vietcombank Quang Binh is apparently unknown to customers Besides, Vietcombank Quang Binh has not possessed department and specialists of marketing and the board of director has yet built up separate marketing plans to operate in the area V0110.Capstone.Group3 49 DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 In the banking industry, marketing plays a very important role As different banks compete fiercely with each other, service offerings are similar, the service fee are approximately the same, the decision on which bank to use depends on customers Vietnamese customers are generally passive in finding banks for their transaction The banks which have strong, familiar brand names and are introduced by friends or relatives will be trusted and used by customers Vietcombank Vietnam has been for a long time confirming its prestige and brand over Vietnam’s banking industry and it is also one of four state owned banks with highest capital and efficiency level In big cities, the market share of Vietcombank is quite high Customers place great trust in using products and services of Vietcombank Quang Binh province is attracting more and more investment from the companies from big cities and other countries, and it’s also the tourism destination Therefore, customers who go to Quang Binh will also go to Vietcombank Quang Binh and the affiliate has to market, promote and expand its network so that customers from faraway places know the branch 3.3.2.1 Market research Market research Vietcombank Quang Binh has to immediately formed the Marketing department, staffed by marketing and market research specialists The market research will concentrate on examining the social and economic environment of Quang Binh, other banks operating in Quang Binh and the fields that have high demand for banking services The bank also has to research on the market of banking service for tourists The bank will research on the market for sponsoring service of import – export payment, as Quang Binh is a province with marine port and border gate, with capability in exporting seafood, natural minerals, etc The market research will be the guidance to offer appropriate products to the market and meet customer’s demand V0110.Capstone.Group3 50 DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 Defining target customers: Vietcombank Quang Binh has to define its own target customer, therefore it can offer proper customer service, create long lasting relationship for mutual benefits Because of the characteristic of Quang Binh province, the target customers of Vietcombank Quang Binh are import- export companies, tourism companies and domestic as well as foreign tourists The strengths of Vietcombank Quang Binh are the Vietcombank brandname and its services the products which have been known and used by many customers all over the country Anually, the number of tourists to Quang Binh is huge; they will be the potential customers to use the products and services of the Vietcombank system through Vietcombank Quang Binh Besides, the staff’s foreign language proficiency and experience of exportImport financing will help Vietcombank Quang Binh create competitive advantage over other banks in its strong area which is foreign trade 3.3.2.2 Marketing Mix Marketing Mix consists of elements: Product, Price, Place (Distribution), and Promotion Product: The bank should focus on implement highly effective products such as: guaranteeing, payment, foreign currency trading, and securities trading… The bank will effectively conduct the implementation of full service package to customers, along with cross trading of banking services and other services offered by Vietcombank such as insurance, securities, fund management, gold trading… Distribution: The development direction of Vietcombank Quang Binh is to become a retailing bank, therefore the expansion of operation network is important and necessary to scoop the market, gain market share and improve level of effectiveness, becoming the leading bank in Quang Binh market However, the network expansion has to align with the affiliate’s capability in each period For the V0110.Capstone.Group3 51 DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 period of 2010-2015 Vietcombank Quang Binh can enlarge its market through the following ways: - The bank should complete the construction of the new headquarter building and settle in - The bank should also establish new transaction offices in: Dong Hoi town, Bo Trach district, Quang Trach district, Northern Dong Hoi industrial zone, Hon La industrial zone - The bank should set up more ATMs and international credit card reception points at major supermarkets, hotels, tourist attractions… Prices: The bank should set up prices flexibly and effectively, avoiding conservatism Besides normal interest rates and fees, the bank should have lobbying and promoting policies to customers who bring more benefits to the affiliate The fees offered by Vietcombank system are competitive to other banks, especially the money transfer fee within the system Promotion: The bank has to conduct promotion program to introduce itself on local public media Sales promotion programs: The bank will sponsor for some local events such as “Quang Binh tourism week” The bank will also effectively conduct community services and participate in social charity programs The bank will conduct annual customer grand meeting to listen to customers’ feedback and express gratitude to them 3.3.3 Technology solutions Vietcombank has been rewarded “Best technology solution 2011” for the digital/mobile banking services This is the prestige award by PC World Magazine, and voted by the customers who directly experience the service This award is the V0110.Capstone.Group3 52 DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 recognition for Vietcombank’s investment efforts in infrastructure of digital banking system Vietcombank Quang Binh has been equipped with modern, advanced facility, always going ahead in renewing and offering new products to better meet the increasing demand of customers Thanks to the inheriting of the system’s technology infrastructure, Vietcombank Quang Binh has ability to compete on prices and products 3.3.4 Building the organizational culture Given the current integrating condition, “business culture” gradually becomes important and influential to the survival and development of the business Vietcombank system has issued the “Vietcombank culture guideline”, to orient and build up the business culture of Vietcombank in the period of integration and development of Vietnam Besides improving labor’s income, Vietcombank Quang Binh affiliate needs to build up the distinguished, consistent image and characteristic, therefore attracting attention of new candidates and talents for recruitment and gaining commitment from existing staff members In reality, there are people who agree to leave the high income but unsuitable positions to work for the more suitable positions, though accepting lower income That fact proves that the development of living standard has made the issue of living expenditure no longer the only pressure that affects employee’s choice of working places This is especially true to employees with high level of experience and qualifications What they need is a working environment where the recruitment policy is fair, employees are properly arranged and assigned tasks that suit their capability and education so that they can best perform on work and most effectively evaluated The bank will raise performance competition to maintain and develop cultural values of Vietcombank, eliminate unhealthy cultural symptoms, improve the image and brand name of Vietcombank, promote the internal organizational strength for the expansion and sustainable development of Vietcombank V0110.Capstone.Group3 53 DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 - Trust: the bank always maintains confidence and professionalism - Standardization: the bank respects communication principles and standards - Ready to change: the bank will pursuit the new, modern and developed practices - Sustainability: the bank commits to sustainable, long term benefits - Humanism: the bank respects ethicalness, thoughtfulness and understanding Periodically, Vietcombank Quang Binh will conduct evaluation to point out achievements and weaknesses, in order to appraise individuals with accomplishments in high performance movement 3.3.5 Construction of facilities Vietcombank Quang Binh needs to concentrates investment on upgrading the infrastructure to meet the demand of network expansion Besides the newly constructed headquarter in the center of Dong Hoi city, other transaction offices also need improving and renovating to be attractive, convenient, helping staff members to work and customers to transact The transaction offices that have been planned will look for the convenient location in terms of transportation and decoration for advertising The interior design has to be uniformed with Vietcombank’s brand name and characteristic The bank also needs to regularly improve the computer system and Internet cable to equip the development of products and services that require technology application 3.4 Action plan According to the analysis and decision on business strategy for Vietcombank Quang Binh affiliate, effective application and implementation of the strategy requires a specific action plan to ensure the logicality and suitability: V0110.Capstone.Group3 54 DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 Table 3.2 Action plan Content 2011 Timeline 2012 2013 2014 2015 Build up human resource demand Seek for new transaction office location Plan for recruitment Prepare documents and capital to establish new transaction office Build up marketing plan 6.Recruit new staff members 7.Training Invest into new office grand opening Implement customer services 10 Implement marketing programs 11 Evaluate the strategy 12 Build up strategy for 2015-2020 CONCLUSION In the context that Vietnam has widely and deeply integrated into the world’s economy, there have been more and more foreign banks entering the banking market when Vietnam commits to implement the WTO accession agreements The financial-banking market is becoming more dynamic and fiercely competitive than ever At this time, transaction offices are present in all places, especially in urban areas Banks are competing by capital, brand, services, networks, products and there is a remarkable shift of employees from one bank to another It can be said that the banking sector in Vietnam is in the strongest stage of development In addition to the achievements and benefits that the banking sector has brought to the economy and customers, this sector still contains numerous inherently systemic risks Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) is a state joint-stock bank with large capital, strong brand and extensive network However, the bank is also under enormous competitive pressure In big cities as well as in underdeveloped regions such as Quang Binh, the branches of V0110.Capstone.Group3 55 DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 Vietcombank are also under highly competitive pressure Therefore, Vietcombank Quang Binh should develop its own strategies in accordance with the region’s actual conditions to promote its strengths and take advantage of the support from the Central Vietcombank in order to compete and increase the market share and profit The Capstone project of “Developing business strategies for Vietcombank Quang Binh in the period of 2011 - 2015” is a study with practical application The Group of GaMBA V0110 has gathered available materials from Vietcombank Quang Binh, documents on the economic development of Quang Binh province, other banking materials and Strategic Management learning materials from a variety of sources including the Internet It is favourable for the group to have members who are senior managers of Vietcombank Quang Binh and members who are executives of People’s Committee of Quang Binh Therefore, the data and materials used in this project have clear origin and high validity The Group has followed the proposal instructed by the supervisor and complied with the Capstone project regulations of the MBA program - University of Griggs U.S V0110.Capstone.Group3 56 DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 REFERENCES Ass Prof Dr Ngo Kim Thanh (2011), Strategic Management Textbook, National Economics University Hanoi Publishing House Fredr.David (2006), Concepts of Strategic Management, Statistics Publishing House, Hanoi Report on business activities of Vietcombank Quang Binh from 2006 to 2010 Report on capital mobilization of the banks in Quang Binh province Economic and social report of Quang Binh province in 2010 Report of Bao Viet Securities Company on Vietcombank Report of Tan Viet Securities Company on Vietcombank Website:www.Vietcombank.vn;www.sbv.gov.vn; www.vneconomy.com.vn V0110.Capstone.Group3 57 DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 APPENDIX Appendix Market share growth target Year 2011 2012 2013 2014 2015 Total Outstanding loans (billion dong) 1,200 1,440 1,728 2,074 2,281 Growth rate 20% 20% 20% 20% 10% VND/ USD rate 90/10 90/10 90/10 90/10 90/10 43/15/42 44/16/40 45/17/38 46/18/36 47/19/34 8% 9% 10% 11% 12% Structure of SME/ individual/ other components Market share Appendix Growth target of raising capital Year 2011 2012 2013 2014 2015 Mobilized capital 935 1,215 1,519 1,823 2,096 Mobilized capital growth rate 30 25 20 15 10 Structure of economic organizations/ residents 45/55 44/56 43/57 42/58 41/59 VND/ USD rate 85/15 84/16 83/17 82/18 81/19 Market share 10% 11% 12% 13% 14% V0110.Capstone.Group3 58 DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 Appendix Target of payments, services No I II III IV Year Import-Export Payment (thousand USD) Market share Trading cards activities Number of Accumulated ATM card Market share Number of card using (billion VND) POS (point of sale) accepting accumulated card Market share Salary from accumulated account Market share Customers using Accumulated Internet banking services Customers using accumulated SMS banking services Market share Money transfer (billion VND) Outward remittance Inward remittance Accumulated account V0110.Capstone.Group3 2011 2012 2013 2014 2015 60,000 63,000 66,150 72,765 80,041 40% 41% 42% 45% 50% 43,000 46,000 49,000 53,000 57,000 25% 25% 25% 25% 25% 548 575 604 634 666 25 32 40 50 60 25% 26% 27% 28% 29% 123 130 140 150 160 28% 28% 28% 30% 30% 1,300 1,950 2,925 4,387 6,580 4,700 7,050 10,575 15,862 21,262 28,230 36,499 48,049 64,466 86,829 14,230 18,499 24,049 32,466 43,829 14,000 18,000 24,000 32,000 43,000 32,000 35,000 38,000 43,000 48,000 59 DEVELOPING BUSINESS STRATEGIES FOR JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM - QUANG BINH BRANCH IN THE PERIOD OF 2011 - 2015 No Year Cashflow (billion V VND) Sales revenue Expenses Foreign curency VI trading (thousand USD) Sale revenue Expenses Oversea outward VII Remittance (thousand USD) Market share 2011 2012 2013 2014 2015 9,250 11,250 13,750 16,550 19,550 4,702 4,548 5,600 5,650 6,900 6,850 8,200 8,350 9,875 9,675 35,072 41,072 48,072 56,072 65,072 17,500 17,572 20,000 21,072 24,600 23,472 28,000 28,072 33,000 32,072 5,000 5,750 6,612 7,934 9,520 20% 21% 22% 25% 25% Appendix Target of Deposit and Loan Interest rate Year 2011 2012 2013 2014 2015 Deposit Interest rate 11.73 12.5 11.18 10.75 10.6 Loan Interest rate 15.23 16.2 15.1 14.6 14.35 3.5 3.7 3.92 3.85 3.75 Difference Appendix Profit target Year 2011 2012 2013 2014 2015 Revenue 164,580 212,876 266,095 320,999 371,256 Expenses 143,009 185,912 232,390 278,868 320,698 Profit 21,571 26,964 33,705 42,131 50,558 25 25 25 25 20 Growth rate (%) V0110.Capstone.Group3 60 ... state-owned banks, including BIDV, Vietinbank, Vietcombank, Agribank and some large commercial privatized banks like ACB, Sacombank, Techcombank, Eximbank and MB Banks fiercely compete in terms of... (EFE) Matrix of Vietcombank Table 2.4 Table 2.5 Quang Binh Capital mobilization activities of QuangBinhVietcombank The Internal Factor Evaluation (IFE) Matrix of Vietcombank Table 2.6 Table 3.1... Vietcombank, QUang Binh Vietcombank Branch should develop its own business strategy based on the analysis of Quang Binh market Research subject: The research subject is Quang Binh Vietcombank