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Capstone Project Report - GAMBA.X01 - Group LIST OF ACRONYMS LIST OF PICTURES AND TABLES INTRODUCTION I NECESSITY OF THE TOPIC II RESEARCH OBJECTIVE OF THE TOPIC III SUBJECT AND SCOPE OF RESEARCH .7 Research subject Research methodology .7 IV REPORT STRUCTURE CHAPTER I THEORETIC BASES TO FORMULATE A BUSINESS STRATEGY 1.1 OVERVIEW OF A BUSINESS STRATEGY 1.1.1 Definition .8 1.1.2 Classification of business strategies 1.1.3 Factors affecting the strategy of a Company 10 1.2 PROCESS OF STRATEGY FORMATION 15 1.2.1 Strategy formulation process under the SWOT analysis methodology .15 1.2.2 Tools to formulate a business strategy 17 1.2.2.1 External Factor Evaluation Matrix (Matrix EFE ) 17 1.3 ROLE OF STRATEGY FORMULATION FOR THE COMPANY 25 ACTUAL BUSINESS PERFORMANCE OF SAIGON-HANOI COMMERCIAL JOINT STOCK BANK .27 2.1 INTRODUCTION OF SAIGON-HANOI COMMERCIAL JOINT STOCK BANK (SHB) 27 2.1.1 History of establishment and development .27 2.1.2 Organization Structure of SHB .28 2.1.3 Products and services 30 2.2 BUSINESS PERFORMANCE 30 2.2.1 Funds Mobilizing .30 2.2.2 Credit activities 32 2.2.3 Foreign currency trading activity 34 2.2.4 Card Services 34 2.2.5 International payment service 35 2.3 ANALYSIS OF ENVIRONMENT FACTORS AFFECTING SHB’S BUSINESS.36 2.3.1 Analysis of the business environment 36 2.3.2 External Factors Evaluation matrix ( EFE) 49 2.3.3 Competitive Profile Matrix 52 2.3.4 Internal invironmental analysis 54 2.3.5 Intenal Factors Evaluation Matrix (IFE) 61 2.3.6 Internal and external factors combination Matrix (IE) .64 CHAPTER III .65 -1- Capstone Project Report - GAMBA.X01 - Group BUSINESS STRATEGY FORMULATION FOR SAIGON HANOI COMMERCIAL JOINT STOCK BANK IN THE PERIOD 2010 – 201565 3.1 DEVELOPMENT ORIENTATIONS OF SAIGON - HANOI JOINT-STOCK COMMERCIAL BANK IN THE PERIOD FROM 2010 TO 2015 65 3.1.1 Operating principles 65 3.1.2 Strategic business objectives 66 3.2 SELECTION OF STRATEGIES FOR SHB IN THE PERIOD 2010 - 2015 67 3.2.1 SWOT Matrix 67 3.2.2 SPACE Matrix 68 3.2.3 QSPM Matrix .71 3.1.4 Defining strategies for SHB in the period 2010 - 2015 74 3.3 SOLUTIONS TO IMPLIMENT SHB’S BUSINES STRATEGY IN THE PERIOD 2010 - 2015 75 3.3.1 Increase financial capacity 75 3.3.2 Complete and develop consistently the IT systems 76 3.3.3 Diversify products and services 77 3.3.4 Increase service quality 77 3.3.5 Expand network 78 3.3.6 Complete the organizational structure and increase human resource quality 79 3.3.7 Marketing Solution: 80 3.5 SOME RECOMENDATIONS .85 CONCLUSION 87 -2- Capstone Project Report - GAMBA.X01 - Group LIST OF ACRONYMS ATM Automated teller machine APEC Asia-Pacific Economic Cooperation CA Competitive Advantage ES Environment Stability EFE External Factor Evaluation Matrix EU European Union FS Financials Strengths GDP Gross domestic product IS Internals Strengths IFE Internal Factor Evaluation Matrix IE Internal External Matrix KPIs Key Performance Indicators QSPM Quantitative Strategic Planning Matrix ROA Return On Assets ROE Return On Equity SHB Sai Gon - Ha Noi Join stock commercial Bank SWOT Strengths, Weaknesses, Opportunities, Threats SO Strengths, Opportunities ST Strengths, Threats SPAC E Strategic Position and Action Evaluation Matrix WO Weaknesses, Opportunities WT Weaknesses, Threats WTO World Trade Organization R&D Reseach and Devolopment IT Information Technology HR Human Resource SBV State Bank of Viet Nam -3- Capstone Project Report - GAMBA.X01 - Group LIST OF PICTURES AND TABLES Picture 1.1 Strategy formulation process under SWOT………………… 16 Picture 1.2 Matrix IE ……………………………………………………….20 Picture 1.3 Matrix SWOT…………………………………………… 21 Picture 1.4 Matrix SPACE……………………………………………… 23 Picture 2.1 Organizational structure …………………………………… 28 Table 2.1 Funding structure………………………………………….… 30 Table 2.2 Loan breakdown by terms ……………………………… .32 Table 2.3 Loan classification………………………………………… 33 Table 2.4 Some indicators of foreign exchange trading activity ……… 34 Table 2.5 Some financial indicators…………………………………… 35 Table 2.6 Matrix of External Factor Evaluation (EFE)………………….49 Table 2.7 Matrix of Competition Image…………………………………52 Table 2.8 Matrix of Internal Factor Evaluation (IFE)……………………61 Picture 2.2 Matrix of Internal-External Factors Combination (IE)… 64 Table 3.1 Matrix of proposing strategies under SWOT model………… 67 Table 3.2 Matrix of Strategic Position and Action Evaluation (SPACE) 68 Picture 3.1 Strategies on Matrix SPACE………………………………….70 Table 3.3 Matrix QSPM………………………………………………….72 Table 3.4 Talble 3.5 Strategies………………………………………………………74 Timeline to implement strategic solutions…………………….83 INTRODUCTION I NECESSITY OF THE TOPIC Commercial bank is a financial intermediary, playing the important role of a bridge among players in the economy In order to reach efficient banking, corporate -4- Capstone Project Report - GAMBA.X01 - Group governance and management should be scientific, under certain methodologies and systematic Due to this, strategic management is one of the top priorities of banks Saigon-Hanoi Joint Stock Commercial Bank (SHB) is a young bank, having just been transformed from a rural bank in to an urban bank; key conditions such as chartered capital, banking technology, management experience and human resource are still very limited Therefore, in order to increase the position and competiveness, taking market shares of modern banking, SHB needs an appropriate business strategy From that reality, we have selected the topic: “Business strategy formulation for Saigon-Hanoi Commercial Joint Stock Bank in the period 2010 - 2015” as our research topic II RESEARCH OBJECTIVE OF THE TOPIC The objective of the topic is to analyze the reality of SHB in 2007 - 2009 and propose strategy for 2010 - 2015 with solutions to implement The first important task of this capstone project report is to make a research of general theory of banking business strategy, selecting a standard strategic management model for analysis Based on this model, the report shall assess the current situations of SHB in the period 2007 - 2009 Finally, the report shall propose business strategy for SHB for 2010 - 2015 based on the selected standard model and assessment of the actual situations of the bank III SUBJECT AND SCOPE OF RESEARCH Research subject To make a research of actual issues arising during the formulation of business strategy of SHB Space scope: Saigon-Hanoi Joint Stock Commercial Bank (SHB) Time scope: During the period 2007 - 2009 -5- Capstone Project Report - GAMBA.X01 - Group Research methodology - Desk study: o To seek, collect, review and select theoretical documents applied for the assignment o To seek, collect, analyze and evaluate documents and data of business environment - Collection of primary ìnformation: o To collect opinions by directly ask the staff and management to evaluate the business environment assessment as well as capabilities of the Company o To consult knowledgeable experts IV REPORT STRUCTURE The report comprises of chapters: Chapter 1: Theoretic bases to formulate a business strategy Chapter 2: Actual business performance of Saigon-Hanoi Joint Stock Commercial Bank Chapter 3: Business strategy formulation for Saigon-Hanoi Joint Stock Commercial Bank in the period 2010 - 2015 -6- Capstone Project Report - GAMBA.X01 - Group CHAPTER I THEORETIC BASES TO FORMULATE A BUSINESS STRATEGY 1.1 OVERVIEW OF A BUSINESS STRATEGY 1.1.1 Definition 1.1.1.1 Definition There are many definitions about “business strategy” However, we should review some definitions of business strategy by some scholars to withdraw some key characteristics of a business strategy According to Alain Threlart “Strategy is the art which the company uses to fight against competition and win success” According to Chandler (1962), strategy “is the establishment of key long term targets and objectives of the company and the application of a series of actions as well as allocation of necessary resources to reach those targets and objectives” Johnson and Scholes has the following definition of business strategy: “Strategy is directions and scope of one organization in long-term to gain competitiveness through allocating its resources in the changing environment, to meet with the market’s demands and satisfy expectations of stakeholders” The above-mentioned definitions draw the following conclusion: A company’s strategy is a totality of decisions and actions relating to the selection of means allocation of resources to reach targets In a competitive environment, the key target of the company is to reach better strategic position than its competitors In order to reach this, the Company must create the harmony of all actions to establish and maintain its competitiveness in long term -7- Capstone Project Report - GAMBA.X01 - Group 1.1.1.2 Basic characteristics of a business strategy Business strategy defines basic targets and directions for the business of the company in each period of time The orientation characteristic of the business strategy is to ensure the company to develop continuously and soundly in a changing business environment Business strategy is to mobilize to the maximum and to coordinate to the optimum the use of company’s resources at present and in the future, bringing into full play all advantages and grasping opportunities to gain better position in competition Company’s business strategy formulation is an on-going process, it is oftern formulated for a long period of time (for 3, 5, 10 year) Business strategy is always of forward-moving characteristics, to win in the business battlefield 1.1.2 Classification of business strategies Depending on different points of views, there are different strategies depending on levels However, the most popular are the following levels: - Company-level strategy: to aim at targets and comprehensive scope at organization-wide level It defines actions that the Company should take to gain advantages in competition by selecting and managing a series of different business activities, competing in some sectors and products or markets - Business unit-level strategy: is a totality of commitments and actions which helps the company to gain competitive advantages by using their core competences focusing on specific products and markets It reflects the company’s belief in the locations and the ways which it can gain competitive advantages over its competitors The important thing of a business strategy is “the selection of actions to make difference or to something different from competitors” - Functional strategy (or operational strategy): is a strategy to help effectively implement the business unit-level and the Company-level strategy due to -8- Capstone Project Report - GAMBA.X01 - Group components in terms of resources, processes, staffs and necessary skills This is the strategy to improve effectiveness of key operations such as manufacturing, marketing, material management, R&D … 1.1.3 Factors affecting the strategy of a Company Strategic management comprises of stages: - Strategy formulation - Strategy implementation - Strategy monitoring - Strategy adjustment Those stages are affected by many factors, which can be grouped into groups of factors: Internal and external environment In each of those environments, there are factors directly affecting the strategy In practice, those factors are changing and interactive, creating opportunities and risks that the company may face Therefore, the assessment of external environment is one part of strategy formulation and helps the company to take opportunities and to limit risks that the environments bring about 1.1.3.1 External environment This is a group of elements creating opportunities and threats that businesses face in competitive conditions The elements of external environment are divided into two major groups, macro and micro environment A Macro environment (1) Macroeconomic environment: Determines the health and prosperity of the economy It always causes effects on businesses and industries It refers to the nature and development of an economy in which businesses are operating In fact, businesses, especially banks usually pay attention to economic factors through economic variables such as growth trend of -9- Capstone Project Report - GAMBA.X01 - Group general domestic products (GDP), inflation rate, base rate, the availability of the credit system, the level of disposable income and consumption trends of the people (2) Technology environment: With a spreading and diversified space, technological changes affect many parts of the society For banking, technology may allow banks to provide the best modern banking services (3) Cultural and social environment: In relation to the social attitudes and cultural values The same as technology changes, social changes have created opportunities and threats, because cultural values and social attitudes create foundation of the society, it often leads changes in terms of technology, politics - law, economics and demographics (4) Demographic environment: Demographic Segments in the macro environment relate to population, age structure, geographic distribution, ethnic communities, and income distribution (5) Law and Political environment: Greatly affects levels of opportunities and threats The bank must always carefully analyze philosophies and new policies relating to banking activities such as interest rate policy, exchange rates, foreign exchange management, taxes, debt management, etc (6) Global Environment: Including related global markets, current changing markets, important international political events, institutional characteristics and basic cultures on the global market B Micro-environment, industry environment: Having been proposed by a Harvard professor, Mr Michael E Porter, and become popular to company strategists According to Michael E Porter there are five elements to create competition in an industry These factors are: (1) the emergence - 10 - Group Dissertation - GAMBA.X01 - Group Applying a modern organizational Strategy of organizational structure and structure model, formulating human human resource development resource training programs, especially for middle and high level managers Strategy of increasing competitiveness Increase financial capacity, using new technology and promote comprehensive cooperation and strategic partnership with major shareholders With the limited internal resources, SHB cannot implement strategy groups at the same time Therefore, in order to reach the target to “become a leading Vietnamese modern multi-functional retail bank with modern technology, professional human resources, extensive country-wide network ” SHB needs to prioritize the strategy of “market development and network expansion” based on SHB’s following advantages: - Financial strength: Being listed on Hanoi Stock Exchange, SHB has a lot of favourable conditions to raise 1,500 billion dongs of chartered capital in 2010 by issuing additional shares and issuing 1,500 billion dongs of convertible bonds to be converted into shares in 2011 to increase chartered capital to 5,000 billion dongs Among the 3,000 billion dongs of new chartered capital in 2010 and 2011, SHB plans to use 10% of the new capital (equivalent to 300 billion dongs) to establish new branches and transaction offices - HR: Currently, SHB has a team of young and enthusiastic staffs, especially key staffs being Heads and Deputy Heads of Department at Head Office, in charge of key businesses such as: credit, accounting, payment, internal control, etc., who are willing to be rotated to new areas and locations under requests of the bank This team of staffs is the core to develop new branches and transaction offices, to maintain the operations and business of those new branches and transaction offices in the following to 12 months, before transferring to the Branch/Transaction Office managers to come back to their work at Head Office 74 - 74 - Group Dissertation - GAMBA.X01 - Group - Modern Technology: Currently, modern technology allows SHB to establish new branches and transaction offices at a very large quantity SHB’s database is centralized, which facilitates good corporate governance and management and ensures business continuity - SHB’s brand name: SHB’s brand name is strongly recognized nation-wide, which helps SHB to expand markets in new cities and provinces efficiently 3.3 SOLUTIONS TO IMPLIMENT SHB’S BUSINES STRATEGY IN THE PERIOD 2010 - 2015 In order to implement the 2010-2015 business strategy, SHB should take the following measures: 3.3.1 Increase financial capacity As explained in Chapter and 2, owner’s equity plays an important role in activities of banks; it helps banks to increase their financial capacity under international standards SHB’s chartered capital is VND 2.000 bn, one of banks with chartered capital from VND 2.000 bn to VND 3.000 bn, higher than 16 banks with chartered capital lower than VND 2.000 bn but lower than 13 banks with chartered capital higher than VND 3.000 bn According to the Credit Institution Law, single customer exposure can not exceed 15% of equity Therefore, a bank of small equity cannot expand credits and guarantees especially in meeting with funding needs of general corporations and groups Therefore, in order to increase financial capacity, SHB can increase equity by the following solutions: - First, to increase tier capital: Issuing additional shares to increase chartered capital, collect bad debts that have already been risk-settled (moved to the off balance 75 - 75 - Group Dissertation - GAMBA.X01 - Group sheet) Increase capital from profit distribution of the bank, this is a long term sustainable important solution - Second, to increase tier capital: Continue to issue bonds at competitive interest rates to increase tier capital; re-valuate fixed assets, especially real estate assets, to quickly and efficiently increase tier capital - Paying attention to credit risk provisioning This is an important solution to help SHB to keep capital in business, timely settle problem loans, create sound bases for the bank in monetary trading - Seriously comply with SBV’s prudential and liquidity regulations in banking, establishing liquidity limits as tools to respond to liquidity problems; it is necessary to formulate a liquidity contingency plan Timeline to implement this solution is as follows: In 2010, to raise chartered capital by VND 1,500 billion by issuing additional shares and to issue VND 1,500 billion worth of convertible bonds; in 2011 to convert VND 1,500 billion worth of convertible bonds into shares to increase chartered capital to VND 5,000 billion In 2014, to raise chartered capital by VND 1,500 billion by issuing additional shares and to issue VND 1,500 billion worth of convertible bonds In 2015, to convert VND 1,500 billion worth of converbile bonds into shares to increase chartered capital to VND 8,000 billion 3.3.2 Complete and develop consistently the IT systems The IT system allows banks to bring high quality banking services and products to customers Therefore, SHB needs to: - Continue to complete the INTELLECT system in all branches and transaction offices to increase the accessibility and information extraction to serve customers As of end 2011, to finish the banking modernization project in the whole SHB system - Continue to improve and increase the role of systematic management: the more modern the banking system is, the more it requires for technical facilities to meet with development, especially IT facilities Further reform management methodology, and 76 - 76 - Group Dissertation - GAMBA.X01 - Group train skills and operations of staffs to fully take advantage of the modernization program Complete regulations and procedures to prevent operational risks Modernize and apply IT applications 3.3.3 Diversify products and services SHB needs to expand its product portfolio by the following measures: - Considering traditional products (credits and deposits) as development background for SHB - Do research on markets and customer needs, being flexible in each market segments to provide products in line with each market segment, each customer type (by income or by geography ) - Do research to issue products to connect to customers, especially strategic customers (such as Vinacomin, VRG, T&T Group ), who have big capital, advantages in export, services provided and customer base - Diversify new products of high utility, in line with the general trend of modern banking, especially products based on modern IT platform such as Cards, Mobil Banking, Internet - Banking SHB needs to invest in the card issuance, management and payment systems, as well as develop card reception terminals 3.3.4 Increase service quality Currently, service quality is considered as one of the factors to attract customers Formerly, when banking business was simple and less developed, customers had to go to banks However, at present, when banking sector is one of the most developing sectors, banks needs to go to customers The development of the stock market and the real estate market… with a series of new products at high quality has led to the decline in market shares of banks in general and SHB in particular The main reason for this decline is that service quality is not sufficient, having not met with customer needs satisfactorily In order to improve service quality, SHB needs to: 77 - 77 - Group Dissertation - GAMBA.X01 - Group Establish a human resource of professional expertise and morality, high responsibility, serious and integral working manner and open attitude towards customers Staffs need to understand and be aware that “customers are attached to the existence and development and the bank” Banking staffs are the ones who hold the support of customers to the bank and make customers more loyal to the bank SHB needs to improve transaction procedures towards being more convenient and friendly to customers, making customers feel comfortable when doing transactions with the bank Continue to improve and establish competitive fee schedules, with different priorities given to different types of customers Complete the IT platform to ensure correctness, timeliness, and security of customers’ assets when they come to SHB Each branch and transaction office needs to have a dedicated team of staffs to provide guidelines and answer enquiries of customers in the most professional way to ensure mutual benefits of both customers and SHB 3.3.5 Expand network For banks, especially young banks, expansion of branch and transaction office network is the prerequisite to increase market shares in the hard competition in the banking market SHB’s development orientation is to become a leading multi-functional modern retail bank in Vietnam with modern technology, professional staffs, extensive countrywide network, bringing to partners and customers the most useful and packaged banking products and services at reasonable costs and high service quality Therefore, network expansion has become very critical Right from this moment, SHB needs to establish an extensive network However, network expansion should be consistent with financial capacity, business capacity, human resource and operation scale Besides the establishment of level one branches and transaction offices serving strategic shareholders, SHB needs to select potential markets in key economic locations such as: Hue, Nha Trang, Vung Tau, Lang Son, Lao Cai ; industrial zones in big cities 78 - 78 - Group Dissertation - GAMBA.X01 - Group such as: Vinh Phuc, Hung Yen, Bac Ninh, Chu Lai, Binh Duong, Quy Nhon, Đong Nai By 2015, SHB to reach 50 branches and 300 transaction offices in provinces and cities country-wide 3.3.6 Complete the organizational structure and increase human resource quality - Complete the organisational structure: By 2011, SHB needs to complete its organizational structure model under the Group model in Head Quarter The organizational structure should meet with the requirements of simplicity and efficiency to ensure smooth and safe operations - Increase quality of human resource: Formulate and implement staff training and re-training programs, planning the human resource teams in the whole SHB towards being neatly and efficient + First, priority should be given to training the management team with advanced and professional training programs so that managers can have full management and governance capacity to manage a modern bank + To allocate reasonable budgets at around 2% of total profits (in 2009 SHB just allocated 0,25% of total profits) to implement staff training and re-training programs in specialized subjects, English, legal issues, bank marketing, business arts, communication skills of a modern banker… which helps banking staffs to increase their expertise as well as change their mentality at work + Review SHB’s current human resource, breakdown human resource by levels of expertise to assign tasks in line with staff capability Regularly check and evaluate performance of each unit From the evaluation, staffs can be re-allocated or rotated to a more suitable position, helping staffs to promote their innovativeness and accountability for their own decisions By that way, staff performance evaluation and task assignment can be made appropriately + Have a talent attraction strategy: Issue special treatment policy for well-expertised and well-experienced staffs in international management or internationally trained in 79 - 79 - Group Dissertation - GAMBA.X01 - Group bank corporate governance, which helps for experience and know-how transfer from international banking into SHB + Improve HR quality right from the recruitment stage: Conduct transparent recruitment and setting out appropriate requirements in line with job description; formulate a compensation system in consistency with contribution of staffs to the bank; issue preferential policies to promote work productivity of staffs with long term commitments to the bank SHB needs to formulate a training strategy and high level HR development program in line with SHB’s actual situations and development of the Vietnamese economy in the coming decade In order to attract HR to meet with management requirements and development of a modern bank, SHB needs to step by step complete its HR management mechanism: performance evaluation should be attached with compensation systems (performancebased compensation); to formulate and implement skill training program such as TEAM WORK skills, skills to increase customer service quality; to establish KPIs for each type of staffs for the purpose of performance-based management and business promotion SHB should head for a corporate culture of core values to be “standards” to establish a friendly and professional working environment, grouping a team of wellexpertised, well-experienced, skilful and professional staffs 3.3.7 Marketing Solution: SHB’s operating principles: SHB always treat customers with professional and modern serving manner SHB commits to provide customers with diversified, convenient, friendly, quick and efficient products and services Customers are both fund providers for banks and users of funds of banks Therefore, doing research of customers is the most important task in increasing the efficiency of fund using of banks SHB, the same as other commercial banks, since the market economy, has always paid attention to customer policy: Customers are treated fairly; there are many programs to encourage customers, both depositors and borrowers 80 - 80 - Group Dissertation - GAMBA.X01 - Group From the reality, SHB needs to formulate a customer strategy with the following key contents: First: customer classification To classify customers for the purpose of better customer management Criteria to classify customers: - Depositors, include: + Companies operating in different sectors + Non-profit organizations and associations + Individuals and Households: When the economy grows and develops, people will have higher income This income is in the hands of individuals and households in the society - Borrowers: Lending is an important business of SHB, creating 80% of SHB’s revenues and contributing 30% to profits In order to have high profit, SHB needs to lend to efficient loans, i.e loans that are recoverable of both principles and interests in due time This is very critical to SHB because it is largely dependent on SHB’s borrowers Therefore, SHB needs to have a methodology to select borrowers, in order to limit counterparty risks to the minimum Second: To establish good and long term relationship with customers, especially strategic shareholders Good and long term relationship with customers shall help the bank: + Grasping all customer information, saving costs of appraisal and monitoring/control + Atracting different funding sources to consolidate inputs and expand inputs under customer’s requirements 81 - 81 - Group Dissertation - GAMBA.X01 - Group + Issuing strategies and tactics in each period of time and corresponding to the development trend of the bank in the future + Formulate a specific action plan with strategic shareholders to realize signed commitments Third, to implement customer attraction strategy through promotional encouragement, especially newly established Small and medium enterpries + SHB needs to launch promotion campaigns on the occasions of big holidays + To issue policies to support newly established enterprises, preferences given to customers using many service packages of SHB + To research on competitors based on frequent comparison of products, interest rates, advertising activities and network Those competitors are: Sacombank, ACB, and Techcombank… By this research and comparison activity, SHB can define its own advantageous and disadvantageous areas of competition Based on research results, SHB should be active in formulating business strategies in parallel with competitors and not hitting competitors at the behind Forth: to develop brand name – culture - In order to have good business performance, the basic thing is that the bank should be closer to customers Bank branches need to increase advertising and enhancing the image and brand name of SHB to the public via provision of most convenient services and products to best meet with customer’s needs The attitude and serving manner should always be renewed, making different impression about SHB in customers, thus helping to maintain and retain customer relations, gaining customer’s favors and bringing about reputation and belief in the branch - To hire professional consultants to design the system of company recognition such as slogan, logo, teller design, exchange rate quoting screen, seating rows for waiting customers… Those should be consistent in the whole system Fifth: Increase advertising: 82 - 82 - Group Dissertation - GAMBA.X01 - Group - Besides advertising via SHB - Đa Nang Football Club, SHB needs to increase information to the public via leaflets on the characteristics of each product and service in a brief way to help customers updated with the Bank’s services and products From that, customers can understand the ways to use and benefits of those services and products - SHB should hire professional advertising companies to design contents and increase advertisements on public mass media such as Television, internet … and advertisements in public areas such as airports and train stations… - SHB’s own staffs can persuade companies and individuals that they know and have relationship with to deposit or to borrow from the Bank Staffs are those who most understand the Bank’s services and products and have direct transactions with customers; therefore they can be successful in informing and persuading customers better than any other forms of advertisements - Periodically SHB should organize customer conferences Via those conferences, SHB can better understand about customer’s needs as well as receive customer’s feedbacks to product and service quality of the Bank From that, SHB can bring about solutions to better serve customers and increase SHB brand name 3.4 TIMELINE TO IMPLEMENT STRATEGIC SOLUTIONS Table: 3.5 Timeline to implement strategic solutions SOLUTION TIMELINE 2010 2011 2012 2013 2014 2015 Increase financial capacity Of which: Increase chartered capital Make provisions for credit risks Complete and consistently develop the IT systems Of which: To complete the systems To improve and enhance management 83 - 83 - Group Dissertation - GAMBA.X01 - Group Diversify products and services Of which: To increase quality of traditional products To develop new products with modern technology applications Increase service quality Expand network Complete the organization model Of which: To complete the organization model To increase HR quality Marketing Of which: To formulate a customer strategy To develop brand-name In accordance with the above timeline of implementing strategic solutions, SHB needs to conduct the following groups of solutions at the following timeline levels: -Group of immediate solutions: including all solutions that need to be implemented in 2010 and 2011 - Group of regular solutions: including all solutions that need to be implemented from now to 2015, those are solutions that need to be maintained and regularly done and adjusted in line with changes in the actual market 3.5 SOME RECOMENDATIONS Currently, the SBV and the Government still play an important role in macro economic management Therefore, an appropriate economic orientation combined with 84 - 84 - Group Dissertation - GAMBA.X01 - Group completed monetary and fiscal policies shall ensure sustainable development of the economy This will be largely used by credit institutions in their business strategy and development strategy formulation Moreover, the roles of the SBV and the Government have become more and more important due to the international integration of the economy When WTO commitments become effective, competition pressure and bankruptcy possibilities will increase, leading to economic instability In order to ensure sustainable development of the economy and fair competition for banks in general and for SHB in particular, it is proposed that the SBV and the Government should the followings: First, to have a flexible monetary policy, to increase the efficiency of monetary policy via Open Market Operations (OMO), re-discounting, re-financing instruments Combine closely monetary policy with fiscal policy, control all capital inflow into the economy, especially capital from the State budget and non-banking financial institutions Second, to promote the role of the SBV in supervising and monitoring operations of credit institutions, ensuring safe and efficient banking business, avoiding unhealthy competition among credit institutions Third, to quickly complete the SBV organizational system under the direction of transforming the SBV to become a real central bank To increase the relative independence of the SBV from the Government to enhance the efficiency of monetary policy, to establish the roles and autonomy of the SBV in formulating and managing monetary policy To revise and complete legal framework and regulations for the monetary market, reducing the overlapping among laws and regulations in banking to ensure a consistent and stable banking legal environment Those revisions should take into account the interaction and compliance with best international practices 85 - 85 - Group Dissertation - GAMBA.X01 - Group 86 - 86 - Group Dissertation - GAMBA.X01 - Group CONCLUSION The system of Vietnamese commercial banks have been developing both interms of quantity and quality, competition is harsh among banks Especially in the context of integration and globalization, Vietnamese commercial banks are facing many opportunities as well as difficulties and challenges The period from 2010 to 2015 in the economy in general and in the banking sector in particular will witness changes in nature in the competition environment – the transition from domestic competition to international competition The pressure of international economic integration forces banks, including SHB, to be prepared for integration and development In that trend, SHB is required to make timely adjustments to stay firmly and develop in the spiral circle of competition Therefore, SHB needs to have strong internal strengths and appropriate directions to successfully integrate in the general environment Based on Strength-Weakness, Opportunities-Threats analysis of SHB, the topic has set out business strategies for SHB In order to implement those strategies, SHB needs to focus on the following groups of solutions: human resource development, distribution network, marketing, technology, re-structure of the organizational structure, establishment of corporate culture, construction of infra structure and technical facilities However, business environment is changing, therefore SHB needs to regularly check and assess the outcomes of those solutions to make appropriate adjustments ………………………………………………… 87 - 87 - Group Dissertation - GAMBA.X01 - Group REFERENCE MATERIALS Dr Prof Lê Thế Giới – Dr Nguyễn Thanh Liêm - MA Trần Hữu Hải (2009), Strategic Management, Statistics Publishing House Dr Prof Đào Duy Huân (2010), Strategic Management in economic globalization, Statistics Publishing House http://nghiencuumarketing.com(2009), Guidelines to construct some matrixes Saigon Hanoi Commercial Joint Stock Bank (2010), Prospectus Saigon Hanoi Commercial Joint Stock Bank (2007, 2008, 2009), Audited reports 88 - 88 - ... SHB Picture 2.1 Organization Structure - 27 - Capstone Project Report - GAMBA.X01 - Group - 28 - Group Dissertation - GAMBA.X01 - Group 2.1.3 Products and services In recent years, SHB has attempted... 80 3.5 SOME RECOMENDATIONS .85 CONCLUSION 87 -2- Capstone Project Report - GAMBA.X01 - Group LIST OF ACRONYMS ATM Automated teller machine APEC Asia-Pacific Economic Cooperation... Information Technology HR Human Resource SBV State Bank of Viet Nam -3- Capstone Project Report - GAMBA.X01 - Group LIST OF PICTURES AND TABLES Picture 1.1 Strategy formulation process under SWOT…………………
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