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GRIGGS UNIVERSITY GLOBALADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT DEVELOPING BUSINESS STRATEGIES OF VIETNAM COMMERCIAL JOINT STOCK BANK FOR INDUSTRY AND TRADE – CUA LO BRANCH (VIETINBANK CUA LO) IN THE PERIOD OF 2011 - 2015 Group No.11 Student’s name: Ho Xuan Bay Nguyen Ngoc Thanh Ha Xuan Quang Nguyen Tuan Dung Hanoi, 2011 TABLE OF CONTENTS INTRODUCTION General context, the necessity and the urgency of the research Subject and purpose of the research Research methodology .7 Structure of the capstone: CHAPTER I THEORETICAL FOUNDATION OF BUSINESS STRATEGY .7 1.1 Business strategy 1.1.1 Definition of business strategy 1.1.1.1 Different definitions of business strategy .7 1.1.1.2 Basic characteristics of business strategy .8 1.1.2 The role of business strategy for an enterprise: .9 1.1.2.1 Focusing development .10 1.1.2.2 Three competitive strategies .10 1.1.2.3 Competitive strategies for enterprises based on market share and position: .10 1.2 Process of developing strategy 11 1.2.1 Defining the mission and objectives 11 1.2.2 Analyzing external environment 12 1.2.3 Analyzing the enterprise’s internal environment 12 1.2.4 Developing the strategic alternatives .12 1.2.5 Analyzing and selecting strategies 13 1.3 Tools for strategic analysis 14 1.3.1 Using PEST Method to analyze macro factors 14 1.3.2 Using Michael Porter’s Five Forces of Competition to analyze micro factors .15 1.3.3 Using EFE Matrix to analyze the Opportunities and Threats 15 1.3.4 Using IFE Matrix to analyze the strengths and weaknesses 15 1.3.5 Using SWOT Matrix to qualitatively analyzing the strategy 16 V0110.CapstoneProjectReport.Group11 1.3.6 Using QSPM to analyze and select strategies 17 CHAPTER II .18 BUSINESS ENVIRONMENT SITUATIONS OF .18 VIETINBANK CUA LO .18 2.1 General introduction 18 2.1.1 Establishment and development history 18 2.1.2 Organizational chart 19 2.1.3 Distribution network .20 2.1.4 Service offerings 21 2.1.5 Business performance throughout the years 22 2.2 Analysis of factors affecting the operations of VietinBank Cua Lo .23 2.2.1 Macro environment (PEST model) .23 2.2.1.1 Economic environment 23 2.2.1.2 Socio-cultural environment 27 2.2.1.3 Political and legal environment 28 2.2.1.4 Natural environment 29 2.2.1.5 Technological environment 29 2.2.2 Micro environment (industrial) – M Porter’s Five Forces 30 2.2.2.1 Competitors 32 2.2.2.2 Customers 35 2.2.2.3 Suppliers 36 2.2.2.4 Potential competitors 37 2.2.2.5 Substitutes 38 2.2.3 Evaluation of opportunities and threats 39 2.2.4 External Factor Evaluation (EFE) Matrix .40 2.3 Analysis of internal factors of VietinBank Cua Lo 41 2.3.1 Human resources 41 2.3.2 Marketing 42 2.3.3 Organizational structure 43 2.3.4 Management capability 43 V0110.CapstoneProjectReport.Group11 2.3.5 Financial capability .44 2.3.6 Research & Development .44 2.3.7 Information technology 44 2.3.8 Evaluation of strengths and weaknesses 45 2.3.9 Internal Factor Evaluation (IFE) Matrix 46 2.4 Matrix analysis 47 2.4.1 SWOT matrix analysis 47 2.4.2 Proposed strategies from the SWOT Matrix 48 CHAPTER III 49 BUSINESS STRATEGY SELECTION AND IMPLEMENTATION SOLUTIONS OF VIETINBANK - CUA LO BRANCH FOR THE PERIOD OF 2011 - 2015 49 3.1 Business goals and objectives of VietinBank - Cua Lo Branch 49 3.1.1 General goals 49 3.1.2 Specific objectives by 2015 49 3.2 Selection of feasible business strategies 49 3.2.1 Selection of strategic alternatives 49 3.2.2 Business strategy determination 51 3.2.3 Strategic position of Cua Lo Branch in comparison with the system of Vietinbank .52 3.3 Strategy implementation solutions 52 3.3.1 Human resource development solutions 52 3.3.1.1 Human resource recruitment improvement 53 3.3.1.2 Employee training and retraining .53 3.3.1.3 Human resource management and reward & compensation policies .54 3.3.2 Marketing solutions .54 3.3.2.1 Market research 55 3.3.2.2 Marketing Mix 56 3.3.3 Technology solutions .59 3.3.4 Developing organizational culture 59 3.3.5 Developing infrastructures and facilities .61 V0110.CapstoneProjectReport.Group11 3.4 Implementation progresses 61 3.5 Potential problems and solutions 62 CONCLUSION 63 BIBLIOGRAPHIES 63 LIST OF TABLES AND FIGURES Figure 1.1 Table 1.1 Table 1.2 Table 1.3 Figure 1.4 Figure 2.1 Figure 2.2 Table 2.1 F.David’s Model of Strategic Management EFE Matrix IFE Matrix SWOT Matrix Quantitative Strategic Planning Matrix Organizational chart of VietinBank system Organizational Chart of VietinBank Cua Lo GDP growth rate of Vietnam and regions including Nghe An and Cua Lo as a function of time Table 2.2 Figure 2.3 Table 2.4 Table 2.5 CPI of Nghe An as a function of time Summary of the macro factors influencing Vietinbank Cua Lo Comparison of Vietinbank branches in Nghe An Comparison of Vietinbank Cua Lo with branches of Figure 2.6 Table 2.7 Table 2.8 Table 2.9 Figure 3.1 Vietcombank, BIDV, Agribank in Nghe An Summary of micro factors influencing Vietinbank Cua Lo The EFE Matrix of VietinBank Cua Lo The IFE Matrix of VietinBank Cua Lo The SWOT Matrix of VietinBank Cua Lo Internal - External Matrix (IE) of VietinBank Cua Lo INTRODUCTION General context, the necessity and the urgency of the research The current context of global economic crisis such as debt ceiling issues in the United States and many European countries have strong impact on the world’s financial market V0110.CapstoneProjectReport.Group11 Because of the fact that Vietnam gradually integrates into the world’s economy, all the fluctuations of global economy also have impacted significantly to the economy of Vietnam The banking system of Vietnam has faced many difficulties since early 2001 till now Firstly, it is the force to reach the target of controlling the increasing inflation Banking system has to face liquidity difficulties, and it is difficult for every bank, even the biggest ones, which are considered to be the market makers Secondly, if the interest rate was completely decided by the banks in the past, this role, now, is transferred to customers, especially customers who hold a huge amount of Vietnam Dong (VND) However, it is the state organizations that bargain for interest rate the most There is institution that organized bidding for capital cost for deposit, and the winner would be the bank that offers the higher payment Thirdly, it is merging and acquisition in banking sector For many years, observing the low liquidity and weak financial situation of many banks, which resulted from unhealthily quick growth, under-standard lending and low safety ratio, many people have asked for, in these cases, to conduct merging and acquisition, resale or announce bankruptcy in order to make the market grow strongly again, however, it has never happened since Fourthly, the foreign currency exchange market, after few years of chaotic rate variability, it is now settled down through series of decisive action However, far behind that success was the power of the administration, instead of tools with regulating senses In this context, many banks have to develop or adjust their business strategies to suit the market conditions Vietnam Joint Stock Commercial Bank for Industry and Trade - Cua Lo Branch (Vietinbank Cua Lo) is one of the best-operated branches in the Vietin Bank system of Nghe An province and the whole Vietin Bank in general However, in the volatile situation of the market and severe competition, Vietinbank Cua Lo has to build their own business strategy to develop and compatible with the strategy of the Bank’s overall system V0110.CapstoneProjectReport.Group11 Subject and purpose of the research - Subject of the research: Vietinbank - Cua Lo Branch - Purpose of the research: Developing business Strategies for Vietin Bank Cua Lo in the period of 2011 – 2015 and propose solutions to make it become the 1st ranking branch in the Vietinbank system Research methodology - References: primary and secondary data, data of Vietinbank Vietnam, Vietinbank Cua Lo, Reports of the People’s Committee of Nghe An - Province Analyzing technique: IFE, EFE, SWOT and QSPM matrices, Michael Porter’s five forces model of competition Structure of the capstone: Chapter 1: Rational foundation of business strategy Chapter 2: Business Environment situations of Vietin Bank Cua Lo Chapter 3: Business strategy selection and implementation solutions of VietinBank – Cua Lo for the period of 2011 - 2015 CHAPTER I THEORETICAL FOUNDATION OF BUSINESS STRATEGY 1.1 Business strategy 1.1.1 Definition of business strategy 1.1.1.1 Different definitions of business strategy Alain Threlart stated that "Strategy is the art that an enterprise uses to stand against competition and win" V0110.CapstoneProjectReport.Group11 According to M Porter, "Strategy is the art of building solid competitive advantages to defense" For these reasons, the authors considered business strategy as a kind of art to compete in the market and develop the enterprise According to the viewpoint of management, business strategy is a kind of plan: - G Arlleret stated that "Strategy is the determination of the roads and the means to achieve the objectives defined by the policy" - D Bizrell et al defined strategy “as a general plan or direction that leads the enterprise to the desired goal It is the basis for the elaboration of the policies and operational measures " - Gluecl stated that: "The strategy is consistent, comprehensive and integrated plan designed to ensure that the enterprise’s objectives will be implemented According to the perspective of consistency: - "Strategy is the art of coordinating activities and controlling them to achieve long-term goals of the enterprise" - Chandler defined that “strategy involves defining basic long-term goals of the enterprise and in the same time choosing the mode or courses of actions and allocate the necessary resources and implement those goals” In an enterprise: "Strategy is the art of organizational design aimed to facilitate long-term goals of the business and it has the relationship with the change of business environment and competitiveness” There are many definitions of Business strategy and each scholar has his own approach and research method However, it can be seen that all of these definitions have a common point “Business strategy involves competing to achieve business goals” In this capstone project, we synthetize and apply the concept of business strategy through its characteristics and role 1.1.1.2 Basic characteristics of business strategy - Business strategy determines the basic objectives and business direction of the enterprise in a specific period V0110.CapstoneProjectReport.Group11 - The orientation of the strategy is to ensure the continuity and firm of the development in the constantly fluctuating business environment - Business strategy ensures to mobilize at het maximum and combines at the optimal of extraction and use of enterprise resources at the present and in the future It also promotes the advantages and seizes the opportunity to competition - Business strategy an enterprise is reflected throughout a continuous process - Business strategy always peruses attacking thoughts in order to win in the marketplace - Business strategies are often built in a long period of time (3, to 10 years) 1.1.2 The role of business strategy for an enterprise: - Business strategy helps the enterprise to identify the purpose and its basic direction as the guideline for all manufacturing and business activities of the enterprise Business strategy plays an orienting role in the long-term operation of the business; it is a solid basis for the deployment of the operation The lack of strategy or when strategy is unclear or when there is no solid argument will make the operation of the enterprise lost its way There are many problems that can only be seen in the immediate future but could not be associated with long-term plan and cannot be seen as the main role in the whole activities of the enterprise - Business strategy helps the enterprise understand and take advantage of business opportunities, and in the same time take measures to overcome the risks and threats in the competitive marketplace - Business strategy contributes to improve the efficient use of resources, enhance the competitive position of the enterprise and ensure its sustainable development - Business strategy creates a solid basis for the proposal of policies and decisions for suitable production that work in accordance with the fluctuation of the market It forms a solid basis for research and development, investment and development of personnel training, expanding the market and product development In fact, most of the mistakes in investment, technology, markets come from developing strategy or any problems in determining strategic objectives V0110.CapstoneProjectReport.Group11 The foundation for success or failure depends on an important factor of how the enterprise’s business strategy looks like 1.1.2.1 Focusing development This strategy is to improve the competitive position of enterprises in comparison with the existing products based on enhancing marketing activities or changing the existing market strategy without changing the product It comes in three main strategies: - Market penetration: increase the market share for available products and services available in the market through marketing activities - Market development: Provide products and services available in the new area - Product development: Increasing in sales, innovating in available products and services 1.1.2.2 Three competitive strategies Cost-leading strategy Cost-leading strategy is driven by the overall action to provide products or services that have the characteristics accepted by customers with the lowest cost compare to all competitors Product differentiation The objective of the differentiation strategy is to gain the competitive advantage for the enterprise through creating products (goods or services) that is unique in some features to the customers Enterprise that tries to make the difference to satisfy the customers in a way that no competitors cannot offer higher price (a significantly price that is above the industry’s average) Focus strategy Focus strategy is the third among three generic competitive strategies The main difference with the two strategies is that it is directed to serve the needs of a group of customers A focus strategy will work on a specific market gap that can be determined in terms of geography, customer type, or by product segment 1.1.2.3 Competitive strategies for enterprises based on market share and position: V0110.CapstoneProjectReport.Group11 10 relationship executives, marketing executives; have not been paid sufficient attention As a consequence, the efficiency of retail network expansion and customer attraction has been limited 3.3.1.1 Human resource recruitment improvement Currently, Vietinbank has clear recruitment mechanisms; and the bank has assigned Vietinbank School of human resource delelopment and training to be in charge of the recruiment work When having recruitment need, Vietinbank Cua Lo should propose to the VietinBank Head Office with clear human requirements In addition to qualifications and professional capabilities, the recruitment board is particularly interested in self-learning skill and ability, and work responsibility VietinBank Cua Lo will not recruit any unqualified personnels for the purpose of managing relationships 3.3.1.2 Employee training and retraining To successfully implement the retail banking service development strategy, the human resource training activities of Cua Lo Vietinbank should focus on the following key points: - Training, retraining and updating basic business knowledge of market mechanism for the existing employees should be focuses in order to meet the increasingly sophisticated demand for human resources and overcome the pressure of increasingly competitive business environment - The bank should broadly spread the awareness of business culture, corporate culture; identifying, defining and respecting the characterized values of corporate culture based on the ideological and spiritual foundation of Vietnamese business culture - Soft skills and management skills training for middle level and top level managers should be emphasized in order to create a breakthrough in their thinking and management skills towards the market mechanism, paving the way for the deployment of the reformation plans and the acceptance of change at the executive level and implementation level V0110.CapstoneProjectReport.Group11 53 - The bank should diversify the training of professional skills for tellers and customer relation specialists in the transactions points in order to create a modern business style, meeting the requirements and necessary qualities of a retailing network Soft skills training for operational staffs should be attached much attention to turn the knowledge potential into effective performance and maximize the existing resources in the bank - Along with the training of basic knowledge and skills, the bank should pay sufficient attention to the training of foreign languages (especially English) in the transaction offices located in major cities in order to take the opportunity of expanding the business with foreigners when the economy integrates deeply into the world economy; as well as enhance business relationships with foreign banks in Vietnam and other countries in the world 3.3.1.3 Human resource management and reward & compensation policies - It is important to have appropriate employee allocation policies and lay off unqualified and unethical employees out of VietinBank Cua Lo in order to welcome other employees meeting the working requirements - Deploy the People Soft human resource management software of VietinBank - Implement the review of staff allocation in all Divisions, Departments of the Branch in order to organize the work effectively, productively and with higher quality - Implement the staff planning activities for each position and title of all Divisions and Departments in accordance with the policies of VietinBank - Apply work performance management and evaluation program in order to monitor and improve the work performance, thereby motivate the staffs and create positive competition throughout the Branch 3.3.2 Marketing solutions Applying marketing principles in the management of customer relationships is very important This is a business strategy to connect and coordinate skillful people with optimize processes and modern technology in order to balance the two interests: the profits earned by the bank and maximum satisfaction of the customer V0110.CapstoneProjectReport.Group11 54 The following solutions should be implemented in order to improve the marketing efficiency and customer satisfaction: A customer services department, which always gives the customers the feeling of being respected when coming to the bank, should be organized in VietinBank Cua Lo The function of this department is to support new customers to provide information when doing transactions in the bank, to answer questions of customers, to consult and introduce the products and services of the bank to customers, to create transaction culture of an industrial and commercial bank This culture is reflected and expressed through the civilized and courteous style and attitude of the retailing staffs; and through the unique characteristics of the Vietinbank brand identified by its unique uniforms It is also recommended that VietinBank Cua Lo should develop appropriate marketing strategies to promote, advertise and introduce the utilities of available products and services of VietinBank to numerous customers and clients, providing conditions for them to access to this information and create a habit of using the services of VietinBank The bank should expand its services to all types of enterprises regardless of sizes and forms of ownership The bank, on the one hand should maintain the deposit relations with existing customers, on the other hand also needs to attract new customers including joint stock companies, profitable limited liability companies in order to expand and diversify the types of customers ISO standards should be applied in the service sector 3.3.2.1 Market research Market research It is required to analyze and evaluate market potential, formulate capital growth strategy to dominate the market The bank should, by all means, manage the capital resources in the region Based on the analysis and evaluation of financial capability, risk tolerance and business potential of clients, loan and credit conditions suitable for each client will be redefined It is also important to actively search for projects, plans and profitable customers to give loans in accordance with the current credit policy Target market selection V0110.CapstoneProjectReport.Group11 55 For VietinBank Cua Lo, when transforming to the retail banking model, VietinBank Cua Lo should target individual customers in order to expand the market share and minimize business risks; product packages will be a appropriate strategy for the next progress To succeed, VietinBank Cua Lo should accumulate experience from other branches that have successfully deployed the product packages (for example: Ho Chi Minh City Branch with the overseas studying supporting package), as well as be carefully prepared in terms of resources and market characteristic analysis to make accurate pricing decisions 3.3.2.2 Marketing Mix The Marketing Mix consists of elements: Product, Price, Place, Promotions, People, Process, Physical Environment Product + For capital mobilization service - Special attention should be paid to marketing, attracting customers with large deposits in other financial-credit institutions, including public service institutions (People’s Committees; Party, Union, and Military agencies; hospitals and schools ) in and outside the region At the same time, the bank should provide some types of products and services in order to approach these organizations and share their capital sources deposited in other banks - It is suggested that the bank should focus on increasing the deposits mobilized from the population These capital sources which are the foundation for the future growth are considered as stable and extremely important To make this work, VietinBank Cua Lo should be proactive, dynamic and constantly adaptive to market changes Additionally, the bank should apply flexible interest rates as well as attractive sales promotion policies Improving attitudes towards customers and customer-serving manners in order to compete with other rivals is also recommended - The bank should continue to survey and find potential sites to open transaction offices in order to gain market share - A wide range of previously issued capital mobilization products should be deployed fully Tellers should be trained to master the product knowledge and V0110.CapstoneProjectReport.Group11 56 consulting skills; particularly for flexible products to meet the diverse needs of customers - Another important solution is to actively maintain and strengthen the close relationships with existing customers In marketing activities, the staffs should be persistent, persuasive and perseverant It is also important to continuously exploit the capital sources from large organizations and companies that have traditional relationships with the bank + For loan and investment services It is also important to actively search for projects, plans and profitable customers to give loans in accordance with the current credit policy By all measures, the bank should persistently approach and persuade customers to switch their banking services to those of VietinBank Cua Lo in order to increase credit outstanding and bring about operation efficiency to the bank Price In the banking sector, price is the fee that customers have to pay for using the services provided by the bank It is expressed most clearly in the interest rates of the bank Vietinbank Cua Lo should offer competitive interest rates compared to those of other competitors; at the same time, introduce some types of sales promotions and provide some additional services Place (Distribution): Some solutions should be implemented as follows: - Expand the transaction office network in some potential locations, urban areas, industrial zones and commercial centers - Place additional ATM locations and international credit card point of sales in supermarkets and big hotels - Shorten the time customers spend on transactions The transaction offices located in Cua Lo resorts should work all weekends Promotion - The bank should enhance the communication of information to mass audiences via various channels including radio, newspapers and leaflets which introduce briefly and clearly the features of each product/service so that customers can update and understand about the products and services provided by the bank V0110.CapstoneProjectReport.Group11 57 Based on this, customers can learn the usage and benefits of these products and services - The bank should use its staffs and loyal customers to attract and persuade other potential customers who have needs for the bank’s products and services This “words of mouth” method is a low-cost and effective form of advertising because the staffs and loyal customers understand about the advantages and disadvantages of the bank’s products and services This can be considered as a good method to create chain reactions on the bank's reputation - Establish hotlines for customer supports on the bank’s products and services - Organize and carry out social activities in the region to promote the brand and images of Cua Lo Vietinbank - Annual customer conferences should be organized for the bank to honor its customers and learn more about the customers’ needs and wants in order to satisfy and delight them People When interest rates are controlled by the State Bank, banks will compete on the service quality Customers will deposit their money in the bank that has good services and convenient transactions Therefore, special attention should be given to the people factor The solutions of Vietinbank Cua Lo are: - Training each teller to become a consultant - Improving communication skills, customer service attitudes - Equipping transactions employees with full knowledge of the bank’s products and services so that they can consult, answer any questions as well as sell services to customers Process In order to improve the efficiency of operations and process customers’ transactions, Vietinbank Cua Lo will set up and apply the ISO standards to the bank’s operations management The process of dealing with customers’ transactions of Vietin Bank Cua Lo is in accordance with the general process of the Vietinbank System V0110.CapstoneProjectReport.Group11 58 Physical Environment Vietinbank Cua Lo’s transaction offices will be modernly decorated and designed in order to create a comfortable atmosphere for customers - Documents and information vouchers are provided free of charge to customers - Certificates and awards of Vietinbank Cua Lo should be displayed in all transaction offices for customers to recognize the bank’s achievements and prestige, as well as have trust in the bank’s services 3.3.3 Technology solutions VietinBank uses INCAS, a modern and useful software system offering several benefits to banks and customers through online management and interconnection (Cash is deposited in one place but withdrawn everywhere throughout the system of VietinBank) For Vietinbank Cua Lo: - Consolidate and expand network, ensuring smooth operation from headquarters to all transactional offices - Equip all departments and sections with technological equipments to operate smoothly and efficiently, in order to better serve customers and compete with other banks - Regularly monitor the execution of machinery and equipment operation, management and usage regulations 3.3.4 Developing organizational culture Currently, VietinBank has developed the Vietnam Commercial Bank for Industry and Trade cultural handbook issued for the whole system of VietinBank The contents of this cultural handbook address the following issues: Missions, visions, business philosophy of VietinBank: The VietinBank core values are identified as follows: - All activities are customer - oriented; Dynamic, creative, professional, dedicated, transparent and modern; The employees are facilitated to strive, work hard and contribute - They have the right to be rewarded according to the quality, results and V0110.CapstoneProjectReport.Group11 59 effectiveness of individual contributions - Outstanding and hard-working individuals are appropriately honored VietinBank codes of professional ethics Purpose: The codes of professional ethics are based on the fundamental ethical principles and core values of VietinBank in order to guide the behaviors of staffs and managers of all levels in daily communication contributing to the formation of distinctive cultural values of VietinBank Behavioral culture of VietinBank: The following issues are mentioned: - Communication culture includes: greeting culture; communication and exchange culture; listening culture; telephone - communication culture; communication culture between leaders, managers and staffs - Customer Communication Culture includes: introducing and self-introducing culture; business-card using culture; communication culture between tellers and customers; guidelines for communicating with customers - Individual behavior at work refers to: dress code and appearance; walking style; working style; hygiene, internal affairs; attitudes towards work and team; meeting participation attitudes and discipline; behavior when receiving new employees - Office layout and decoration culture - VietinBank Culture in other activities including: annual cultural events; party participation, car usage VietinBank cultural awards The purpose of these awards is to: - To promote and encourage the units and individuals of VietinBank to develop VietinBank cultural spirits in internal and business activities of the underlying units in order to build the brand and cultural images of VietinBank; - To honor and multiply the typical role models of VietinBank culture; thereby, build the brand reputation of VietinBank in the domestic market and further promote the brand to reach the international markets - To establish a common title and logo of VietinBank to develop, maintain and promote the cultural values of VietinBank in the whole system; - To appreciate the cultural values of VietinBank, promote the pride and commitment of outstanding individuals to the organization; V0110.CapstoneProjectReport.Group11 60 - To promote the VietinBank brand name through the cultural images of VietinBank - To establish a cultural festival of VietinBank worthy of a leading financialbanking corporation in Vietnam Generally, the cultural handbook of VietinBank has addressed a full course of basic and distinctive elements of an organization’s culture However, applying this cultural handbook in the daily life and work of each VietinBank staff is not easy VietinBank Cua Lo have to constantly organize training, examination and evaluation on the application and implementation of this cultural handbook This must be regarded as one of the work performance assessment criteria for the employees of VietinBank Cua Lo 3.3.5 Developing infrastructures and facilities Vietinbank Cua Lo needs to invest in the expansion of transaction points in some potential locations These transactions points should be synchronously invested and consistent with the standard design in order to create an impressive image to customers when they come to make transactions with the bank The facilities must be modernized to meet the demand for customer services For example: parking areas should be provided, transactions offices should be spacious and clean, furniture’s should be decorated aesthetically 3.4 Implementation progresses Stage (From the present to the end of 2011): - Focus on employee re-training activities in order to accomplish the objective of transforming to the operation model of a retail bank - Recruit marketing specialists, develop specific marketing programs - Develop customer database - Search sites to open more transaction offices, install ATM machines; prepare the capital sources to invest in those transaction offices and ATM machines Stage (From 2011 to 2012) - Focus on the establishment of at least 03 to 05 transaction points in Nghe An province - Deploy pilot customer consulting services, marketing solutions at 03 transaction offices - Establish Vietinbank ATM points of sales in hotels, restaurants and resorts in Cua Lo V0110.CapstoneProjectReport.Group11 61 - Evaluate the performance after the implementation of solutions Stage (From 2013 to 2015) - Correct some mistakes or failures of the pilot solutions implemented in the selected transaction offices - Expand the network of transaction offices and ATM machines - Synchronously implement the strategic solutions in transaction offices - Evaluate the strategies implemented in the period of 2011 - 2015 - Formulate the business strategies for the period of 2016 - 2020 3.5 Potential problems and solutions In the process of implementing the business strategies for the period of 2011 - 2015, it is anticipated that VietinBank Cua Lo may encounter the following problems: Firstly, there will be a problem associated with the arrangement and reallocation of staffs to match the business strategies Unqualified personnel’s will be allocated to another job position or will be laid off This issue will touch every individual in the bank and even damage some relationships However, VietinBank Cua Lo should accept this risk for the sake of having qualified staffs and good managers The solution to this problem is to strictly follow the bank’s human resource policies in handling employee re-allocation and turnover Secondly, employee re-training programs targeting the transformation to the retail bank model will require not only high financial cost of the branch but also time cost of the employees However, this is a necessary task determining the success of the bank as human resources are always a significant element The solution to this problem is training plans for each section and group of employees should be developed so that training activities will not affect the general operations of Vietinbank Cua Lo Thirdly, expanding the network of transaction offices and investment in the machines for applying technology to the bank's operation management will increase investment costs Consequently, profits will be reduced in the short-term but recovered in the long-term The solution to this problem is to invest completely in each transaction office construction work Additionally, efficient investment management will avoid losses and wastes V0110.CapstoneProjectReport.Group11 62 CONCLUSION In the current economic context, the banking market of Vietnam in general and the banking market in the Nghe An province in particular is increasingly competitive Besides, bank branches are given the autonomy of independent accounting and responsibility for their own business outcomes These factors have forced every bank branch to develop its own business strategies to better compete in the area of its operations Thanks to the advancements in information technology, many banking activities have been supported by computer programs Therefore, the general goal of banks is to attract as many customers and clients as possible To achieve this, banks should have clear and appropriate business strategies, identify target customers, offer solutions based on the strengths, take advantage of the opportunities, overcome the weaknesses and prevent the threats The project of developing business strategies for VietinBank Cua Lo is developed on the theoretical foundation of strategic management, combining with the analysis of internal and external factors of Vietinbank Cua Lo in order to select the most appropriate strategies with specific implementation solutions This Capstone project is completed in accordance with the guidelines of the Master of Business Administration Program of Griggs University, United States The group members have actively researched a variety of materials to conduct analyses meeting the requirements in terms of content and presentation All the materials and data are cited properly and clearly BIBLIOGRAPHIES Ngo Kim Thanh Prof Dr., (April 2011), Strategic Management, National Economics University Publishing House Hanoi Fred R David (2006), Concepts of Strategic Management, Statistical Publishing House V0110.CapstoneProjectReport.Group11 63 Reports of Vietin Bank – Cua Lo Branch on Business Activities of year 2008, 2009 and 2010 Reports on the Assignments Implementation of all Joint Stock Banks in Nghe An Province in the year of 2010 and the first six months of 2011 Plan on Economic and Society Development of Nghe An Province in the period of 2011 -2015 Website:www.Vietinbank.vn;www.sbv.gov.vn;www.mof.gov.vn; www.moit.gov.vn; www.vneconomy.com.vn V0110.CapstoneProjectReport.Group11 64 ... Cua Lo with branches of Vietcombank, BIDV, Agribank in Nghe An Updated on December 31st 2010 Criteria Vietinbank Unit: billion VND BIDV Cua Lo Competitors Vietcombank Nghe An North of Vinh Total... competitors for Vietinbank is very high This not only comes from the same-size banks such as Vietcombank, BIDV, Agribank, but also from other rising joint-stock commercial banks Especially, new-coming... of Vietinbank Cua Lo with branches of Figure 2.6 Table 2.7 Table 2.8 Table 2.9 Figure 3.1 Vietcombank, BIDV, Agribank in Nghe An Summary of micro factors influencing Vietinbank Cua Lo The EFE