Luận văn thạc sĩ quản trị kinh doanh quốc tế MBA (112)

CAPSTONE PROJECT REPORT BUILDING BUSINESS STRATEGY FOR RETAIL BANKING IN BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM (BIDV) FROM 2011 TO 2015 Nguyen The Thang Le Thi Phuong Hai Nguyen Hai Yen Dang Van Hai Class: GaMBA 01.N06 HA NOI 2011 GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT BUILDING BUSINESS STRATEGY FOR RETAIL BANKING IN BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM (BIDV) FROM 2011 TO 2015 Group Number : Student’s name :Nguyen The Thang Le Thi Phuong Hai Nguyen Hai Yen Dang Van Hai HA NOI 2011 ACKNOWLEDGEMENTS We pledge that the report “Building business strategy for retail banking in the Bank for Investment and Development of Vietnam (BIDV) from 2011 to 2015” is our own research All contents and results of the report are true and have not been published in any other researches Data and figures used in the report are accurate and their sources are all clearly stated TABLE OF CONTENTS CHAPTER 1: THEORICAL : THEORETICAL BACKGROUND OF THE CAPSTONE 1.1 Business strategy - Definition, roles and attributes .3 1.1.1 Definition 1.1.2 The roles of the business strategy 1.1.3 Business strategy characteristics 1.2 Process for building business strategy 1.2.1 Vision and missions 1.2.2 Internal and External environment analysis 1.2.3 Building Matrix for selecting business strategy 1.2.2.1 External environment analysis 1.2.4 Implementing process 1.2.2.2 Internal environment analysis 10 1.2.5 Assessing the effects of the built3 Building Matrix for selecting business strategy 11 1.3 Introduction to the retail banking 1.2.3.1 External Factors Matrix 11 1.3.1 The roles of retail banking in the commercial bank 1.2.3.2 Internal Factors Matrix 11 1.3.2 The models of retail banking in the world 1.2.3.3 SWOT Matrix 12 1.4 Retail banking environment in Vietnam banking system .1.2.3.4 BCG Matrix 12 1.4.1 The potentials 1.2.3.5 GREAT Matrix to choose the best business strategy 13 1.4.2 Retail banking environment 1.2.4 Implementing process 14 CHAPTER 2: BIDV RETAIL BANKING RESULT FROM 2008-2010 1.2.5 Assessing the effects of the built business strategy 15 2.1 Introductions to BIDV .1.3 Introduction to the retail banking 15 2.1.1 History and operational features of BIDV 1.3.1 The roles of retail banking in the commercial bank 15 2.1.2 The Bank’s organization and network .1.3.2 The models of retail banking in the world 16 2.1.3 Banking operational results of BIDV from 2008-2010 1.4 Retail banking environment in Vietnam banking system 17 2.2 Assessing retail banking operational results of BIDV from 2008-2010 .1.4.1 The potentials 17 2.2.1 General assessment 1.4.2 Retail banking environment 17 2.2.2 Some problems to be overcome in retail banking 1.4.2.1 Legal framework 17 1.4.2.3 Building business strategy for2 Overview of the retail banking in BIDV from 2011-2015 Vietnam 18 2.3.1 Analyzing and assessing environment on retail banking in the future CHAPTER : BIDV RETAIL BANKING RESULTS FROM 2008-2010 20 2.3.2 Opportunities and threats accessing .2.1 Introductions to BIDV 20 2.3.3 Building business strategy for retail banking in BIDV from 2011-2015 basing on the current conditions 2.1.1 History and operational features of BIDV 20 CHAPTER III: BUILDING RETAIL BANKING BUSINESS STRATEGY AND SOLUTIONS TO IMPLEMENT THE NEW STRATEGY FOR BIDV IN THE PERIOD FROM 2011 – 2015 2.1.2 The Bank’s organization and network 20 3.1 BIDV operational targets and retail banking objectives from 2011 – 2015 2.1.3 Bank operational results of BIDV from 2008-2010 20 3.1.1 Environment forecasting2.2 Assessing retail banking operational results of BIDV from 2008-2010 .22 3.1.2 Vision, core values 2.2.1 General assessment 22 3.1.3 BIDV’s equitization process 2.2.1.1 Mobilizing capitals from individuals and households 23 3.1.4 Objectives by 2015 2.2.1.2 Lending activities to private customers 24 3.2 Choosing new business strategy for retail banking .2.2.1.3 Retail banking services 25 3.2.1 SWOT Matrix sythetic .2.2.1.4 Retail banking network 27 3.2.2 Strategy selection by Great Model 2.2.2 Some problems to be overcome in retail banking 28 3.3 Solutions for business strategy for retail banking from 2011 - 2015 .2.2.2.1 The weaknesses 28 3.3.1 Operational management 2.2.2.2 The causes 29 3.3.2 Financial solutions 2.3 Building business strategy for retail banking in BIDV from 2011-2015 .30 3.3.3 Marketing management .2.3.1 Analyzing and assessing environment on retail banking in the future .30 3.3.4 Human resource management 2.3.1.1 Macro environment (PEST model) 30 3.4 Plan to implement the new business strategy for retail banking .2.3.1.2 Industry analysis – Michael Porter’s Five Forces Model 33 3.5 Recommendations to authorities 2.3.1.3 Competition 37 3.5.1 Recommendations to the Government .2.3.2 Opportunities and threats accessing 38 3.5.2 Recommendations to SBV 2.3.3 Building business strategy for retail banking in BIDV from 2011-2015 basing on the current conditions 39 Appendix 1: Retail Banking in some major banks .2.3.3.1 Resources, core value of the BIDV 39 Appendix 2: Current organisational chart of retail banking operation in BIDV’s head offcice 2.3.3.2 Strengths and weaknesses 41 Appendix Current Operational chart in Branches 2.3.3.3 Building business strategy matrix 42 Appendix 4: Retail Products catalogs of BIDV, ACB and Vietcombank CHAPTER : BIDV RETAIL BANKING BUSINESS STRATEGY AND SOLUTIONS TO IMPLEMENT IN THE PERIOD FROM 2011 – 2015 53 Appendix 5: Plan to implement retail banking business of BIDV in the period of 20112015 3.1 BIDV operational targets and retail banking objectives from 2011 – 2015 53 3.1.1 Environment forecasting 53 3.1.2 Vision, core values 53 3.1.3 BIDV’s equitization process 54 3.1.4 Objectives by 2015 .55 3.1.4.1 Market positioning 55 3.1.4.2 Main targets: 56 3.2 Choosing new business strategy for retail banking 57 3.2.1 SWOT Matrix synthetic 57 3.2.2 Strategy selection by Great Model .60 3.3 Solutions for business strategy for retail banking from 2011 - 2015 63 3.3.1 Operational management .63 3.3.1.1 Improving the management capacity 63 3.3.1.2 Complete the model of retail banking management and operation 63 3.3.2 Financial solutions .63 3.3.3 Marketing management 63 3.3.3.1 Develop a solid customer base and maximize customer value 63 3.3.3.2 Enhancing research and development of retail banking products and service 63 3.3.3.3 Develop and improve the efficiency of network and distribution channels 63 3.3.3.4 Promoting communication and marketing activities in retail banking 63 3.3.4 Human resource management 63 3.3.4.1 General solutions 63 3.3.4.2 Recruitment policy 63 3.3.4.3 Training policy .63 3.3.4.4 Compensation policies 63 3.4 Plan to implement the new business strategy for retail banking 63 3.5 Recommendations to authorities 63 3.5.1 Recommendations to the Government 63 3.5.2 Recommendations to SBV .63 LIST OF ABBREVIATIONS ACB : Asia Commercial Bank ALCO : Asset/Liabilities Management Committee ArgribankAgribank : Bank for Agriculture and Rural Development of Vietnam ATM : Automatic Teller Machine BIDV : Bank for Investment and Development of Vietnam BIC : BIDV Insurance Company CAR : Capital Adequacy Ratio CPI : Consumer price index CIC : Credit Information Center CPM : Competitive Profile Matrix EFE : External Factor Evaluation matrix FDI : Foreign Direct Investment GDP : Gross Domestic Product HR : Human resources IFE : Internal factor environment matrix NPL : Non-performing loan M&A : Mergers and acquisitions POS : Point of sale RB : Retail Banking RBO : Retail Banking Operation SBV : The State Bank of Vietnam SOEs : State-owned enterprises VAS : Vietnamese accounting standards VCB : Joint stock Bank for Foreign Trade of Vietnam Vietinbank : Joint stock Bank for Industry and Trade of Vietnam WB : World Bank WTO : World Trade Organization TT No Banks Organizational structure The customers of the retail banking activities Tech-combank There are blocks: Block the customer service business, banking and block individual financial center and capital management transactions on financial markets, Human Resource Management Unit, Block Credit Management and risk management center application and development of technology products and services banks, block legislation and compliance, operating Block, Block advised Although not clearly understood but may be considered the views of Techcombank RB object of activity is the individual customer Blocks are divided banking and personal financial services and the Commonwealth Bank and corporate finance Block banking and personal finance include the following components: service centers and credit card consumer financial services center housing; financial service centers and individual investors; Center collection management and control credit risk retail; service centers and retail network support; Development Center sales and marketing retail banking services 81 The retail banking activities Loans to individuals accounted for 31% of total outstanding loans Raising capital from individual customers accounted for 58% of the total capital raised TT No Banks HSBC Organizational structure The customers of the retail banking activities Basically the structure of a branch of HSBC retail consists of two main groups The group in charge of business and support groups RB: HSBC Retail focuses on two main customer groups as follows: Group customers personal financial Group business RB including charge card unit, the unit responsible for customer Prosperity (Wealth Management), units of analysis and strategy development at local business units in charge of the Phone Banking , Internet banking unit in charge of personal credit, product management, credit cards and group (retail banking) Yamaha, Kawashaki, Best Buy, Bon – ton, Costco, Helzberg Diamond, Neiman Marcu Banking group in charge of retail (retail banking) at the branch serving the needs of each individual customer to maintain customer loyalty and actively associated with the service providers to sell other retail shopping centers in Kuwait, Turkey or the product company has special service known as Yamaha, Kawashaki, Best Buy, Bon - ton, Costco, Helzberg Diamond, Neiman Marcu services (Personal Financial Service) and affluent group of customers (Private Banking) 82 The retail banking activities Sources: Annual report of the above banks II General comments: Regarding retail customers: There are two trends in defining the retail banking customers:   Retail customers isare the individual customer Retail customers are individuals and private customers and small medium enterprises Regarding the contribution of the mass density of retail  For the bank considers the retail banking customers are only individuals: Share of retail credit / total credit balance is usually smaller than 40% , retail funding / total funding is over 50% For banks considers the reail retail banking customers are individuals and SMEs: Share of retail credit and funding proportion of the population accounts for a higher density and increased branding opportunities and cross-selling products 83 Appendix 22: Current organisationalorganizational chart of retail banking operation in BIDV’s HO Retail Banking and the network RB Product Development & Marketing RB Biz Division Organisational Card Centre Branch Management RB MKT Division BR Mgt RB Biz RB Credit Division BR Mgt Call centre Risk Mgt RB NonCr Division Organizational chart of retail banking operation in BIDV’s head offciceoffice Retail Banking and the network RB Biz Development RB Biz Division Branch Management RB MKT Division RBRB Non-Cr Credit Division Division Card Centre 84 BR Mgt BR Mgt Contact Centre RB Biz Division Risk Mgt Call Division centre Appendix 33 Current Operational chart in Branches Head of Branch Wholesale Department Retail Department Operational Department (CRM) and (CSR)/ (FA)/ Marketing Corporate SME Operational chart in Branches – From 2011 – 2015 Head of Branch Wholesale Department Corporate SME Retail Department (CRM) and (CSR)/ (FA)/ Marketing Private banking Marketing 85 Operational Department Appendix 4:4 Retail Products catalogs of BIDV, ACB and Vietcombank Products Cards Deposits and savings BIDV ACB Name of Product: Power, Thẻ eTrans 365+, “Van dam” Domestic credit card Card International credit card Name of the Products: ATM Payment and domestic withdrawal card  Payment for goods and services ATM2+  Cash withdrawing Global payment and Visa Gold withdrawing card ACB Visa Debit/MasterCard Dynamic ACB Visa Electron/MasterCard Electronic The regular product release Deposit : Current accounts VND -Deposit paid in VND Current accounts in foreign currencies: -Deposit paid in foreign Current deposits: currency Save "golden eggs" -Time deposit in VND Term Savings deposits -Time deposit in foreign Deposit with withdraw interest before maturity currency ladder sent in real time -Collateral deposit Save ladder guaranteed by card Save phased Savings: Cumulative Security -Non term savings in VND -Non term savings in The batch product release: foreign currency Save prize 86 Vietcombank Accept all card types: Visa, MasterCard, JCB, American Express, Diners Club Visa debit Connect 24 Vietcombank SG24 VCB Master card / VCB Visa VCB American Express Vietcombank Connect24 Visa International credit card Vietcombank MTV Deposit 1.1 Currencies : VND and foreign currencies (applied for USSDUSD, GBP, EUR and AUD) 1.2 Tenor: Non term and Time Bills 2.1 Defined Bills 2.2 UnamedUnnamed Bills Bonds (typical) Bonds to increase capital Short-term certificates, Bonds -Term savings in foreign currency -Gold savings term certificates of deposit Lending 10 11 12 13 14 Loans guaranteed by salary House loans Car loans Households business loans Overdraft Value paper mortgage loans Value paper discount Studying overseas loans Security investment loans Loans for advanced selling securities Loans for repo securities Loans for securities mortagage Loans for exporting labour Loans for credit card payment Money transfers Domestic money transfer 1.1.Domestic money transfer in 1.2 Domestic money transfertransfers out Salary mortgage loans Home loans Car loans Overdraft Value paper mortgage loans Value paper discount Studying overseas loans Security investment loans Loans for advanced selling securities 10 Loans for exporting labour 11 Loans for credit card payment 12 Loans for gold investment Domestic remittance Transfer money abroad Receive money from the 87 Salary mortgage loans Home loans Car loans Overdraft Value paper mortgage loans Value paper discount Studying overseas loans Security investment loans Loans for advanced selling securities 10 Loans for exporting labour 11 Loans for credit card payment 12 Loans for installation house buying payment Transfer money in: 1.1 Inward remittances from abroad: - Money transfer by conventional power, Monetary products 1.3 Services: Supply of blank checks, cashier's check, pay checks, pay authorized expenditures, revenues in the country 1.4 Service: Receive checks, collection mandate sent for collection Product line: International Money Transfer 2.1 Money transfer abroad 2.2 Money transfer to the international Service 2.3 International payment checks  sale of Bank Draft Service  sale service checks  services purchased traveler's checks  service international check collection country Inward remittance from abroad Western Union Money Transfer Transfer money abroad via Western Union money orders, checks / drafts - MoneyGram Money Transfer 1.2 Money transfer to domestic Outward: 2.1 Money transfer abroad: - Direct electronic funds SWIFT, Telex, drafts, letters - MoneyGram Money Transfer Domestic money transfer Foreign exchange service Spot Forward Option Currency options Gold options Buy and exchange foreign curremcycurrency • 10 types of foreign currency cash to buy, change are: British Pound, U.S Dollar, Hong Kong dollars, Swiss Francs, Euro, Japanese Yen, Thai Bath, Australian Dollar, Canadian Dollar, Singapore Dollar • 05 of the Vietcombank buy travelers' checks, including: American Express, Visa, MastercardMasterCard, Thomacook, Citicorp, Bank of America Sale of foreign currency • sale of foreign currency cash • Sell travelers checks 88 Other services Exchange of money not qualified for circulation 1.1 Exchange unqualified VND 1.2 Through foreign exchange cash flow unqualified Receive/Pay cash flow at the individual Keeping cash overnight Service-receive messages sent via mobile banking (BSMS) The account information on the Internet Brick debt service charges with Viettel Telecom Keeping gold Foreign Exchange Intermediary payment service real estate sales Student services BankBank draft multi currency 89 Online Banking Capital management automation Automatic Funds Transfer Get the daily exchange rates through email 5.5.3 Appendix 5: Plan to implement retail banking business of BIDV in the period of 2011-2015 Appendix Plan to implement retail banking business of BIDV in the period of 2011-2015 Clue Units Co-coordinated Units Tasks I HEAD QUARTER Board 1.1 Consolidating management capacity of Head quarter of Rename to Board of retail product development and Human Board of retail marketing, supplement more duties and responsibilities resource product organiza development and Establish AdmistrativeAdministrative Division marketing tion Establish E-banking Division Establish a centre in the Southern area Card centre Establish a product development Division Board of branch Research, transfer the function of ATM, POS management management; from Board of branch management to Card centre Card centre Board of retail Supply enough staff for retail banking Division product development and Improve capacity of staff in managing retail banking marketing; Board activities of branch management; Card centre 90 2011 2012 2013 2014 2015 x x x x x x x x x x x x x x x x 1.2 Consolidate operation model of retail banking business at branches Send official document to Branches in order to direct them to found PersonelPersonnel customer relations Divisions Board of retail product development and Check and complete the document describing functions, marketing responsibilities of each part, position related to retail banking activities Branches x x x x x x x x x x x x x x x x x x x x x x x Concretize annual business plan and build the tactic plan for each product x x x x x Direct and guide the implementation of branch retail banking operations x x x x x Do the plan to allocate retail employees for branches Board of retail Establish the Financial Advisory Division product development and marketing in Establish Private banking Division/Group Branch Board Board of retail Do the medium and long term plan for retail banking business of Plan and evaluatationevaluation criteria product and development and Develop Set up structure and limit for retail activities in business plan marketing ment Board Board of Plan of retail and product Development develop ment x 91 and Marketi ng Make report and propose to Board of Directors necessary measures to deploy the plan effectively and synchronously x x x x x Identify criteria and suitable content to training for retail banking staff at branches x x x x x Set up criteria and segment the market x x x x x Guide the branches to carry out customer policies based on particular market segment x x x x x Research and Develop new products based on the charateristicscharacteristics of each market segment x x x x x Deploy marketing program based on each market segment x x x x x Board of controlling credit risks Build and deploy the scoring system for individual customers x x x x x Related Units Standardize current products and service x x Related Units Research and Develop new products x x x x x Centre of traingtrainning and human resource orgainizationorg anization Related units 92 Related Units Research and Develop unique products x x x x Board of controlling credit risks Complete and carry out the policies of issue credit for retail customers x x x x Organize the marketing activities x x x x x x x x x x Research and implement specific design for transaction space of retail customers x x x x Build the e-payment gate x x x x Board of Brand and Public Board of technology, Technology centre, Card centre and related units Board of branch management; Board of retail product development and marketing Board of technology and Technology centre Research, build and deploy contact centre 93 x x Board of human Board resouceresource Expanse the network of transaction office, branches organization of branch Board of retail manage product Do the pilot and then deploy the establishment of individual ment development and financial centre (pure retail transaction office) marketing Board of Board of branch technology and Develop AutoAuto banking model manage Technology ment/Ca centre rd centre Develop system of ATM, POS Board of Upgrade current products, service technology and Card Technology R&D new products, service centre centre Board of financial Plan, Board Board of retail of product Finance development and marketing x x x x x x x x x x x x x x x x x x x x x x x x x x x x Risk management related to card business x x x x x Establish, complete and implement the motivation policies on retail activities x x x x x Complete and deploy the incentive mechanism for retail banking activities x x x x x 94 x Set up a machenisimmechanism to allocate cost and benefits to each retail activity II BRANCH Found the individual customer relations division and organize retail products and service Board of human resource organization and board of retail product development and marketing Establish and training for the customer relations staff at the Individual customer relation Division, transactions division and saving funds for regular customers Organize a group of Individual customer service Found and train for Financial advisors serving for customers at medium and high level Build a group of seller to serve the weathywealthy and very prosperous customers (Private banker vàand Wealth management) Risk management of retail banking activities at branches 95 x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x ... strategy matrix 42 Appendix 4: Retail Products catalogs of BIDV, ACB and Vietcombank CHAPTER : BIDV RETAIL BANKING BUSINESS STRATEGY AND SOLUTIONS TO IMPLEMENT IN THE PERIOD FROM... Strategy implementation Result evaluation Feed back (Source: Strategic management slide lecture, GaMBA program, Griggs University) 2.2.1 1.2.1 Vision and missions To build a business strategy, we... Strategy implementation Result evaluation Feed back (Source: Strategic management slide lecture, GaMBA program, Griggs University) 2.2.2 Internal and External environment analysis 2.2.2.1 1.2.2.1