Luận văn thạc sĩ quản trị kinh doanh quốc tế MBA (180)

GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM Capstone Project Report Theme: Developing a business strategy for the Bank for Investment and Development of Vietnam – Ha Thanh branch for period 2010 -2015 Group 2: Pham Thi Bich Thuy Tran Minh Dien Tran Thi Thu Hien Vu Tuan Anh Class: GaMBA01.X02 HANOI - 2010 TABLE OF CONTENT INTRODUCTION 1 The necessity of the theme Study objective of the theme Subject and scope of study of this theme CHAPTER I METHODOLOGICAL BASIS TO DEVELOP A BUSINESS STRATEGY 1.1 Basic issues of strategy and business strategy 1.1.1 Definition 1.1.2 Basic features of a strategy .5 1.1.3 Roles of a business strategy 1.2 Strategy classification 1.2.1 Strategy at Company level 1.2.2 Strategy at Business unit level 1.2.3 Functional strategy (or operating strategy) .6 1.3 Business strategies applied in practical banking operation 1.3.1 Market-entry strategy 1.3.2 Market-developing strategy 1.3.3 New product- developing strategy 1.3.4 Concentration strategy 1.3.5 Product differentiation strategy 1.4 Strategy administration procedure 10 1.4.1 Strategy building process 10 1.4.2 Formation and selection of a strategy 17 CHAPTER II ANALYSIS OF INTERNAL AND EXTERNAL BUSINESS ENVIRONMENT OF BIDV HA THANH 25 2.1 Analysis of internal business environment 25 2.1.1 Vision, mission and operational features of BIDV .25 2.1.2 Some basic service products of BIDV Ha Thanh Branch and its operational efficiency 28 2.2 External environment analysis 30 2.2.1 Macro environment .30 2.2.2 Micro environment .37 2.2.3 Developing evaluation matrix of external factors affecting BIDV Ha Thanh Branch 42 2.3 Analysis of internal environment of BIDV Ha Thanh Branch 44 2.3.1 Internal environment factors 44 2.3.2 Building matrix of internal factor evaluation 50 2.3.3 Analysis of strengths, weaknesses, opportunities and threats (SWOT) for BIDV Ha Thanh Branch .51 INTERNAL FACTORS 51 EXTERNAL FACTORS 52 CHAPTER III SELECTION OF BUSINESS STRATEGIES AND SOLUTIONS FOR BIDV HA THANH BRANCH FOR PERIOD 2010-2015 .53 3.1 Selection of business strategies for BIDV Ha Thanh Branch for period 2010 – 2015 53 3.1.1 Basis for selection of strategies from matrix of internal and external environment factor evaluation 53 3.1.2 Formation of strategies from SWOT matrix 53 3.1.3 Building a matrix combining internal and external factors 57 3.2 Basis for identifying strategic objectives 58 3.2.1 The common strategic objectives, orientation of BIDV .58 3.3- Business objectives of BIDV Ha Thanh Branch .60 3.3.1- Common orientation .60 3.3.2 Business objectives of BIDV Ha Thanh Branch 60 3.4 Identifying business strategy of BIDV Ha Thanh Branch in 2010-2015 61 3.4.1 Market penetration strategy 61 3.4.2 Market development strategy .61 3.4.3 Strategy on development of new service product 62 3.4.4 Product differentiation strategy 62 3.4.5 Technology strategy 63 3.4.6 Financial capability development strategy 63 3.4.7 Strategy on improving management and human resources quality 63 3.4.8 Strategy on building sustainable customer sources 64 3.4.9 Strategy to strengthen marketing activities 64 3.5 Solutions to implementation of strategies of BIDV Ha Thanh branch in the period 2010 - 2015 67 3.5.1 Solutions of capital mobilization growth 67 3.5.2 Solutions to credit growth and credit quality control 70 3.5.3 Solutions to diversify and improve service efficiency and quality .71 3.5.4 Solutions to the development of retail banking services 74 3.5.5 Solutions of network development, distribution channels 75 3.5.6 Solutions for improving risk management ability of BIDV Ha Thanh Branch 76 3.6 Proposing implementation schedule .77 3.6.1 Reference criteria for building implementation schedule board 77 3.6.2 Oriented goals of BIDV Ha Thanh Branch 78 3.6.3 Proposing implementation schedule .79 3.7 Some proposals .82 3.7.1 Proposals to the Bank for Investment and Development of Vietnam 82 3.7.2 Proposals to the State Bank 82 3.7.3 Recommendations to the State and related sectors/ministries 83 CONCLUSION 84 REFERENCES 86 APPENDIX LIST OF TABLES Table 2.1 Image matrix of direct competitors 39 Table 2.2 Market share of BIDV Ha Thanh Branch on area 40 Table 2.3 Matrix of direct competition image .41 Table 2.4 Matrix of external factors evaluation (EFE) 43 Table 2.5 Matrix of internal factor evaluation (IFE) .50 Table 3.1 Matrix of strategy promotion by SWOT model .54 Table 3.2 QSPM matrix of S/O group 65 Table 3.3 QSPM Matrix of S/T group 66 Table 3.4 The plan of main business targets in the period 2010-2015 77 Table3.5 The structure of service revenue targets of BIDV in the period 2010 - 2015 78 Table 3.6 Table of implementation schedule of business strategic solutions in the period 2010 - 2015 80 LISF OF FIGURES Figure 1.1: SWOT Matrix 21 Figure 1.2: QSPM Matrix 24 Figure 2.1 SWOT Matrix 51 Figure 3.1 Internal-external evaluation (IEE) Matrix .57 LIST OF CHARTS Chart 1.1: Process of establishing strategy 11 Chart 1.2 : M Porter’s Five Competitive Forces .13 Chart 2.1: Organizational Structure of BIDV Ha Thanh 27 LIST OF ABBREVIATION ACB AGRIBANK APEC : Asia Joint – Stock Commercial Bank : Agricultural and Rural Development Bank : Asia – Pacific Economic Cooperation ATM BIDV CA CB CI CR ES EVN FB FI FS IAS ICS IMF IS IT JSCB POS QSPM RB SACOMBANK SBV SC SF SOCB TO USD VIETCOMBANK : Automated Teller Machine : Bank for Investment and Development of Vietnam : Competitive Advantage : Commercial Bank : Credit Institution : Customer Relations : Environment Stability : Electricity of Vietnam : Foreign Bank : Financial Institution : Financial Strength : International Accounting Standard : Individual Customer Service : International Monetary Fund : Industrial Strength : Information Technology : Commercial Joint – Stock Bank : Point of Sales (POS payment) : Quantitative Strategic Planning Matrix : Retail Bank : Saigon Thuong Tin Joint – Stock Commercial Bank : State Bank of Vietnam : Securities Company : Savings Fund : State-owned Commercial Bank : Transaction Office : US dollar : Joint Stock Commercial Bank for Foreign Trade of Vietnam : Vietnam Bank for Industry and Trade : Vietnam dong : Vietnam’s Stock Market : World Trade Organization VIETINBANK VND VNSM WTO INTRODUCTION The necessity of the theme A bank is an economic organization which plays a very important role The banking system worldwide can affect the development of all aspects of the entire economy in general Banking activities nowadays have been increasingly developed and banking technologies make the market expansion by large banks happen fast and thus, shortening geographic distances and making transactions in various business areas among global economies closer to each other This also force thousands of banks and non-banking financial institutions to compete directly with each other for survival and growth The question for every bank is to enhance the capacity of corporate management to grow up in any market situations To achieve that, every bank and every bank branch should have flexible and reasonable vision, goals and business strategies so as to adapt itself to the business environment, creating benefits and being the stimulative factor for the wealth to all customers, from individual, corporate to economic, political and social organizations BIDV Ha Thanh is one of 20 branches of the Bank for Investment and Development of Vietnam (BIDV) in Hanoi and one of 108 BIDV branches overall the country Established in September 2003, BIDV Ha Thanh has undergone years of operation, becoming one of top branches with best business achievements throughout BIDV system and a familiar brand-name to private enterprises and individual customers with high income in Hanoi BIDV Ha Thanh has made effective business orientation and plans right from the early time of establishment so that it can quickly prove it brand-name and gain a definite position in the market However, market changes and increasingly severe competition in Hanoi as well as the non-stop development and expansion of banks have make great challenges to the development of BIDV Ha Thanh in the long run In such a situation, 2010 - 2015 period has been considered as the milestone time for change where the world economy has been in a recession and the competition in finance and banking in Vietnam has become seriously, especially after Vietnam has clear technical barriers in finance banking under the path of WTO joining commitment Thus, it is truly necessary to predict difficulties to prepare for plans as required to grasp opportunities and overcome challenges, to develop business strategies to make orientation, goals together with practical measures and solutions for banking service activities for this period Therefore, based on knowledge in the subjects which group members have mastered during the training program of Global Advance Master of Business Administration (MBA) organized by Vietnam National University in Hanoi and Griggs University, USA with the purpose of enhancing the quality of business administration for managers and leaders for the new time, our group has chosen the theme of "Developing a business strategy for the Bank for Investment and Development of Vietnam, Ha Thanh branch for the period 2010-2015" so as to recommend solutions and orientation for the growth of BIDV Ha Thanh for next years for our Capstone project report Study objective of the theme The objective to study this theme is to analyze the situation of BIDV Ha Thanh for period 2007 - 2009 and to recommend some strategies for period 2010 2015 together with measures of implementation The primary task of this theme is to study the general theory of commercial banking business strategies and to select a standard strategic management model for analysis Based on this model, our Graduation assignmentshall assess the current situation of BIDV Ha Thanh for period 2007 - 2009 Finally, this Assignmentshall present some recommendations for business development strategies for BIDV Ha Thanh for period 2010 - 2015 based on the standard model and the results from real situation of the bank Subject and scope of study of this theme Subject of study To study major issues during Developing business strategies arising in reality of BIDV Ha Thanh Scope of space: BIDV Ha Thanh Scope of time: 2007 – 2009 period Method of case study - Systematic method: This capstone project report assess all factors which affect the business strategy of the company With this method, the assessment on factors which affect business strategies shall cover both internal and external environment of the company - Method of secondary data analysis: Used to study the methodological basis to set up a ground base for the development of business strategy of the company - Quantitative method: Used to select and make decision on a business strategy - Method of strategy analysis, including SWOT matrix, QSPM quantitative matrix The capstone project report consist of Chapters as follows: Chapter 1: Methodological basis to develop a business strategy Chapter 2: Analysis of internal and external business environment of BIDV Ha Thanh Chapter 3: Selection of business strategies and solutions for BIDV Ha Thanh for period 2010 – 2015 CHAPTER 1: METHODOLOGICAL BASIS TO DEVELOP A BUSINESS STRATEGY 1.1 Basic issues of strategy and business strategy 1.1.1 Definition Strategy is a term which derived from the Greek word, “Strategos”, used in military: “Strategy is the science and art of military management applicable in making plan and implemented on an overall scale to achieve a final victory ” “Strategy refers to plans of action set out to achieve a final victory in one or more battle field,” wrote Scholar Dao Duy Anh in Vietnamese dictionary Since 1960s of the 20th century, strategy has been applied in business and the term “business strategy” was born then The concept of business strategy has developed with the time and people have accessed it in a number of ways According to Chandler (1962), “Strategy refers to the determination of basic long – term goals and purposes of enterprises and the application of a series of activities together with the allocation of resources needed for the implementation of this goal " According to Bateman and Zeithaml ( 1990) “Strategy is a harmonic combination of activities and the allocation of resources to achieve goals of an organization The strategy of an organization refers to all efforts to optimize capabilities and resources of the organization so as to best react to opportunities and challenges of the external environment” In short, business strategy in the market economy is, based on both objective and subjective conditions, and possible resources of the enterprises, to make out tactics, ways and measures so as to ensure the survival and the long-life stable development in accordance with the development goals set out by the enterprise 1.1.2 Basic features of a strategy flexibility in providing services to meet customers’ increasingly diverse needs Targeting at small and medium business sector, providing modern banking services to serve VIP individual customer in Hanoi, BIDV Ha Thanh branch is not only potential for development but also contributes to the prosperity of customers, of economic sectors in the North of Vietnam 89 REFERENCES Vietnamese: Annual Reports in 2002, 2003, 2004, 2005 by Bank of Investment and Development of Vietnam Annual Reports by The State Bank of Vietnam in 2003, 2004, 2005 Annual Reports by VCB, ICB, AGRIB, ACB, SACOM in 2002, 2003, 2004 Pham Do Chi, Chief Editor (2004), Vietnam Economy on the way of being a Drag, The Publishing House, Hochiminh City Nguyen Thi Lien Diep, Pham Van Nam (2003), Business strategy and policy, Statistical Publishing House, Hochiminh City Ho Dieu (2001), Bank credit, Statistical Publishing House, Hochiminh City Don Taylor, Jeanne Smalling Archer, Nguyen Tien Dung, Nguyen Hong Linh, Hoang Phuong Thuy compile (2004), In order to compete to Giant, Statistical Publishing House, Hochiminh City Duong Ngoc Dung (2005), Competition Strategy according to Michael E.Porter theory, Hochiminh General Publishing House, Hochiminh City Fred R.David, Truong Cong Minh, Tran Tuan Thac, Tran Thi Tuong Nhu compile (2003), Concept of Strategy Administration, Statistical Publishing House, Hochiminh City 10 Pham Vu Lua Ha (2005), A Business Viewpoint, The Publishing House, Sai Gon Economic Newspaper, Pacific-Asia Economic Center, Hochiminh City 11 Vietnam-America Commercial Agreement 12 Nguyen Van Hong (2003), China innovates-experiences, World Publishing House, Hanoi 13 Mahathir Mohamad, Duong Thuy, Huynh Hoa, Xuan Nguyen compile (2004), Globalize and New Facts, The Publishing House, Sai Gon Economic Newspaper, Pacific-Asia Economic Center, Hochiminh City 90 14 Paul H.Allen, Nguyen Tien Dung, Le Ngoc Lien compile (2003), Bank Reestablishment, Youth Publishing House, Hochiminh City 15 Peter F.Drucker, Vu Tien Phuc 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(1980) “Strategy for change: Logical Inscrementalism” Homewood, Illois, Irwin Wernerfelt B (1994), “A Rersource Base View of the Firm”, Strategic Management Journal, (1994), 5(1997) page 171-180 Websites: http://www.tapchiketoan.com/ngan-hang-tai-chinh/ngan-hang-thuongmai/chien-luoc-cho-cac-ngan-hang-thuong-mai-viet-nam-trong-tien-trinh-hoinhap-qu.html http://www.kienthuc.vn/index.php? option=com_content&view=article&id=25271:ba-kiu-chin-lc&catid=146:ut&Itemid=535 http://www.365ngay.com.vn/index.php? option=com_content&task=view&id=1569&Itemid=14 http://thitruonghcm.net/index.php? option=com_content&view=article&id=18213:chien-lc-khac-biet-hoa-sanpham-&catid=2755:chin-lc-kinh-doanh&Itemid=234 10 http://docbao.com.vn/declaiment/23/456/456/default.dec 11 http://www.sggp.org.vn/taichinhnganhangchungkhoan/2010/8/233077/ 12 www.mot.gov.vn 13 http://www.mpi.gov.vn 14 www.icb.com.vn 15 www.mot.gov.vn 16 www.sbv.gov.vn 17 www.tintucvietnam.com 18 www.vietcombank.com.vn 19 www.vneconomy.com.vn 20 www.worldbank.org 92 APPENDIX Appendix for part of 3.5.1 Solutions for capital mobilization growth: * Estimated growth rate for years: 2010-2015 plan No % average growth Item years of 2010-2015 2010 plan 2010 2011 – 2014 plan 2015 plan %growth compared with 2009 %growth compared with 2010 2015 %growth compared with 2011 35%/year 10,000 58% 25% 15,000 20% Capital mobilization: - Capital mobilization orgnizations from 24%/year 5,060 40% 17% 6,800 15% - Capital mobilization Corporate customers from 52%/year 2,940 107% 28% 4,500 19% - Capital mobilization population from 42%/year 2,000 54% 40% 3,700 32% Ratio of population capital mobilization/total mobilization 22% 25% 19% APPENDIX Appendix for the item 3.5.1 Solutions for the growth of capital mobilization: * Expected growth targets by year: % Average Number Target Growth year 2010-2015 Capital mobilization: - Capital Plan for 2010-2015 Plan for 2010 2010 Plan for 2011 - 2014 %tt so 09 %tt so 2010 Plan for 2015 2015 %tt so 2011 35%/year 10,000 58% 25% 15,000 20% mobilization 24%/year 5,060 40% 17% 6,800 15% 107% 28% 4,500 19% 54% 40% 3,700 32% 22% 25% from financial groups - Capital mobilization 52%/year 2,940 from company customers - Capital mobilization 42%/year 2,000 from population Density of Capital mobilization from population/Capital mobilization 19% Appendix for the item 3.5.2 Solutions for the credit growth and credit quality control: * Expected growth targets by year: Number Target % Average Growth year 20102015 Plan for 2010-2015 Plan for 2010 Plan for 2011 - 2014 Plan for 2015 2010 %tt so 09 %tt so 2010 2015 %tt so 2011 Total credit outstanding: 25%/year 3,268 28% 23% 5,000 24% - Loans to financial customers 21%/year 2,988 24% 20% 4,250 19% 500 67% 50% 1,000 33% 280 86% 61% 750 67% In which: Loans to small and 50%/year medium enterprises - Loans to individuals Density of retail lending/total 71%/year 9% 15% outstanding Bad debts/ total outstanding