Application of porters five forces to evaluate the competitiveness a case study at bank for investment and development hai ba trung branch,graduation thesis

STATE BANK OF VIETNAM BANKING ACADEMY Foreign Language Faculty GRADUATION THESIS Application of Porter's five forces to evaluate the competitiveness- A case study at bank for Investment and Development Hai Ba Trung Branch Student name : Nguyen Thu Trang Class : ATCA-K11 Lecturers : Tran Thi Thu Thuy, Nguyen Thuy Dung June, 6th 2012 Graduation Thesis Banking Academy ACKNOWLEDGEMENTS I would like to show my deep gratitude to my supervisors, Tran Thi Thu Thuy and Nguyen Thuy Duong, whose guidance, advice and simulating suggestions from the initial to the final step enabled me to develop deep understandings of the subject and implement the study progressively and smoothly My grateful thank also goes to all staff of the Corporate Customer Relation Department of BIDV Hai Ba Trung branch, who provided me with major materials and data collection for the study I would like to thank my family members, especially my cousin, Do Thi Lan Phuong, for her useful academic advice and encouragement for me to pursue the final goal of thesis Last but not least, it is a pleasure to thank my readers, who spend interest and the precious time for my thesis Nguyen Thu Trang i ATCB - K11 Graduation Thesis Banking Academy ABSTRACT Improving firm’s competitiveness has become an increasingly important topic, and received significant attention by a large number of researchers, corporate managers, and authorities at various levels Bank is considered a special firm with products and services relating to money Banks in general and their branches especially have to encounter a lot of difficulties in competing to others in the same bank industry Therefore, it is extremely necessary to analyze the competitiveness of a bank in the economic globalization To address this issue, the study focuses on evaluating the competitive position of BIDV Hai Ba Trung branch basing on the analysis of Porter’s Five Forces model and then giving an assessment and recommendations to raise the competitiveness of the branch Key words: competitiveness, Porter’s Five Forces model Nguyen Thu Trang ii ATCB - K11 Graduation Thesis Banking Academy TABLE OF CONTENTS ACKNOWLEDGEMENTS i ABSTRACT ii LIST OF TABLES AND FIGURES v LIST OF ABBREVIATION vi CHAPTER 1: INTRODUCTION 1.1 BACKGROUND TO THE STUDY 1.2 AIMS OF THE STUDY 1.3 RESEARCH QUESTIONS 1.4 SCOPE OF THE STUDY 1.5 METHODS OF THE STUDY 1.6 OUTLINE OF THE THESIS CHAPTER 2: THEORETICAL BACKGROUND 2.1 THEORETICAL BACKGROUND OF COMPETITION 2.1.1 Definitions 2.1.2 Classifications 2.2 THEORETICAL BACKGROUND OF COMPETITIVENESS 2.2.1 Definitions 2.2.2 Classifications 2.2.3 Competitiveness of a commercial bank 2.2.3.1 Definitions 2.2.3.2 Factors influencing the competitiveness of a commercial bank 2.3 THEORETICAL BACKGROUND OF PORTER’S FIVE FORCES MODEL 2.3.1 The Five Competitive Forces model of Porter 2.3.2 Characteristics of five forces in Porter’s model 10 2.3.2.1 Bargaining power of suppliers 10 2.3.2.2 Bargaining power of buyers 10 2.3.2.3 Threats of new entrants 11 Nguyen Thu Trang iii ATCB - K11 Graduation Thesis Banking Academy 2.3.2.4 Threats of substitute products 13 2.3.2.5 Rivalry among existing firms 13 2.3.3 Application of the model in the bank industry 14 2.3.3.1 Bargaining power of suppliers 15 2.3.3.2 Bargaining power of customers 15 2.3.3.3 Threats of new banks 17 2.3.3.4 Threats of substitute products 17 2.3.3.5 Rivalry among existing banks 18 CHAPTER 3: ANALYSIS AND IMPLICATIONS 21 3.1 THE COMPETITIVE POSITION OF BIDV HAI BA TRUNG BRANCH .21 3.1.1 Bargaining power of suppliers 21 3.1.2 Bargaining power of customers 22 3.1.3 Threats of new banks 25 3.1.3.1 New branches of other domestic banks .25 3.1.3.2 New branches of foreign banks .26 3.1.4 Threats of substitute products or services .27 3.1.5 Rivalry among existing banks 29 3.2 IMPLICATIONS 34 CHAPTER 4: RECOMMENDATIONS AND CONCLUSIONS 38 4.1 RECOMMENDATIONS 38 4.2 CONCLUSIONS 41 REFERENCES 42 Nguyen Thu Trang iv ATCB - K11 Graduation Thesis Banking Academy LIST OF TABLES AND FIGURES Figure 2.1 : Forces driving industry competition Figure 2.2 : Summary the competitive position of Tanzania banking system Table 3.1 : The total mobilized capital in 2011 Table 3.2 : Credit activities of BIDV Hai Ba Trung branch Figure 3.3 : Percentage of credit customer types 2011 Table 3.4 : Fund raising from corporate customers of BIDV Hai Ba Trung branch Figure 3.5 : The operation structure of BIDV Hai Ba Trung branch Table 3.6 : The expenditure for application of the core banking in 2000 Table 3.7 : The number of ATM and POS of commercial banks (June 2011) Nguyen Thu Trang v ATCB - K11 Graduation Thesis Banking Academy LIST OF ABBREVIATION BIDV : Bank for Investment and Development of Vietnam SBV : State Bank of Vietnam Vietcombank : Joint Stock Commercial Bank for Foreign Trade of Vietnam Agribank : Vietnam Bank for Agriculture and Rural Development Techcombank : Vietnam Technological and Commercial Joint Stock Bank SeAbank : Southeast Asia Commercial Joint Stock Bank Vietinbank : Vietnam Bank for Industry and Trade Sacombank : Saigon Thuong Tin Commercial Joint Stock Bank GPBank : Global Petro Commercial Joint Stock Bank VIB : Vietnam International Commercial Joint Stock OECD : Organization for Economic Cooperation and Development IMD : Institute for Management Development POS : Point of Sale HBT : Hai Ba Trung ATM : Automatic Teller Machine WEF : World Economic Forum Nguyen Thu Trang vi ATCB - K11 Graduation Thesis Banking Academy CHAPTER 1: INTRODUCTION 1.1 BACKGROUND TO THE STUDY It is undeniable that the global competition is happening widely all over the world, which creates the motivation for the social and economic development To any economy, the competition in banking system plays a key role because if the bank system is efficient and disciplined, it brings about a rapid growth in the various sectors of the economy The Vietnam banking sector is witnessing the blooming of banks in the recent years and the competition in this sector is more and more vigorous The analysis and the improvement of competitiveness of banks becomes a significant factor for banks to be stable and develop prosperously There are different ways used to analyze the competitiveness of a firm but one of the most popular methods is the Five Competitive Forces model of Micheal Porter, a Professor at Havard Business School as well as a well-known consultant in the competitive strategy of government leaders in some countries such as the United State, Singapore, England and Russia Porter’s Five Forces model gives us the sufficient and general comprehension about the challenges and the opportunities of competition in the financial market and simultaneously the strengths and weaknesses of banks are also recognized Therefore, banks can create the suitable competitive strategies to develop and maximize profit Bank for Investment and Development of Vietnam (BIDV), established in 1957, is one of the four biggest banks of Vietnam and has a network of branches covering the whole nation In 2008, BIDV founded the 105th branch in Hai Ba Trung (HBT) district in Hanoi Despite being opened recently, Hai Ba Trung branch has been deploying diversified banking services and activities so as to contribute to the development of BIDV in particular and the whole banking system in general However, in the existing economic globalization, the appearance of numerous bank branches is a huge challenge to BIDV Hai Ba Trung Moreover, BIDV Hai Ba Trung branch also has to face with the competition in the internal BIDV system Therefore, in order to become one of the leading branches, BIDV Hai Ba Trung has to understand clearly its own Nguyen Thu Trang ATCB - K11 Graduation Thesis Banking Academy competitive position, by which synchronous measurements should be implemented to raise its competitiveness in the best way With the hope of providing a deeper view about the competitiveness of BIDV Hai Ba Trung branch, the researcher attempted to investigate into the topic “Application of Porter’s Five Forces to evaluate the competitiveness – A case study at BIDV Hai Ba Trung branch” by applying Porter’s Five Forces model, and then giving the strategies and recommendations to improve the competitiveness 1.2 AIMS OF STUDY The study is implemented in order to firstly provide the better understandings of the Five Competitive Forces model of Micheal Porter Secondly, the strengths, weaknesses, opportunities and challenges of BIDV Hai Ba Trung branch are analyzed and evaluated and then the study gives the assessment about the real competitive position of BIDV Hai Ba Trung branch Finally, the research suggests some solutions and recommendations to improve the competitiveness of BIDV – Hai Ba Trung branch 1.3 RESEARCH QUESTIONS The study was done to answer the two following questions: (1) What is the current intensity of competitiveness of BIDV Hai Ba Trung branch? (2) What should the branch to improve its competitiveness? 1.4 SCOPE OF THE STUDY The study is conducted only based on the activities of BIDV Hai Ba Trung branch and some others in the Hai Ba Trung district, Hanoi, from 2008 to 2011 The data of the study is achievable between 2008 and 2011 while the branch has a lot of changes in 2012 Hence, the evaluation of BIDV Hai Ba Trung branch in this research can only be practical in 2011, but may not be valid at the present Nguyen Thu Trang ATCB - K11 Graduation Thesis Banking Academy 1.5 METHODS OF THE STUDY The study adopts both quantitative and qualitative approaches The data in the study are secondary ones collected from various sources including the Internet, journals, and annual reports of BIDV – Hai Ba Trung branch from 2008 to 1011 Some other methods are also applied in the study such as the inductive and deductive method, summary, comparison and statistics, combined with the illustration of the system of figures and tables 1.6 OUTLINE OF THE THESIS The study includes four main chapters Chapter 1: Introduction – This chapter introduces some main characteristics of the thesis including the background, aims, scope and methods of the study as well as research questions Chapter 2: Theoretical background – This chapter provides a general knowledge about competition, competitiveness, Five Forces model of Porter and especially, how to apply this model in evaluating the competitive position of a firm or a commercial bank Chapter 3: Data analysis and implications - It is the most important part of the study in which the competitive position of BIDV Hai Ba Trung branch is analyzed basing on the Porter’s model Chapter 4: Recommendations and Conclusion - In this chapter, some strategies and recommendations are suggested in order to improve the competitiveness of BIDV Hai Ba Trung branch Nguyen Thu Trang ATCB - K11 Graduation Thesis Banking Academy In general, the threats of substitutes to BIDV HBT are low Products and services of the branch are a suitable choice of the customer due to the safety of loans and deposit, which is shown by the stable increase in the number of customers of the branch 3.1.5 Rivalry among existing banks In this section, the intensity of rivalry is considered between BIDV Hai Ba Trung branch and other branches in Hai Ba Trung district, by which the competitiveness of the branch will be evaluated Since the establishment in 2009, BIDV Hai Ba Trung branch has faced with the competition from many branches of other commercial banks Most of the banks have their branches in Hai Ba Trung district such as Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Southeast Asia Commercial Joint Stock Bank (SeAbank), Vietnam Bank for Industry and Trade (Vietinbank), Global Petro Commercial Joint Stock Bank (GPBank) and Agribank The high number of existing branches leads to the increasing intensity of competition Moreover, in the recent years, the bank industry growth has been low and banks have to consider very carefully giving the decisions whether new branches can be established Because of the global crisis and the economic difficulties, banks have been plunged into the competition to get the bigger market share In addition, the products and services of branches are not too different and it is easy for a customer to switch to different products with the low switching cost For example, a customer is using the payment card of BIDV Hai Ba Trung In case, Techcombank Hai Ba Trung branch gives some promotions for new users of its payment card, this customer can easily stop using BIDV card and have another of Techcombank without paying any charges The differentiation of products is also low when branches provide the same products such as deposit-savings, personal loans, credit or E-banking Although some differences in the interest rate can be seen, it does not make the high differentiation From the above analysis, it can be seen that the intensity of rivalry among branches of banks is very high To evaluate the competitiveness of BIDV Hai Ba Trung branch, some elements are analyzed including the administration power, the technological Nguyen Thu Trang 29 ATCB - K11 Graduation Thesis Banking Academy power, the promotion and marketing power, the quality of staff and the power of expanding network 3.1.5.1 Administration power The administrative mechanism of the branch is effectively run when each department has their specialized duties BIDV Hai Ba Trung has reformed some regulations in which the functions of administration and the functions of professional competence are separated The changes create the professional branch operation Figure 3.5: The operation structure of BIDV Hai Ba Trung branch Nguyen Thu Trang 30 ATCB - K11 Graduation Thesis Banking Academy The mechanism of BIDV Hai Ba Trung shows the specialization of each department However, the activities of the department have the mutual relationship in which all the departments can help each other to have the best operation This structure is newly applied in the banking branch organization system, in which, for example, the credit department is split into the individual customer department and the corporate customer department The new mechanism will help the branch to operate more efficiently, contributing to the bigger market share and the higher profitability 3.1.5.2 Technological power As the above analysis, the differentiation of products among branches is not high with the same types of products and services Therefore, if a branch can apply more modern technology in the products, this branch can get more advantages in the competition In 2000, with the support of World Bank, BIDV deployed the core banking and has applied this for the whole network The table 3.5 shows the expenditure commercial banks spent to develop the core banking Bank Expenditure Employment time Partner BIDV 2.7 million USD year Silverlake Axis ACB million USD years Unisys Sacombank 3.2 million USD year Temenos Techcombank million USD years Temenos VIB million USD year Oracle Table 3.6: The expenditure for application of the core banking in 2000 As can be seen from the table, the bank appreciated the importance of the core banking specifically and the technological development generally BIDV Hai Ba Trung branch is not an exception when using the core banking since the establishment Thanks to the core banking, its customers can carry out a lot of transactions and services in any branches of BIDV and even in the branches of other banks Furthermore, BIDV Hai Ba Trung branch also provides services basing on high technology such as BIDV e- Nguyen Thu Trang 31 ATCB - K11 Graduation Thesis Banking Academy banking (transactions are made through the Internet and mobile phones) or BIDV@Security Another advantage of BIDV Hai Ba Trung branch is that the number of Automatic Teller Machine (ATM) and Point of Sale (POS) of BIDV is very high (ranked 2) compared to other banks Bank The number of ATM The number of POS 31/12/2010 06/2011 Increase 602 802 200 203 203 VCB 1.890 2.090 200 5.530 5.930 430 BIDV 682 815 133 425 780 355 Sacombank 212 350 138 1.773 1.752 -21 ACB 134 174 40 7.050 7.060 10 Techcombank 165 230 65 1.804 1.839 35 VIB 157 225 68 Agribank 31/12/2010 06/2011 Increase Table 3.7: The number of ATM and POS of commercial banks (June, 2011) The number of ATM of BIDV and the high technology in producing cards create a favorable condition for the customers of BIDV Hai Ba Trung branch to choose the card service of the branch 3.1.5.3 Promotion and marketing power Power of promotion and marketing plays an important role in attracting the customers and introducing new products and services Each bank has their own strategies in promotion and marketing but the spending for this activity does not excess 6% of the total bank expenditure Nguyen Thu Trang 32 ATCB - K11 Graduation Thesis Banking Academy BIDV Hai Ba Trung branch is very active on marketing the new products and services by hiring the professional marketing company in some phases such as the design of new products, logo and gifts for customers In addition, BIDV Hai Ba Trung branch also gives a lot of attractive promotions focusing on the specific types of customers For example, at the beginning of the school year, it is free for students when they open the card of the branch or at present, Hai Ba Trung branch is applying a competitive interest rate for customers who want to buy a new house If the customers buy insurance of BIDV Insurance Corporation (BIC) for the new apartment, they will be discounted 50% on the insurance fee for the first year and 25% for the next year Moreover, the customers get a lot of preferential rights depending on the project of the investor Definitely, the suitable promotion and marketing strategy of BIDV Hai Ba Trung branch are effectively attracting a high number of customers, which contributes to the increasing competitiveness of the branch compared to other branches in the same area 3.1.5.4 Staff quality The total of staff of BIDV Hai Ba Trung branch is 130 and the average age is 35, showing that the branch has a young and active staff An advantage is that they are very active and enthusiastic to the work They are sensitive to approach the new technology and have strong motivation to learn and update the specialized knowledge The young staff is lead by a board of experienced directors with the good management skills Moreover, the working attitude of the staff is surveyed to be very positive Most of the customers feel comfortable and satisfied when they are served by the staff of the branch It is shown by the after-tax profit of the branch at VND 438 million in 2009, one year after the establishment The profit is high to a newly established branch encountering many difficulties in the global crisis The good staff quality turns out an advantage in the competition of the branch Nguyen Thu Trang 33 ATCB - K11 Graduation Thesis Banking Academy 3.1.5.5 Power of expanding network After four years since the establishment, BIDV Hai Ba Trung branch totally has four transaction offices and two savings counters located in convenient places and crowded areas This network helps the branch expand the market share in the area and provides customers with better quality Compared to other BIDV branches established at the same time in 2008, this network development of Hai Ba Trung branch is normal For example, BIDV Ba Dinh branch and BIDV Tay Ho branch, which were founded in 2008, also have the total of four transaction offices for each branch Nevertheless, the number of transaction offices and saving counters is not as important as their efficient operations Before setting up new transaction offices, the branch has to consider and review carefully the ability to develop the offices in the future, which can create the profitability for the branch 3.2 IMPLICATIONS On the basis of the above analysis, the strengths, weaknesses, opportunities and challenges of BIDV Hai Ba Trung branch can be evaluated, and then the competitiveness will be estimated Strengths Since the establishment, the branch has had the careful guidance from the broad of BIDV leaders BIDV has provided the huge support for the branch in training its staff or providing the capital and the branch can apply the available modern technology of BIDV in providing the products and services for the customers The reputation and the prestige of BIDV have been confirmed for many years Hence the branch can rely on that element to raise the loyalties of customers Moreover, the young staffs with high qualification always serve the customers with the enthusiastic attitudes and good quality, which creates comfort and satisfaction for the customers The position of the branch in which many offices and universities are located is also an advantage to attract numerous customers Last but not least, BIDV is a state joint stock commercial bank, thus, BIDV in general and Hai Ba Trung branch in particular can get more support from the government than others Nguyen Thu Trang 34 ATCB - K11 Graduation Thesis Banking Academy Weaknesses In spite of being founded for nearly four years, BIDV Hai Ba Trung is still considered as a young branch The pressure of existing branches in the area is very high when most of them have long-lasting relationship with the companies and organizations in the area, which creates difficulties for the new branch like BIDV Hai Ba Trung in approaching the good source of customers and exploiting the new customers In addition, after the global economic crisis, many companies and corporations, especially small and medium enterprises that are the main customers of the branch have difficulties in their business activities and making profit Obviously, it limits the customer development of the branch Opportunities After the global crisis, the economics has gradually recovered The inflation in Vietnam has been gradually curbed in 2012 Therefore, SBV has recently decreased the interest rate for loans, which can attract more customers for the bank Furthermore, the restructuring in the banking system in the near future can make the bank to operate more efficiently The branch can cooperate with other branches in BIDV system or companies to expand the market share and raise the profit Challenges The fluctuation in the interest rate is one of challenges of BIDV Hai Ba Trung branch The branch has to continuously adapt to the new policies of the interest rate, which can make a disadvantage to the bank Moreover, in the process of participating in WTO, the branch has to encounter the appearance of branches from foreign banks This is forecasted as a vigorous struggle when foreign banks have a strong financial power and a professional staff with high quality Conclusion of competitiveness of BIDV Hai Ba Trung branch Applying the Porter’s model to analyze the competitive position of BIDV Hai Ba Trung branch in the study has helped the researcher to draw out some findings Firstly, the intensity of existing branches to BIDV Hai Ba Trung branch is very high because of the low differentiation of products, the low bank industry growth and the Nguyen Thu Trang 35 ATCB - K11 Graduation Thesis Banking Academy low switching cost The branch has to compete vigorously to other branches in gaining market share and customers This threat has a significant impact on encouraging the branch to apply suitable competitive strategies in order to improve its performance in administration, technology, promotion and marketing, and expand the network power to maximize profit Secondly, the threats of new banks to the branch are low because of the fact that foreign banks have insignificant advantages in joining Vietnam banking sector and it is impractical for the domestic banks to expand new branches in the present situation as well In general, new entrant force does not affect too much on BIDV Hai Ba Trung branch Thirdly, the threats of substitutes are not tough Although there are available various substitutes, the branch with its own power does not bear a lot from the pressure of threats of substitutes The customers now are still interested in the deposit or the credit provided by the branch due to the safety and the convenience However, it is still necessary for the branch to improve and diversify its products in order to attract new customers and keep traditional ones Fourthly, the suppliers have a medium bargaining power to the branch The main suppliers of the branch are depositors and they have high power in supplying the branch with capital However, the bargaining power of other suppliers such as BIDV or the credit market is low when the branch can easily raise the capital from these sources Thus, the power of suppliers is medium to the branch The next one, the bargaining power of customers is also medium to the branch Although the customers of the branch have many choices of using the bank products and services with low switching cost and available information, the number of customers of BIDV Hai Ba Trung branch are still increasing and the diversification in customer types makes the branch not to suffer a lot from the bargaining power of customers In conclusion, the competitiveness of BIDV Hai Ba Trung branch is evaluated rather high Despite being competed severely by existing branches, with the ability and good performance, the branch is only be affected slightly by new entrants and the threats of Nguyen Thu Trang 36 ATCB - K11 Graduation Thesis Banking Academy substitutes Moreover, the bargaining power of both suppliers and customers is at the medium level to the branch Nevertheless, it is still essential and imperative for the branch to raise its competitiveness Nguyen Thu Trang 37 ATCB - K11 Graduation Thesis Banking Academy CHAPTER 4: RECOMMENDATIONS AND CONCLUSIONS 4.1 RECOMMENDATIONS To get the target of BIDV in period from 2010 to 2015 and improve the competitiveness, BIDV Hai Ba Trung branch should implement some strategies revolving to product differentiation, distributing network, staff quality and technology 4.1.1 Product strategies 4.1.1.1 Capital source mobilization The capital mobilization should be raised by two sources from both inhabitants in Hai Ba Trung district and corporations The branch can analyze the district and expand the marketing activities to all inhabitants in the area Moreover, the branch can give the special treatment to customers having the huge deposit Simultaneously, the branch should pay attention to establish the relationship with corporations and attract them by opening the payment deposit The branch can also utilize the capital by providing the services of salary payment or electricity and water prepayment through electric cards or ATM Product diversification can be a strategy to raise the capital Because each type of products has the special nature and suitability to different types of customers, the product diversification can attract and satisfy the need of different depositors The deposit products of BIDV Hai Ba Trung branch should have new and special property which can creates the differentiation of products of other branches Technological application should be used in capital mobilization Moreover, timely encouragement should be paid to the officials who are good at the capital mobilizing and to the customers having the huge deposit The specific target should be given to each department and official 4.1.1.2 Credit activities BIDV Hai Ba Trung branch should develop equally all long, short and medium-term credits which are used to construct facilities and develop the national products Nguyen Thu Trang 38 ATCB - K11 Graduation Thesis Banking Academy according to the guidance of Vietnam government and BIDV By seeking the customers actively basing on the investment projects of the government and defining the key areas, the branch can expand the credit market share and investment The credit improvement should be accompanied with the credit controll and bad debt settlement The delinquency has to be set in the suitable limitation, which can ensure the safety in the credit activities The credit information should be improved by frequently collecting the information of customers and social and economic development projects Actually the branch can deploy the suitable motivation and the credit product diversification to each type of customers 4.1.1.3 Product differentiation The product differentiation creates an advantage for the competitiveness of the bank BIDV Hai Ba Trung branch should concentrate on improving the quality of products and services by promoting the technology application and ISO process operation The product diversification can be implemented by expanding the foreign exchange activities, being an international card payment agency and developing the POS, Homebanking, and Internet - banking services Moreover, the retail banking should be paid more attention especially to customers as officials and inhabitants Researching and analyzing carefully the customers’ demands enable the branch to launch the suitable products and services 4.1.2 Network and staff strategies The branch should research and cautiously evaluate the economic potentials, the needs of using bank services of customers and the bank competition in Hai Ba Trung district, by which the branch can set up a suitable branch network The new transaction offices and savings counters can be opened if the analysis shows that they will operate efficiently and get the profit for the branch The qualification of human resources is always a key factor in the operation of the branch since all the strategies to run the branch or improve its competitiveness are planned and implemented by the staff of the branch To improve the staff quality, Nguyen Thu Trang 39 ATCB - K11 Graduation Thesis Banking Academy BIDV Hai Ba Trung branch should frequently organize the training courses These courses not only develop professional skills but also enhance the creativity of the staff Furthermore, the rational treatment should be introduced for the officials completing excellently the duty and the target and having the competent contribution, which is shown in the result of the business activities Salary should be paid reasonably basing on the complex and the risks of each type of job Moreover, the recruitment and the official promotion should be implemented sufficiently and the number of staff must be at the required level For example, there is at least one chief of department and one vice department chief in a transaction office The branch should also assess the ability of officials and rearrange positions properly in order to maximize their strengths 4.1.3 Technology strategies The branch should regard the technology as a key factor in developing the bank products and services Therefore, the investments in technology are an efficient strategy to enhance the competitiveness of the branch and satisfy the needs of customers BIDV Hai Ba Trung branch should buy the management and administration software which is compatible with the modern general bank system and can connect to the system of other branches 4.1.4 Customer management strategies It is necessary for the branch to care for the needs and requirements of customers so as to provide the various kinds of products and services which are suitable for different types of customers The branch should classify the customers basing on the needs and characteristics to build up a fitting strategy in approaching the customers The customer service department has to work efficiently and are supposed to be ready to support and answer the customers’ questions, provide the information of products to promote the needs of customers The branch should be positive in seeking the customers, helping them in analyzing their own business’s strengths, weaknesses and the capital situation by which the customer can choose the relevant services In the next years, the branch network expansion can also create more opportunities for the branch to approach the customers Nguyen Thu Trang 40 ATCB - K11 Graduation Thesis Banking Academy With the slogan “success of customer is success of bank”, BIDV Hai Ba Trung branch will properly deploy the customer strategy, which creates the firm background of the good credit relationship between the branch and customers 4.2 CONCLUSIONS In the light of findings, the researcher managed to answer the two research questions First, the competitiveness of BIDV Hai Ba Trung branch is at adequately high level Although the branch has to bear a high intensity from the rivalry among existing branches, the threats from new branches and substitutes are estimated to be low Two remaining forces including the bargaining of supplier and customers have medium influence level on the branch Therefore, with the strengths of staff quality and brand identification, the competitiveness of BIDV Hai Ba Trung branch is evaluated highly Second, in order to enhance the competitiveness, BIDV Hai Ba Trung branch should implement synchronous strategies focusing on the improvement of the product quality, the product diversification, the technology improvement and the staff cultivation Nguyen Thu Trang 41 ATCB - K11 Graduation Thesis Banking Academy REFERENCES Classification of companies based on nature of competition (2006) Retrieved May, 2012, from: http://valueinvestorindia.wordpress.com/2006/12/13/classification-ofcompanies-based-on-nature-of-competition/ Brue, M.C (2005) Microeconomics New York: The McGraw – Hill Companies Budd, L., & Hermis, A.K (2004) Conceptual framework for regional competitiveness (pp 1015 – 1028) United Kingdom: Carfax publishing D’Cruz, J., & Rugman, A (1992) New compacts for Canadian competitiveness Toronto: Diane Publishing Frank, H.A., & Bernanke, B (2001) Principles of Microeconomics New York: The McGraw – Hill Companies Gabriel, O.E (2006) Application of Porter’s five forces framework in the banking industry of Tanzania: Determine, Develop and Deliver Competitively IMS International Journal, India Jahan, N (2010) Ceramic industry of Bangladesh: A perspective from Porter’s Five Force model Retrieved May, 2012, from: http://www.banglajol.info/index.php/JBT/article/view/9983/7416 Nguyen, T.T (2008) Competition of Vietnam commercial bank – from theoretical and practical view Retrieved from June, 2012, from http://Luattaichinh.wordpress.com/2008/11/26/cạnh-tranh-của-cac-ngan-hangthương-mại-nhin-từ-goc-dộ-ly-luận-va-thực-tiễn-ở-việt-nam/ Omanidhi, O (2008) Porter’s model of generic competitive strategies: an insightful and convenient approach to firms’ analysis Retrieved from May, 2012, from http://findarticles.com/p/articles/mi_m1094/is_3_43/ai_n29477451/?tag=conten t;col1 Porter, M (1998) Competitive Advantage - 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K11