Eim report the entrepreneurship report an analysis of uob (united overseas bank) and the introduction to the new innovation

--- Page 1 --- Assignment cover page --- Page 2 --- The Entr epreneurship Report An analysis of UOB ( United Overseas Bank ) and the introduction to the new innovation. Group 6_EIM-T224WSB-1 Lectur er: Dr Nguyen Thi Phuong Date: 21/07/2024 --- Page 3 --- Table of content 1. Executive Summary 4 2. Evaluation of current innovation 5 2.1 Green Fintech 5 2.2 Finlab 5 2.3 Compare 6 2.4 Contrast 6 3. Current marketing analysis 7 3.1 Marketing environment 7 3.1.1 Internal environment 7 3.1.2 Micro environment: 7 3.1.3 Macro environment 8 3.2 SWOT Analysis 10 3.2.1 UOB: 10 3.2.2 CIMB Bank 12 3.2.3 Shinhan Bank 13 3.3 Perceptual Position: 14 3.4 Target market 14 3.5 Marketing mix 16 4. Microeconomics analysis: 18 4.1 Current patterns of demand 18 4.2 Supply 18 4.3 Price elasticity of demand 19 4.4 Current market structure AND Consequence 20 5. Problem identification 20 6. The new innovation, target market and opportunity 22 6.1 The new innovation 22 6.2 Target market: 23 6.3 Opportunity 23 7. The new marketing mix strategy 24 7.1 New Product Concept 24 7.2 New Price Concept 25 7.3 New Place Concept 25 7.4 New Promotion Concept 26 References List 27 Appendix 28 --- Page 4 --- 1. Executive Summary This study aims to examine the current operational status, present innovations, and existing challenges of United Overseas Bank (UOB), and propose new improvements to address these issues. The report begins by highlighting two innovations currently being implemented by UOB: Finlab and the company''''s initiatives in integrating operations with environmental protection. This section will help readers better understand the company''''s current innovations, providing a com\prehensive overview and thorough evaluation. Next, the report will analyze the current marketing and microeconomic environment by applying marketing environment analysis methods (including internal analysis, microenvironment analysis, and macroenvironment analysis), SWOT analysis, and identifying UOB''''s target market along with its two main competitors, Shinhan Bank and CIMB Bank, in the Vietnamese market. This will provide insights into UOB''''s current operational situation. Following this, the report will delve into the cybersecurity issues that UOB is currently facing, proposing innovations, the target market for these innovations, and the opportunities that come with implementing them to address the issue. Finally , the report will provide a more detailed analysis of the feasibility of these innovations through a marketing mix strategy . --- Page 5 --- 2. Evaluation of current innovation 2.1 Green Fintech In the past few decades, Vietnam has encountered several environmental problems. Air pollution, water pollution, ecosystems, climate change... in many areas are at critical levels. Acknowledging that, in recent years, Vietnam has demonstrated strong concerns to undertake different environmental protection efforts. According to UOB''''s 2023 Business Outlook (SME and Large Enterprises) Study , more than 50% of SMEs in Vietnam have adopted sustainable practices . As an aspect of innovation, to meet social needs and keep up with trends, UOB develops green fintech in Vietnam. UOB provides green credit products through a green loan program for businesses and individuals to invest in environmentally friendly projects, with attractive interest rates and other incentives. For example, UOB Vietnam offers a Green Mortgage program with a special interest rate for Cardinal Court Phu My Hung. Cardinal Court is described as a "green oasis" with eco-friendly features and is the first project by Phu My Hung to receive EDGE green building certification (UOB Vietnam Green Mortgage) 2.2 Finlab “FinLab” or “Financial Laboratory” refers to an organization providing suitable financial solutions for businesses that aim to improve as well as enhance the finance services industry through advanced technology and creative ideas. UOB FinLab is a significant synthesis innovation to Viet Nam market that combines technologies, ideas, or products currently in better solutions that brings potential benefits to entrepreneurs, SMEs and finance organizations. Moreover , record the interest figures that about 98% SMEs contribute 40% of the country''''s GDP (Vi , 2024), UOB FinLab focuses all efforts on promoting the implementation of revenue growth strategies with the powerful support of digital technology (Vietnam+ (VietnamPlus), 2023). According to Francis and Bessant (2005), the innovation capability should be expanded as the 4P''''s of innovation framework including Product, Process, Positioning and Paradigms instead just target the Product enhance aspect. Following that, “Paradigms” explain the changes in the mental model of UOB FinLab fostering a collaborative ecosystem by creating a playground with 5,000 Viet Nam SMEs using digital solutions for maximizing revenue. The proof of the success

Assignment cover page

The Entrepreneurship Report

An analysis of UOB (United Overseas Bank) and the introduction tothe new innovation.

Group 6_EIM-T224WSB-1Lecturer: Dr Nguyen Thi Phuong

Date: 21/07/2024

1 Executive Summary

This study aims to examine the current operational status, present innovations, and existingchallenges of United Overseas Bank (UOB), and propose new improvements to address theseissues The report begins by highlighting two innovations currently being implemented by UOB:Finlab and the company's initiatives in integrating operations with environmental protection.This section will help readers better understand the company's current innovations, providing acom\prehensive overview and thorough evaluation.

Next, the report will analyze the current marketing and microeconomic environment by applyingmarketing environment analysis methods (including internal analysis, microenvironment

analysis, and macroenvironment analysis), SWOT analysis, and identifying UOB's target marketalong with its two main competitors, Shinhan Bank and CIMB Bank, in the Vietnamese market.This will provide insights into UOB's current operational situation.

Following this, the report will delve into the cybersecurity issues that UOB is currently facing,proposing innovations, the target market for these innovations, and the opportunities that comewith implementing them to address the issue Finally, the report will provide a more detailedanalysis of the feasibility of these innovations through a marketing mix strategy.

2 Evaluation of current innovation2.1 Green Fintech

In the past few decades, Vietnam has encountered several environmental problems Airpollution, water pollution, ecosystems, climate change in many areas are at critical levels.Acknowledging that, in recent years, Vietnam has demonstrated strong concerns to undertakedifferent environmental protection efforts.According to UOB's 2023 Business Outlook (SMEand Large Enterprises) Study, more than 50% of SMEs in Vietnam have adopted sustainablepractices As an aspect of innovation, to meet social needs and keep up with trends, UOBdevelops green fintech in Vietnam UOB provides green credit products through a green loanprogram for businesses and individuals to invest in environmentally friendly projects, withattractive interest rates and other incentives For example, UOB Vietnam offers a Green

Mortgage program with a special interest rate for Cardinal Court Phu My Hung Cardinal Courtis described as a "green oasis" with eco-friendly features and is the first project by Phu My Hungto receive EDGE green building certification(UOB Vietnam Green Mortgage)

2.2 Finlab

“FinLab” or “Financial Laboratory” refers to an organization providing suitable financialsolutions for businesses that aim to improve as well as enhance the finance services industrythrough advanced technology and creative ideas UOB FinLab is a significant synthesis

innovation to Viet Nam market that combines technologies, ideas, or products currently in bettersolutions that brings potential benefits to entrepreneurs, SMEs and finance organizations.

Moreover, record the interest figures that about 98% SMEs contribute 40% of the country's GDP(Vi , 2024), UOB FinLab focuses all efforts on promoting the implementation of revenue growthstrategies with the powerful support of digital technology (Vietnam+ (VietnamPlus), 2023).According to Francis and Bessant (2005), the innovation capability should be expanded as the

4P's of innovation framework including Product, Process, Positioning and Paradigms instead

just target the Product enhance aspect Following that, “Paradigms” explain the changes in themental model of UOB FinLab fostering a collaborative ecosystem by creating a playground with

5,000 Viet Nam SMEs using digital solutions for maximizing revenue The proof of the success

innovation is The FinLab released in 2015, proud of leading 15 start up from “capital call” 50

million USD to the business cost 300 million USD (VCCorp.vn, 2023).

2.3 Compare

Both innovations use fintech solution software to support entrepreneur start-ups in finance;however, there are some differences GreenFintech focuses on green fintech which providessolutions for social and environmental challenges for entrepreneurs' start-ups in green andsustainable technologies that aim to strengthen UOB’s reputation whereas Finlab focuses onwider fintech solutions such as payments, lending, wealth management, and enterprise solutionsand also fintech education that aims to support the bạnk’s broader digital transformation andinnovation strategy in modernization.

3 Current marketing analysis3.1 Marketing environment

3.1.1 Internal environment3.1.2 Micro environment:

Vietcombank,BIDV, Vietinbank,ACB…

Foreign banks:

HSBC, Citibank,Standard Chartered,ANZ, Maybank,Hana Bank,.

Individual customers

Business customers

Bank Domestic banks:

Vietcombank,BIDV, Vietinbank,ACB

Foreign banks:

HSBC, Citibank,

Individual customers

Business customers

Standard Chartered,ANZ, Maybank,Hana Bank,.

CIMB bank(Competitor)

Bank Domestic banks:

Vietcombank,BIDV, Vietinbank,ACB

Foreign banks:

HSBC, Citibank,Standard Chartered,ANZ, Maybank….

ShopeeCGVLazadaFinhay

SHINHAN Bank(Competitor)

CIMB Bank( Competitor)

Vietnam has astable politicalenvironment thatcreates favorableconditions forbanks like UOB,Shinhan, andCIMB to conductbusiness.

Additionally, theVietnamesegovernment offerstax incentivepolicies for foreignenterprises, furtherfacilitating theoperations offoreign banks likeUOB, Shinhan andCIMB in theVietnamesemarket.

As one of the rapidlydeveloping

economies inSoutheast Asia,Vietnam offers manyopportunities forforeign enterpriseslike UOB, Shinhan,and CIMB to grow.However, whenoperating in theVietnamese market,foreign banks aresubject to theregulations of theState Bank ofVietnam regardinginterest rates on loansand borrowings Thissignificantly impactsthe lending portfoliosand interest marginsof UOB, Shinhan andCIMB and otherforeign banks.

The banking sector inVietnam is adoptingpowerful technologiessuch as fintech anddigital transformation inits business operations,creating opportunitiesfor UOB, Shinhan andCIMB to offer

innovative products andservices Additionally, asVietnamese customersbecome more tech-savvyand use online bankingservices, there is anopportunity for banks todevelop and expand theironline distribution

channels.

SHINHAN Bank(Competitor)

CIMB Bank( Competitor)

Banks operating inthe Vietnamesemarket must complywith local bankinglaws and regulations.The legal frameworkincludes requirementsrelated to capital,anti-money

laundering (AML)policies, and dataprotection laws.Additionally, banksmust adhere to laborlaws and intellectualproperty laws withoutviolations.

Vietnam's dynamicpopulation presentssignificant potentialfor banking services.Moreover, as livingstandards in Vietnamcontinue to improve,there is a growingdemand for premiumfinancial productsand services.Additionally, theincreasing financialawareness amongVietnamese peoplecreates favorableconditions for UOB,Shinhan and CIMBto reach potentialcustomers.

Growing environmentalawareness and

government regulationson sustainability mayencourage UOB,Shinhan and CIMB toadopt green bankingpractices and offereco-friendly financialproducts However,natural disasters andclimate-related risks inCentral Vietnam couldaffect banking

operations and assetquality, necessitatingeffective risk

management strategiesfor banks.

3.2 SWOT Analysis

3.2.1 UOB:

● UOB has a widedistributionnetwork with 68branches inSingapore andover 500 officesin 19 countriesglobally.

● One of the groupmembers isworking towardssustainabledevelopment inSoutheast Asia.● Successful

automation ofbankingactivities.

● Global markets andinvestment

management providea comprehensiverange of treasuryproducts andservices.

● Possibility of higherloan rates accordingto the report

published inBusiness Times.● Cyber security still

has many issues withapplying AI inbanking activities.

● The increase infinance andincreasedspending ofbusinesses inVietnam.● Plans to expand

into other globalmarkets.

● Technologicaldevelopmentsince the

FinTech industryis growing.● Interest rates

decreasedcompared toprevious years.● Vietnam is oneof the countrieswith the bestinterest ratecontrol.

● The elusiveness oftax rates in

Vietnam and taxpolicies.

● Unusual changesin interest rates inVietnam.

● Currencyfluctuations aresignificant,especially giventhe volatile

political climate inglobal markets.● The rise and

development ofmultinationalbanks.

● A dynamic marketenvironment likeVietnam makes itdifficult to bevigilant and takeprecautions beforeany crisis occurs.

3.2.2 CIMB Bank

3.2.3 Shinhan Bank

3.3 Perceptual Position:

Positioning map is built based on available data and ranking table Reputation and bankingmodel are the characteristics that foreign banks in Vietnam must consider In general, in terms ofreliability in the Vietnamese market, Shinhan bank is a long established bank According to theDecision Lab’s ranking (2023), Shinhan is in first place of the 100% foreign capital banks inVietnam, while UOB is fourth In terms of banking mode in the digital age, a lot of banks aregoing to convert to digital banks Especially, the fact that CIMB always leads the trend ofdigitalization is proved by lots of significant awards UOB and Shinhan have also joined digitalbanking industry and are developing.

3.4 Target market

entrepreneur,business executive,small and

medium-sizedenterprises (SMEs)

Income: From

middle-class tohigh-net-worth

Entrepreneur,employer, small andmedium-sizedenterprises (SMEs)

Income: From

middle-class tohigh-net-worth

employer, businessexecutive

Income: The affluent

segment includesindividuals andfamilies with higherincomes and assets

City: mainly in

HCMC and Hanoi

Country: VietnamCity: spread evenly

across the country,mainly in HCMC andHanoi

Country: VietnamCity: one in Hanoi,

one in HCMC

Psychographic Lifestyle: need

investment forcompany, prioritizefinancial solutions

Personality: digital

technology lover,innovation lover

Lifestyle: priorize

personalize solution,financial solution,trust reputation,Enjoy convenient,service promotion

Personality: digital

technology lover,innovation lover

Lifestyle: Enjoy

Personality: digitaltechnology lover,

trying new brand

- Convenient- Digital applied- Personalized data

- User’s status: ex user and new user

3.5 Marketing mix

Marketing MixElement

ProductFinance services

Loan, Deposit, Credit & DebitCard, invest banking, insuranceand wealth management

Diverse range of services ensureproviding product suit

customer’s need

Customer are confusedbecause there are manyoption

Digital banking

Mobile App, Internet Banking,E-Bank

Convenience and 24/7 working Risk of cybersecurity

Price Competitive interest rates,commission, fees, pricing forloans and deposits.

Engage many customer useservices and products

Highly competitive ratescan negatively affect thebank’s profit margins.

PlaceBranch Network: extensive

branch network across ASEAN

Digital Channels: mobile apps

and online banking platforms

Larger range of accessibilityfrom direct to online, ensurescustomers can access funds andperform transactions even outoffice hours

Create opportunities forscammers to stealpersonal information(Digital Channels &ATMs)

PromotionAdvertising Campaigns:

website, online, SMS, Email,and social media)

Sponsorships and CSR:

participates in sponsorships andcorporate social responsibility(CSR) activities

accounts and increase the bank'sreputation.

People The employee gets a

professionally trained program+ Resolve customer

+ Consulting Services+ professional work

Providing High-quality serviceaimed at customer satisfactionand loyalty.

Takes a lot of time andtraining costs.

Requires highlyspecialized knowledgeand skills, so it is difficultto find suitable people.

Process Specific process for opening andusing accounts on all financeservices

(credit, deposit, loan, saving,invest, etc)

The operating process takesplace quickly and transparently,ensuring the storage of

transaction evidence on thesystem.

Over-reliance ontechnology can delaytransactions and causedamage to customeraccounts when systemsfail.

Physical card

Hard card with basic

information, and bank’s logo

Suitable for customers who arenot familiar with using

Physical cards haveenvironmentalimplications.

4 Microeconomics analysis:4.1 Current patterns of demand4.2 Supply

In general, there is the same current supply that UOB, Shinhan and CIMB bank have, includingdiverse loans accounts (personal and business), deposits, and financial services (such as wealthmanagement, insurance, and investment banking) In addition, digital banking like internetbanking and mobile applications are common currently because of its convenience and quicktransaction process Supply curve trend to rightward on deposits and financial services, due tothe rate of interest saving increase, engage more and more customer deposit cash in banks andrequire banks to intensify provide more finance services Regarding competitive advantages,UOB bank has a savings interest rate lower than competitors, CIMB and Shinhan Bank, 4,65%(offline&online), 4,8% (offline&online), 4,7% (offline) - 4,9% (online), respectively(VnExpress, 2024) However, loans service trend to leftward when corporate loans decreasedinfluenced by gloomy economic situation, there are 80,5 thousand business new establish nearly120 thousand business all country (increased 6.1% over the same period last year), however, 71,4thousand discontinued operations for a limited period of time business (increased 18.6% over thesame period last year, average 18,4 thousand business withdraw from the market for 1 month(Thông Cáo Báo Chí về Tình Hình Kinh Tế - Xã Hội Quý II và Sáu Tháng Đầu Năm 2024,2024) Corporate loans decrease, banks are forced to increase interest rates to reduce the risk ofincreased bad debt, leading to a decrease in money supply In addition, increased bad debtnegatively affects banks' ability to lend, reducing credit supply.

4.3 Price elasticity of demand

The services that UOB, Shinhan Bank, and CIMB provide are banking services Due to the lackof detailed information for each bank, this report uses a panoramic view of the entire bankingindustry In addition, the service prices of the banking industry are service fees, and these costsare affected by increases and decreases in interest rates Customer demand for banking servicescan be seen through the increase or decrease in the CASA ratio (A bank's total deposits are inboth current and savings accounts) When deposit interest rates for the term 12 Months of decline(early 2020 to mid-2023), the CASA rate tends to increase slightly (Figure) This may show anegative correlation between these two ratios, meaning that when deposit interest rates decrease,customers tend to use more bank services According to the figure, we can estimate PED (Priceelasticity of demand) from early 2023 to mid-2023 based on the change in CASA ratio andcapital mobilization interest rate in 12 months from 0 to 1 From there we can conclude that theentire banking industry's demand for banking is inelastic with price Through the generalsituation of banks in Vietnam, it can be seen that all three banks, UOB, Shinhan, and CIMB,have similar trends According to a report by Huong (2022), interest rates can cause systemicrisks in Vietnam, these impacts change with each stage of the economy However, as seenthrough the PED ratio, the banking industry is quite stable and less affected by interest rates,which is especially beneficial for UOB in an environment where interest rates are difficult topredict like Vietnam.With continuous economic growth and the increase in the number ofbusinesses in Vietnam, the number of newly established businesses in 2023 is 1.2 times theaverage level in the 2017-2022 period (baochinhphu.vn, 2023) As a result, UOB is likely to