GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER
OF BUSINESS ADMINISTRATION PROGRAM
CAPSTONE PROJECT REPORT
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CHAPTER 1: THE BASIC THEORY ABOUT STRATEGIC MANAGEMENT
1.1 Concept, role and classification of strategic business ‹- 3
1.1.1 The concept of business strategy .cccceeccssseceesseeceseeeeseeeeseeeeesees 3
1.1.2 The role of business straf€gy 55c S +2 3
1.2 Process of building straf€BY .- c LH ng ng ng 5
CHAPTER 2 : ANALYSIS OF BUSINESS OPERATIONS OF THE HDBANK
2.1 Overview HDBank 0.0 ceecccccseessccseeseeeceeeceseceneeeceseeeeesecsseeeeeaeees 25
2.1.1 The formation and development of HDBank . «‹ 25
2.1.2 Results of HDBank business activities in the period 2005-2009 27
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` 2 Analysis of business activity HDBank 5+5 S5 +<<x+<+2 28
2.2.1 Analysis of hdbank *s actIvities environmen - « -«<c++ 28 se2alea — '( NĐTWBTEUNILHWENsemmsmarnsanstuaotrruivmamdttamaioontogttnnteoiBSUVVDUNDNEGASUBSOENSEHD 28 2.2.1.2 “9Ì nh 30 2.2.1.3 Matrix assessment ofenvironmental factors 33 2.2.1.4 Analysis Of COITP€tIfOFS SH 34 2.2.2 Internal analysis 36 sa TH ung ynnnasaosiromesrsinesnasortoaSntdtrsioanssteagiustomMonpeesinaonl 36 2.2.2.2 Weaknesses - LH HH ng 38
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CHAPTER 3: CONSTRUCTION OF DEVELOPMENT STRATEGIES
FOR BANK OF HOUSING DEVELOPMENT BANK 2010-2015
3.1 Development Objectives of HDBank, from 2010 to 2015 43
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3.1.2 Process of constructing development strategles - - 47
3.2 Construction and selection of HDBank’s development strategy
for the period ©F 2010 <2Q 1S couannasnrnitunrttiinioagintNi0nE038U308 318101313 8/480188/70700158 47
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CƠ vn Market entry Straf€Ø1€S SH HH ng it 49
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3.2.3 The strategies of developing new productfs and servIces 50
3.2.4 Strategies of Products and Services Differentiation 51
3.2.5 Strategies of expanding the nefWOrK . -ccccccs+<sssxsces 51
3.2.6 Strategies of improving financial capability .- 51
3.2.7 Strateples of Improvement of technoÏOgy « -sss<ss+<cc+s 51
3.2.8 Strategies of strengthening marketing actiVIfies .- 51
3.2.9 Strategies of improving management capability and quality
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3.3, Solution to implement the development strategies for the
period of2010 to 21 5 .- c1 2v 19 91 11 ng vết 55
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3.3.2 Expanding the network, 2010 — 201Š .s se sssssseeeree a7
3.3.2.1 Expanding the network to all cities and provinces in Viet
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~ 3.3.2.2 _ Opening transaction poInts at the supermarket - 60
3.3.2.3 (Q0enling the DønkÌiHE EH6O0UIÍETS seiasaeanasoaaanseaenanaaaae 60
3.3.2.4 Establishing and Expanding the ATM system 60
3.3.2.5 Merge and ACQuISIfIOn ĂẶ Ăn set 61
3.208 Comins ta iavest 1 (SCOOBY ns ccccecancnacomsornnanesans mewasteeasanseceomannas 61
3.3.4 Differentiation and diversification of products and services 62
3.3.4.1 COSY, BANAT a ssa cs es ct sna aa AR NR nA Nog Ss RA 62
3.3.4.2 Trust and personal financial consulting services 63
3.3.5 Improving the marketing Policies ccccsavecscsemssnasesves connsaqwera san counvannes 63
3.3.5.1 Perform regular analysis of the bank’s competitors 63
3.3.5.2 Developing and Promoting the Brand of HDBank 64
3.3.6 Improving Capacity of risk manàemen( ««+-««<<s«+ 65
3.3.7 Improving the quality of human reSOUTC€ - - 55+ +<<s52 66
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3.4.1 For the Government .ceceecesseeseseecsseeceseeeesenecesaeeeeeneeeseaeeseaeessaes 68
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ACKNOWLEDGEMENTS
After a hard time learning graduate programs in Business Administration (Gamba) Learn and study in a professional manner to complete this capstone, our team has received enthusiasm guidance, help and suggestions of teacher in Griggs University and the Center's ETC National University of Hanoi
First, our team would like to thank the teachers of Griggs University and other universities in Ho Chi Minh City, especially those dedicated of teachers who have taught us during class time at the school
And, our group also would like to thank the board of management of the Housing Development Commercial Joint Stock Bank of Ho Chi Minh city has created conditions for us to survey and collect data to write this topic
Although our group has made special efforts to complete this topic is
the best, but which time limited and the lack of experience, the topic
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ASSURE WORD
Our team declares that all the content and thematic data in this by our
own research, surveys, data collection and implementation
Students perform specialized
1 Nguyen Huu Dang
2 Tran Loi Vu
3 Chau Thanh Binh
4 Ho Huu Chau
5 Pham Quang Son
6 Nguyen Thu Quyen
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LIST OF ABBREVIATIONS
1 ABBank: AnBinh Bank
ABD: Asian Development Bank
AS: Attractive score Ect: Etcetera EIB: Eximbank GDP: The gross domestic product ae - & | Nĩ HDBank: Housing Development Commercial Joint Stock Bank of Ho Chi Minh City
8 ROA: Return on total assets
9 ROE: Return on common equity
10 QSPM : Quantitative Strategic planning matrix
11 SWOT: Strengths — Weaknesses - Opportunities and Threats 12 TAS: Total number of attractions
13 US: United States of America
14 USD: US dollar
15 VND: Viet Nam dong
16 ATM: Automatic Teller Machine
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LIST OF TABLES Page
Table 1.1: SWOT analysis of the company's matrix 20
Table 1.2: Table of strategic shifts focus 21
Table 1.3: Table changed growth strategy integration 21
Table 1.4: Table Quantitative Strategic planning matrix 23
Table 2.1: Some target business of HDBank 2005-2009 28
Table 2.2: Targets for activities in 2010 28
Table 2.3: GDP Growth rate in period 2005-2009 29
Table 2.4:Matrix assessment of environmental factors (EFE) 33
Table 2.5: The competitors HDBank Matrix 35
Table 2.6: Matrix internal assessment HDBank 4]
Table 3.1:HDBank activity 46
Table 3.2: SWOT Matrix combined 47
Table 3.3: Matrix QSPM group S/O 52
Table 3.4 Matrix QSPM group S/T 54
Table 3.5: Structure of funding for capital increase 56
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STRATEGIC DEVELOPMENT FOR
HOUSING DEVELOPMENT COMMERCIAL JOINT STOCK BANK OF HO CHI MINH CITY (HDBank)
PERIOD 2010 to 2015
1- INTRODUCTION:
In the year 2008, the world witnessed seriously crisis of the global economy, the collapse of financial institutions that were leading powerful on the
world For domestic banks, this year was also a year that financial market has fluctuated about the biggest interest rate from last to now This made a series of
bank have to face the risk of liquidity shortage, increasing the outstanding debts and decreasing profit, etc
However, HDBank has passed "this earthquake crisis” safely and
achieved some positive results such as total assets is VND 9,557 billions,
mobilized capital reach VND 7,772 billions, outstanding reach VND 6,175 billions The bad debt ratio is much lower than the average level of the banks in the past year, only occupy 1.93% on total outstanding; profit reach VND 80
billions and still ensure the 6% dividend for shareholders Especially, HDBank
has been ranked is A class bank by Vietnam State for many consecutive years
As announced by the IMF: "Until now, no organization can offer a comprehensive view and the most accurate about scale and impact of the global financial crisis in this time" Therefore, the risk can derive from two
possibilities: maybe is inflation or deflation with the ratio is 50-50 The banking
system will also be influenced strongly by the crisis since business is difficult,
the bank also difficult From the above practical situation, we decided to choose
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the topic: “Strategies Development for Housing Development Joint stock Commercial Bank of Ho Chi Minh city (HDBank) for period 2010 - 2015"
2- OBJECTIVE RESEARCH
With the knowledge has collected in the MBA courses, we have studied deeply and systematized principle theory of the strategy which made the background premise for building strategies HDBank from 2010 to 2015
Analyze and assess practicable activities, business environment of
HDBank, Opportunities — threats From that point, we analyze and select appropriately strategic methods for the development of HDBank in the coming years
The data extracted and compiled from statistical books, reports from the
website of HDBank, the annual report of the bank, in addition we also use some references, books, magazines and other major teaching materials for programs Master Business Administration in Griggs International University
We have used the method of comparing and synthesizing data of HDBank in the past and present as well as comparative norm, data on the results of business activities between HDBank with other commercial banks Besides, we also consult idea from senior staff of HDBank to order that the evaluation of scores in analyzing process of some matrixes is the most realistic and objective
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CHAPTER 1:
THE BASIC THEORY ABOUT STRATEGIC MANAGEMENT
1.1 Concept, role and classification of strategic business
1.1.1 The concept of business strategy
"The business strategy of a company is the direction and scale of an organization in the long-term: strategy will bring advantages to the organizations through the optimum arrangement of resources in a competitive environment meet market demands and expectations of stakeholders’
Summarize, we can understand the strategy are:
- Where enterprises strive forward in the long term (direction)
- Businesses must compete in which market and what kind of business
enterprises active in the market (market, scale)
- Businesses will carry how to active better than competitors on those markets (advantage)
- Which resources (skills, assets, finance, relationships, technical competence, and facilities) need to be able to compete (the resources)
- The factors from the external environment affect the competitive abilities of enterprises (environment)
- Which values and expectations need for person who has influence strongly inside and outside of enterprises (stakeholders)
Some basic concepts of business strategy as follows:
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% According to Fred R David: "Strategy is a science of art
and science of establishment, implementation and evaluation of decisions
related to many functions which allow an organization to achieve their objectives”
"Quote About Treatise on Strategic Management Author: Fred
R.David Statistic Publishing House "
According to the authors Garry D Smith, Danny R.Arold and Bobby R Bizzell: "Strategic Planning is the studying process of the
current environment as well as future, planning objectives of the
organization; propose, implement and supervise the implementation of decisions aimed to achieve there objectives in the current environment and future "
"Quote book Strategy and tactic business Co-author: Garry D Smith, Danny R Arnold, Bobby G Bizzell; Bui Van Dong translated - Ho Chi Minh City, 1994”
1.1.2 The role of business strategy
More and more society develops, enterprises must especially pay attention to plan and develop their strategies in order to create a core value of the business In all the business strategies, the most important part is the business strategy, other general strategies must base on business strategy to build and adjust perfectly Business strategy has really an important
signification with the existence and operation of the business However, business will not understand full about the important role of business strategy following the clearest way Through refer to lecturer about document of the
faculty business; we again summarize the most common about the role of business strategy with priority as follows:
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First, the business strategy helps businesses clearly see the opportunities ani threats in the business, thereby making the development of appropriate poicies to achieve objectives
Second, business strategies help managers predict some uncertainties
ani risks that will happen in the present and future and thence base on the poential of their enterprises to actively deal with this uncertain situation
Third, business strategy and coordinate closely the parts of the business; hep members promote the dynamism and creativity to achieve common goals
1.2 Process of building strategy
The process of building a business strategy is considerably a process of organization, it is conducted through several separate method, derived from the inde and outside factors of the company whose strategy is held by particular
fectures of the business Two this aspects have organic relationship in fact but conpletely separate from the purpose of analysis First is the formation; the
second is the deployment of strategy Considerably how the strategy should deermine, maybe assess completely under the analytical thinking and strategic
development of the company board
From the practical analysis and in-depth research, then, the process of
foming strategy includes the following activities: the process of analyzing the
Opvortunities and challenges in company’s active environment associated with
estimates and risks of alternative opportunities can define Before the selection,
lit 8 essential to analyze the strengths and weaknesses of the enterprises base on the available resources of the business In addition, objectively evaluate the
conpany's ability to access the market demand and be able to deal with these
risxss is essential The choice of strategy comes from the combination of portunities and the ability of the company at a level of acceptable risk called economic strategy
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There were many different views of dispute and the different approaches about strategy’s formative process, but in short the process of
building strategies are often built according to the following steps:
The process of forming the business strategy
Formation (decide what to do),
Perform (achieving results) identified opportunities and risks, identify sources of materials, engineering, finance, and business management, human values and determination of the board confirmed with social responsibility, corporate strategy, goals style, company’s determine policy and business areas Company’s structure and relationships, the division of labor, coordination
between departments, information’s system Organizational processes and
practices, standards and measurement’s methods, dynamical system, control systems, recruitment and promotion, the top leader of the company, the strategic - human resources organizations
Define the mission and goals of the organization
As we known, it is clear that really the strategist set up searching for solutions and deciding the choice must be based on clearly understanding what the enterprise is going to do The strategist must face with many different demands that people who give these demands believe that enterprises are born to serve their interests These requirements derive from the shareholders, employees, suppliers, customers, governments, and communities Therefore, these requirements must be evaluated, arranged in order of priority, so it is oriented activities as decision-making process of the organization Identify goals of the organization is not a theoretical problem commonly, that is the problem that the strategists must confront regularly Therefore, studying this issue is not only essential for the strategists but only for researchers
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Define the mission of the organization:
Before going to study this problem, we need to put a question: What is the goal, or mission of the organization?
Someone might think that the objectives of the organization can be considered as a reason for the existence of these organizations Therefore, the approach of setting strategic with objective problems will create orientation for the process of formatting strategy and influence of the strategic content
Here are some of the views given the mission of the organization
The mission of the organization includes all the basic views of starting stages and it will orient the organization in a certain direction (Latin Mittere to send; Cumming and Davies, 1994) Objectives of the organization are the most important point of the opening period for strategy’s formation, and it strongly
influenced by the cultural values of these organization (Mc Coy, 1985, Collins
and Porras, 1994) Some other views think that competitive ambition and
imtention is an important part of the mission of the organization According to
Campbell and Yeung, the mission gathers all the factors into a unified framework
Normally the establishment of a mission statement is an ongoing
process through six basic steps:
Step 1: form the initial idea for the business mission
Step 2: Survey the external environment and identify internal conditions
Step 3: Redefine the idea about the business mission
Step 4: Rebuild the company's mission
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Step 5: Implement the company's mission statement
Step 6: Review and modify the mission
Building of the mission statement did not only consider the wishes of leaders but also pay attention to the inside factors and outside of the company
Define strategic objectives:
Objectives specified orientation to need pursuing It affects all kinds of
business activities Such an increase of 15% of the share market requires
different actions to improve production efficiency Objective is also a stimulant Source Revenue reach 1 billion in next year could be challenging for
enterprises Finally, the objective was used as a tool to assess and control It allows checking the result that set up is consistent with the requirements given or not allows giving appropriate actions to achieve desired results, consolidating
responsibilities with work Objective has also a central role is the result of the comparison With each business, goal can be long-term, medium term or short term Economists assume that businesses set up their goals in eight main areas Market position - Innovate - Productivity - Financial and logistical resources - Profit
- Development and efficiency of staff - The attitude and efficiency of workers - Social responsibilities
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If missing one in these eight areas will create serious consequences for the entire enterprise To determine the short-term goals without harming the
long-term goal is required a balance between these goals
In the corporate, a goal set for a specific job can be a constraint with other work For example, for sales, goal is maximize sales to be bound by production capacity, delivery time, product quantity, the production cost These factors themselves are the objectives can be set to produce However, the
implementation of a goal may conflict with binding targets to which it can be
calculated
The setting of targets is not a simple matter entirely or subjective to
have an appropriate target For the enterprise, the target must meet one of the
following factors:
First goal must be clear really An unclear target would affect badly organization’s operation For example, HDBank’s goals become the leader Bank
at Vietnam market, would lead to justification for the Bank's activities, even contradictory explanations Next target should have its own characteristics; a goal’s formation according to generic style such as an increase 5% market share
will not mobilize maximize of resources Raise the company's market share by
any way or just rely on a specific type of business A goal requires realistic (possible), an impossible target will reduce engagement of all members of the
Organization
Identifying target for each stage must not only base on the mission statement but also calculate the impact of other objective factors These are inside and outside factors of the company
* The internal elements:
+ The ability of companies is a very influential factor to determine the
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objectives of the organization Calculating capabilities of human and material resources is the factor that decides feasibility of target selection Target system should be developed so that available abilities can take advantage completely
but cannot exceed the existing capacity
+ The views of company’s leaders: As we know, in particular the Strategic objectives or target system have always been built by the company’s leaders Therefore, the subjective factor in building them is inevitable
+ The company’s past results bring conditions to implement the present
target system, because the results always enclose the extremely valuable reality
experiences
+ The owner of the company or the employees: The goal’s formations have been dominated and influenced by this group Owner is people who are financing the activities of the company, responsible for the assets of the company, always want to increase rapidly the company's assets Employees are the people who carry out these goals They always desire objectives’ performance will contribute to increase add value and quantity of their life standards
* External factors:
+ Business environment: it affects all activities of the business
Therefore, it can govern successfully implementation or not the objective’s
system given In order that company’s operation advantaged is system’s business targets set must be consistent with the business environment that businesses involved
+ Customers, competitors and other subjects directly affect the survival
of the company The company's goal is to satisfy customer’s needs, the social
subjects and limit the strength of competitors by creating competitive advantage
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fo: themselves superior
Analyze the business environment of the enterprise:
The impact of external environment for business strategy:
Any business also exists in a certain business environment Its existence ani development bear huge impact from the external business environment The imoact of the external business environment can positively and may toward the nezative Enterprises want to survive and develop; normally enterprises must get the trend of environmental development and activities are consistent with the exiernal environment
Business environment is including the economic environment or macro environment, industrial environment or operational environment Operational
environment is a key factor affecting daily operations of enterprises while the mizcro environment is not directly affected, but this environmental impact is ducable and landmark in the process of development
Macro environment:
Macro environment consists of many different factors impact indirectly
onthe activities of the business through its impact on the environmental factors
ofthe industry Inside, five elements have been assessed by managers is the mst powerful factors such as economic factors, institutional, legal, social tecanology and social nature
+ Economic factor: Economic factors have great influence to the
enerprises as well as the most regularly mobilizing factor, the most unpredictable of the macro factors Its movement is always contained both Opportunities and challenges for businesses Which are the most prominent tireids They are:
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- The trend of gross domestic product and gross national product: this trend directly impact on the rate of economic growth, the growth of available income of residents It will change consumer’s demand, the size of the market,
affect the balance of supply and demand of products
- The interest rate is a key factor affecting the trend of consumer savings and investment; it makes consumer’s demand go up or down, stimulating or restricting investment to expand production
- Rate of inflation: affect predictability of investors when inflation is escalating, prediction will become more difficult and investment will bring more
risks Thereby, investment reduce, output go down and affect to competition in the industry Balance of payments, exchange rate: affect to market and external economic relationships of enterprises, sometimes leading to change economic status in general
The economic policies reflect the views of government in industrial
development
+ Institutional factor and legal:
System includes the views, policies, regulations, rules and procedures It affects the survival and development of the industry, the economic status that will impact on the operation of the business
+ Element of technology:
With rainstorm development of scientific and current technology, the
life cycle of technology more and more shorten The invention of new technology will destroy the old technologies The appearance of new
technologies will increase the advantages of alternative products, products become more perfectly, and product’s price becomes cheaper and can appear the
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new market Businesses therefore need to increase exploitability and new technological research
+ Social factors, population, customs, hobbies, ect are directly factors influencing consumer needs of society
+ Natural factors: is a significant factor in people's life Natural factors are considered as less volatile factor, however in recent decades the natural environment is being seriously downgraded That may be very influential to the mobilizing trends of the business
Operational environment:
Environment is associated with the operation of the enterprise; the
elements of the operational environment will determine environment of the
investment, the intensity of competition and profitability in the industry
According to Professor Michael Porter context of the operational environment affected by the five competitive impacts: the risk due the entry of potential
competitors, intensity of competition from companies in the industry, power of buyers and seller, threat of substitute products
Five competitive impact model
Bargaining power of suppliers
Risk of potential competitors Bargaining power of buyers The rivalry of the companies
oe
oe
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Threat of substitute products
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Source: http://www.valuebasedmanagement.net" & "Porter, M.E (1979) "How Competitive Forces Shape Strategy", Harvard Business Review,
March/April 1979
Potential rivals: the companies have been not involved in the industry yet, but ability is likely to enter the industry The appearance of this competition
will intensify competition; reduce profits in the industry Penetration of potential
rivals depends on the entry barriers of the industry If entry barriers are great,
penctration decreases and conversely According to Joe Bain there is three main barriers to hinder penetration: Customer’s loyalty with the company's products, an absolute advantage in costs, the economic advantages of scale If businesses have a strategy to raise the entry barriers to industry, it will limit the risk caused by the entry of potential rivals
The current competition: The competitor is often pressure and threat
directly to the company Competition from existing companies in the industry is growing increasingly; they more and more threaten the ability to make profits,
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the existence and development of the company Because of this competition forced the company has to increase investment costs in order to differentiate products, services access market or reduce cost Intensity of competition in the sector often depends on factors:
Quantity and capabilities of companies in the industry: quantity and capabilities of companies in the industry decide the nature and intensity of competition in the industry In an industry with large company quantity and similar ability, competition tends to take place violently and lean to more price
war In the case, a few powerful companies dominate, these companies often
have links together to dominate the market and companies have less powerful than they usual must comply with rules, which the leading companies given
Market demand: Demand for products, services of the company' impact on largely the intensity of competition When product’s demand tends to increase, companies will be easier to defend market share or expand their market share, competitive nature less than violently However, demand tends to dlecrease, companies want to protect market share and further develop the market, and they inevitably will be involved in a fierce battle with other
companies
This cost is increasing; it is hard really for company to go out sectors, so businesses will have to fight for survival That makes the intensity of competition more and more increase, especially in the sectors of maturation or
diegradation and conversely, if barriers of retreat are low, the level of
competition in the industry tends to decrease
Besides these factors, the intensity of competition also depends on other factors such as the distinctiveness of products and services between companies im the industry, the growth of the industry, betting on the sector, fixed cost, ect
Customer: pressure from major customer derives from the ability of
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customer’s bargain Ability to bargain expressed mainly under two forms:
ability requires to reduce prices and improve quality When the bargaining
ability of buyers increases, the companies do not have enough ability to survive in the sector and if the response will lead to reduce profits This pressure will
increase as products and services are little differentiation, consumers purchase
and use large quantity, numbers of customers become smaller, buyer and user have the full information, ect
Supplier: supplier may pressure the company through requirement of
price increase or decrease quality of the inputs factor of the company It directly
affects the cost and quality of products and services of the company so it will influence customers' responses
Alternative products: those products are different but meet the same
consumer demand The emergence of substitute products creates the risk of
price competitiveness and profitability for the company
Assessment of environmental impacts:
To assess the impact of the environment, people often use conventional methods of quantifying the impact of environmental factors to the operation of
tlhe business, then synthesize all of the elements The process is conducted
tlhrough five steps:
Step 1: Make a list of factors is crucial for the success of the business
Step 2: Determine the importance of each factor to the industry
Step 3: Determine the weight of each factor in relation to the reactivity of the current strategy of the company or the importance for
enterprises
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Step 4: Calculate point of each element
Step 5: Community of the total points
After calculating the total number of points we will see the impact of the
environment for business, identify opportunities and challenges that businesses need to overcome This is the basis for business strategy to ensure compatibility of strategies and active environment
Analyzing the enterprise:
Ability of the business is fundamentals to determine what businesses
can do, the strategy of the business has successfully implemented or not To ensure the viability of the strategy, when building the strategy, we have to assess the situation, identify strengths and weaknesses thereby determine the capacity of discrimination or competitive advantages of enterprises Internal analysis was
conducted on the following aspects:
Value chain analysis of the organization:
Value chain is a combination of activities to increase business value
Organization's value chain is composed of two activities: primary activities and
Support activities
The main activities: the activities associated with products and services
of the business It is the purchasing, management of inputs, marketing operation
of services and after-sales These activities are evaluated to see whether it can Save cost, enhance product quality, and satisfy best service to customer
requirements If these activities more and more save, enhance quality and satisfy
customer demand, the company's value chain more and more appreciated and
the company has a competitive advantage
Support activities: besides the major activities associated with products
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and services of the company, support activities also indirectly impact on the
products and services These activities help major activities of the business
carried out better, more effective Them called is the human resources management activities, technological development, acquisition, ect
Financial analysis: financial situation, the financial ratios reflect effective, financial capability of the organization Financial condition of the company does not only reflect company’s operational capacity in the past but also reflect the ability of the company's development in the future The financial ratios are often interested in performing the financial analysis in building the Strategy include rotational indexes: reflect the company's ability to meet financial obligations of its short-term; it is current and quick ratio, in addition debt ratio, ROA, ROE, ect
Analyze organizational culture and reputation of the business:
Organizational culture plays an important role in the formation of the
Organization Every company needs to make its members understand the
Objectives and operational views of their companies That will boost the
company's members strive to achieve common objectives set out by the
company
The company's reputation also contributes significantly to implement successfully the objectives of the company Reputation is a form of intangible
walue that the company was formed in the process of long-term development If a@ company has reputation on market, It will more easily reach new markets, products are accepted more easily, ect However, building reputation is as
difficult as maintaining and consolidating that reputation In addition to internal analysis, we are also interested in other factors such as the legality of the company's activities, leadership culture, ect
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After analyzing the internal capacity of the company, strategic planners make meaningful comparisons That is the comparison reflects the company's growth and its strength in relation to competitors in the industry
The comparison is usually done in three basic directions:
+ Comparisons over time: that is to compare the activities of companies in different periods associated with its historical context
+ Comparing standards of the industry: make comparisons of the
company's activities with the standards of the industry and the main competitors It shows that company’ position ranked in the industry
+ Identify key success factors of the industry: It is a few factors, but
have significant impact to the success of companies in the industry
+ At the end of the internal analysis, we must tabulate to collect
strengths and weaknesses of the company This is not only the final work but also a result of internal analysis stage The collective board of strengths and weaknesses are set up according to the principles of the summary of
Opportunities and challenges in environmental analysis
Combine two above tables - opportunities and challenges, strengths, weaknesses - we get the results of collective analysis of strengths, weaknesses, Opportunities and threats (SWOT matrix) This is the final result of
environmental analysis and internal analysis; it is also a premise for the strategic planning of the company
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Table 1.1: SWOT matrix analysis of the company
SWOT Opportunities (1 2 3) |Challenge (1 D san số? nen)
Listing opportunities List the risk Strong points (1 2 .3)|Coordinate S /0 Coordinate S/T
List the strengths Use strengths to take advantage of opportunities Use strengths to minimize the impact of threats Weak points (1 2 3) List the weaknesses Coordinate W / 0 Limit the weaknesses to take Coordinate W / T
Limit the weaknesses and advantage of opportunities avoid threats
Based on the SWOT matrix, company finds strategy to promote the
Strengths to overcome weaknesses, take advantage of opportunities and avoid
the challenges which environment posed
Building and strategic choices: Strategy is a system of big policies and measures to implement and coordinate the action program, helps organizations complete goals effectively Corporate level strategy is a strategy covering the
entire operations of the company intended to compete most effectively,
dominating the market, ensuring sustainable development, which can be selected from different types of strategies:
Focused growth strategy: to pursue this strategy, the company's Strategic mainly focus on improving the product or market has no change of Other factors The companies try to exploit every available opportunity of product; existing service or market is active
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G Global Advanced Master of Business Administration
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CO1.Strategic Management Group 6 Table 1.2: change of concentrative strategy Products and services Market Industry Sector level Technology Implementing or new Present or new Present Present Present
Focusing growth strategy allows the company to put energy on the
favors of their activities, exploit the remarkable strengths to develop business However, focusing growth strategy missed opportunities to expand the market, do not take advantage of its outstanding features to capture opportunities for development of other industries
Growth strategy of integration (links) in the case of the Company to pursue this strategy will seek measures to take upon themselves the stages of
input production or product consumer Implement growth strategies of
integration, companies can perform the integration forward (counterclockwise)
or backward integration (upon dimensional, entire integration or full integration, local integration or external integration)
Table 1.3: change of integration strategy Products and services Market Industry Sector level Technology (Sector)
Implementing Present Present New Present
CG Global Advanced (aster of Business Administration 21
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Growth strategy of integration helps companies save costs and reduce
merketing costs, better quality control, take advantage of business opportunities ani more active in planning the production plan of business This strategy can
be applied to ability businesses and catch the opportunities with long-term goals of the business
Growth strategy through diversification: the company pursued a stritegy of diversifying the implementation of measures to develop product, new services and dominated new market to increase the performance of the conpany Companies can implement strategies of concentric diversification; diversify consortium which the absence of any relationship in terms of technology to products and current services Diversification strategies make the mest of surplus financial resources, create new competitive advantages, reduce
ris< But the diversification strategy also requires companies to improve
meagement, carefully calculate the benefits and costs of development in this đlir>ction
Cutting strategies: are necessary when the company rearrange to serve a iew phase This strategy was implemented when the business that the companies pursue long-term development prospects no longer, economic is insability or the emergence of new opportunities is more worthwhile Cutting sitritegies aim to reduce costs, recovery of capital investment
Mixed strategy: a company in the same period can apply many
dlifferent strategies Companies can promote development in this area but have
cul down in other business areas These activities are aimed at successful implementation of the overall objectives of the company during the
iimolementation of the strategy
The strategic choice which of the above strategy is dependent on the aibiity of the company and the environmental conditions involved From the
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SWOT analysis, the company will choose the best suitable business strategy
Quantitative Strategic planning matrix QSPM (Quantitative Strategic planning
matrix) will be used as follows:
Table 1.4: Table of Quantitative Strategic planning matrix
The main factor Replicable strategies Attractive basis Classification | Strategy | Strategy 2 points AS | TAS | AS | TAS Inside Elements Outside Elements | Plus the total number of attractions
With AS are attractive point and TAS is the total number of attractions Number of attractions (SA) will be from 1 (not attractive) to 4 (very attractive)
Calculate the total number of attractions (TAS) by multiplying the point’s
classification with attractions
The strategy is built based on analyzing and assessing the business environment, the first based on the key success factors inside and outside, thereby determining the strategies to achieve goals out; the strategy of choice requires a good sense by multiplying the point’s classification with attractions
Level strategic building
Business level strategy:
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For the monophyletic companies, a sector-level strategy coincides with the company's strategy However, for the multipurpose company, the business which companies participate, companies must build a separate business strategy Due to the characteristics and environmental conditions for each sector is not the same, so the development strategy for each sector cannot be identical
International business strategy:
To be concerned with international business strategy, we usually mention two issue oversea market expansion and competitive strategy Competition issues on the international market also have features similar to competition in the domestic market, but the competition on the international market is more complex than the domestic market
To penetrate the international market we need to pay more attention to the countries selection, the time and possessive To making decision the above issue dependent on environmental conditions, the company’s capacity and the company targets to achieve
Chapter I Summary: This chapter we focus on making the definitions and viewpoints on business strategy, strategic management building processing of the enterprises It helps us to analyze date and develop strategies HDBank
period 2010 - 2015 and more vivid reality
Trang 35Gricos) CO1.Strategic Management Group 6 UNIVERSITY CHAPTER 2 ANALYSIS OF BUSINESS OPERATIONS OF THE HD BANK 2.1 OVERVIEW HDBANK
2.1.1 THE FORMATION AND DEVELOPMENT OF HDBANK
HDBANK was established on 04.01.1990, is one of the first joint stock commercial banks of Vietnam with initial charter capital is 3 billions Originally brought HDBank has brought mission “building the house and develop the urban, contribute for building Ho Chi Minh City become civilization and modern” After nearly 20 years of development, HDBank has been continuously innovation and growth, diversification of products and services By the end of 2008, HDBank had gained charter capital is 1,550 billions, the number of
employees over 1300 people
To September 2010, HDBank has 73 transaction points on the
nationwide which distribute in most major economic centers of the country such
as Ho Chi Minh city, Hanoi, Da Nang, Nha Trang, Binh Duong, Can Tho, Long An, Vung Tau, Dong Nai, Nghe An, and has a strategy to open branches abroad
In the integration trend of Vietnam banking and financial sector and
global economic integration, HDBank has successfully implemented stage 1 (2009 - 2010) of project “Restructure 2009 — 2012” in order that HDBank
become a retailing bank, multifunction, access to international standards in management; increase the capital, develop modern technology; build human resources stronger and more professional; provide diversely products with high quality to meet the satisfaction of the all customer Besides, HDBank builds
initial investment bank model to maximize the efficiency of capital business
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HDBank has established an executive management structure consistent with the standards of organization and operation of commercial banks according
to decree 49/2000/ND-CP dated 12/9/2000 of the government and the direction
advice on organization and operation of the board, control board, general director of state bank and people's (decision dated 27/08/2001 1087/QD-NHNN of the state bank) Specifically, the operating system's administrators HDBank include:
+ Board of Management: board of management of HDBank consists of 6 members and do not directly participate in the administration Board meets querterly to discuss issues related to the activities of the bank, to consider and approve the annual report, quarterly reports in emergency cases, the board will have an extraordinary session Board serves the overall strategy and long-term Orientation to the bank, setting financial goals assigned to the executive board Board directly supervise the activities of the executive board through a number
of professional councils and boards by the board as the establishment of internal
aucit, credit council, the council asset management liabilities and assets, and investment council
+ Executive board: executive board consists of chief executive in
gereral and deputy general director of "assistant" to the director general
Executive board has specific functions of the overall strategy and objectives by the board proposed by the plan, business plan and advise the board on strategic
issues, key policies, direct and administer all activities of the bank
+ Internal audit committee: the task is to check and supervise the
opaation of the units under HDBank system in accordance with law, regilations of the banking sector and the regulations, rules, procedures HDBank professional Thereby, the internal audit to evaluate the quality of administration
anc Operation of each unit, to advise the executive committee, propose the necessary solutions
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+ Credit committee: this committee is the highest level of credit menagement activities it made the distribution of approved funds for the credit sector, the credit limit set for the council using the branch and decide the bank's lending to financial institutions in and outside water; decisions about credit standards, credit quality monitoring and review other issues related to credit
Operations
+ Council and management of property assets with debt: the council is responsible for building the financial targets for debt and asset management assets effectively and timely; liquidity management and balance maturity differences of each currency; provisions of liquidity reserves, managing interest rate risk, exchange rate decisions on capital and capital structure, interest rate policy; analysis of economic performance branches and sales of the entire system
2.1.2 Results of HDBank business activities in the period 2005-2009
After 20 years of operation, HDBank had a boom on the scale of
Operations and business results Specifically, in 2007 marked a year of
successful operation in its development process Total assets in 2009 have reached the threshold of $ 1 billion (19,127 billion), up 50% compared with 2008, much higher than the average of the industry (estimated at 22%)
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Table 2.1: Some target business of HDBank in the period 2005-2009
(Unit: million USD) Targets 2005 2006 2007 2008 2009 Total assets 115.3 | 200.75 | 691.1 477.9 | 956.35 Total income 9.8 14.9 38.85 62.3 80.85
Profit before tax 2.43 4.7] 8.39 | 4.01 | 11.25
Profit / equity capital (ROE) 18% | 21% | 19,2% | 56% | 12%
Source: Annual reports of HDBank
In 2010, HDBank continuously strive to develop with a rapid rate (see table 2.2)
Table 2.2 Targets for activities in 2010
Unit: million USD Target Year 2010 Total assets 1,250 Capital raising 1,050 L Outstanding loans 525 Profit before tax 15 | Develop 25 additional units: 5 branches and 20 transaction offices
2.2 ANALYSIS OF BUSINESS ACTIVITY HDBANK
2.2.1 ANALYSIS OF HDBANK ‘S ACTIVITIES ENVIRONMENT
2.2.1.1 OPPORTUNITIES:
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- The continuous growth with high rates of Vietnam’s economy
Vietnam's economy in recent years has been good developments In five recent years, GDP growth rates continuously increase over the years (see table 2.3) Table 2.3: GDP Growth rate in 2005-2009 period Year Growth rate GDP 2005 8,40% 2006 8,17% 2007 8,48% 2008 6,23% 2009 5,32%
Source website: General Statistics
GDP Growth rate of annual average about 7% and stable in recent years has markedly improved the income of the people That set the foundation for the development prospects of capital bank markets that still have many unexploited potential Simultaneously, the government's policy develop private business sector has created a boom about the quantity of non-state enterprises In 2009 only, Vietnam had more 37,000 non-state enterprises operate These factors
create great opportunities for development of banking services
- Globalization and international economic integration
Word and regional economic integration are going strongly and worldwide, especially for developing countries International integration is a
development opportunity for countries and creates many challenges that nations
must face to survive and develop In our country today, international integration and economic liberalization has been routes and irreversible, it is a route to
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eliminate the provisions of protection under the agreement on trade Vietnam - US (BTA) as well as the process of joining AFTA, WTO and _ the
implementation of bilateral agreements with other countries like Japan
Opportunities that Vietnam banks can take advantage of integration:
+ Integration makes banks opportunities to diversify services in order to
meet the business needs of enterprises and the public
+ Opportunities to attract investment from overseas in the capital fields,
technology, management, and flow about capital of foreign enterprises on Vietnam’s banks are an indispensable trend Through the capital investment, they also invested in banks in terms of technology and management
- The legal framework for banking activities has increasingly improved
State bank is urgently reviewing the systems and policies in the banking
sector to supplement, improve perfectly for conformity with the integration commitments Warning system for unusual fluctuations of exchange rates, interest rates and reinforce the credit of credit institutions are also building
urgently
With these policies, documents will be issued in the near future will help banks get a legal framework, help stabilize operations and deploy more new products and services such as home-banking, internet- banking , Ect
- Population size and structure make advantages for the development of banking services
Vietnam’s current population has more than 82 million people; a majority of working age is actually a potential market for products and banking Services