Formulating business strategies for retail banking business of joint stock commercial bank for investment and development of Vietnam in the period of 2013 – 2017

CAPSTONE PROJECT REPORT FORMULATING BUSINESS STRATEGIES FOR RETAIL BANKING BUSINESS OF JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM IN THE PERIOD OF 2013 - 2017 Class: GaMBA.M0111 Group 5: Pham Viet Anh Nguyen Hoai An Le Thi Bich Hanh Nguyen Chien Thang November 2012 CapstoneProject_G5.GaMBA.M0111 Page STATEMENT OF AUTHORSHIP & ACKNOWLEDGEMENT After a period of research and synthesis, with the hard work and efforts of the group members, we have completed this Capstone Project Report The group affirms that this is the research of our group The data published in this report which is taken from research, reports and articles of organizations and individuals, is quoted and used appropriately in accordance to the academic regulations The results presented in this report are valid and have not been published in any other research We would like to express our deepest thanks to Griggs University, ETC – Vietnam National University – Hanoi and our lecturers for giving us valuable guidance and advice Sincere thanks should also go to the staff of ETC for providing us with dedicated support during the course Finally, the group would like to thank Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) for helping us in the process of doing this research by providing us with useful data and information, enabling us to complete this Capstone Project Hanoi, November 15th, 2012 GROUP OF AUTHORS CapstoneProject_G5.GaMBA.M0111 Page LIST OF TABLES Table 1.1 SWOT Matrix Table 1.2 Quantitative Strategic Planning Matrix (QSPM) Table 2.1 Account outstanding of different banks Table 2.2 Mobilizing capital from individual deposit Table 2.3 Position of banks in domestic debit card Table 2.4 Position of banks in international credit card Table 2.5 Table 2.6 Position of banks in POS Insurance exploitation of banks Table 2.7 Table 2.8 Remittance activities of banks External Factor Evaluation - EFE Matrix Table 2.9 Table 2.10 Consolidated Balance Sheet Income Statement for Business Divisions Table 2.11 The capital adequacy ratio(CAR) of other banks Table 2.12 Internal Factor Evaluation – IFE Matrix Table 2.13 Table 2.14 Competitive Profile Matrix (CPM) SWOT analysis Table 3.1 Comparison of alternative strategies using QSPM Strategy implementation plan for retail banking business of BIDV in the period of 2013-2017 Table 3.2 LISTS OF FIGURES Figure 1.1 Figure 1.2 Figure 2.1 Figure 2.2 Figure 2.3 Figure 2.4 Figure 2.5 Figure 2.6 Figure 2.7 Figure 2.8 Figure 2.9 Business strategic management process The Five Forces Model of Michel E Porter The organizational structure of BIDV Vietnam’s GDP growth rate from 2005-2011 CPI growth of Viet nam from 2005–2011 Total assets scale of BIDV compared to other banks Total equity scale of the BIDV compared to other banks Gross profit of BIDV compared with other banks The distribution channel systems of branches The ATM and POS distribution channel systems The credit rating options (BEINorm) CapstoneProject_G5.GaMBA.M0111 Page CONTENTS INTRODUCTION .6 CHAPTER I: THEORETICAL FRAMEWORK FOR BUSINESS STRATEGY FORMULATION 1.1 Basic concepts of strategy and business strategy: 1.1.1 Definition of strategy: 1.1.2 Business strategy: 1.1.3 The roles of business strategy 10 1.2 The process of strategy formation 10 1.2.1 Strategic vision and mission statements 11 1.2.2 Strategic objectives 11 1.2.3 Analysis of external environment 11 1.2.4 Internal environment analysis 15 1.2.5 Formulating alternative strategies and selecting appropriate strategies 16 1.2.6 Developing an action plan and implementation solutions 17 1.2.7 Review and adjustment 17 1.2.8 SWOT Matrix 17 1.3 Business strategy selection 19 1.3.1 Generic competitive strategies 19 1.3.2 Quantitative strategic planning matrix (QSPM) 19 CHAPTER II: ANALYSIS OF STRATEGIC BUILDING FOUNDATION FOR RETAILING ACTIVITIES OF BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM JSC 21 2.1 Introduction of BIDV 21 Fields of operation 21 History of establishment and development 22 Organizational structure 22 2.2 Analysis of BIDV business environment 24 2.2.1 Analysis of macro environment influence on BIDV’s performance 24 2.2.2 Analysis of industry influence on retail activities of BIDV 30 2.2.3 Analysis of BIDV's internal environment of BIDV 38 2.2.4 Competitive Profile Matrix (CPM) 56 2.3 The summarization of SWOT analysis of BIDV’s retail operation 58 CHAPTER III: STRATEGY SELECTION AND IMPLEMENTATION SOLUTIONSTO DEVELOP RETAIL BANKINGBUSINESS OF BIDV 61 3.1 BIDV’s vision, mission and strategic goals 61 CapstoneProject_G5.GaMBA.M0111 Page 3.2 Strategy selection for the development of retail banking of BIDV in the period of 2013 - 2017 62 3.2.1 Summarization of the strategies from SWOT analysis 62 3.2.2 Selecting business strategies for retail banking of BIDV – using QSPM matrix 62 3.3 Strategic solutions 65 3.3.1 Solutions of investing in equipment and IT system 65 3.3.2 Product and service solutions 66 3.3.3 Customer solutions 69 3.3.4 Distribution channel solutions 70 3.3.5 Solutions in terms of supporting policies 72 3.3.6 Developing and reinforcing the human resources, building BIDV corporate culture 72 3.3.7.Enhancing the marketing programs for retail activities 74 3.4 Implementation Plan 75 CONCLUSIONS .81 REFERENCES 82 CapstoneProject_G5.GaMBA.M0111 Page INTRODUCTION The necessity of the research topic: The focus of expansion and development of the retail sector will be the decisive factor affecting the leading role of commercial banks in the future This is an inevitable trend of the banking sector in Vietnam when the international economic integration is more intensive and competitive, the utility needs of people are the increasingly diverse, and commercial banks are trying to expand their market share, access to a large amount of people who still not know the banking products and services Further, retail banking services bring higher revenue and less risky for banks In fact, the commercial banks in Vietnam have initially focused on exploiting the retail markets through the expansion of the network activity in order to provide banking products and services to individuals and households; promoting applications in banking technology, developing of new services, multi-utilities such as internet banking, home banking, mobile banking, etc This is considered as one of the trend in choosing the long-term growth if banks want to continue maintaining and expanding market share in the future Retail development helps banks with larger market, higher economic efficiency because products are offered in bulk to large number of customers, which generates more sales and distributes business risks Vietnam is considered to be a market with a lot of potential retail banking development The attraction of retail banking operations has been confirmed Therefore, not only domestic commercial banks but also foreign banks are looking for ways to penetrate deeper into Vietnam market Potential business market with increasing competition force banks to have effective business strategy, and the Bank for Investment and Development of Vietnam (BIDV) is not an exception BIDV has been known as a bank operating mainly in the field of wholesale and retail operations have accounted for only a small percentage and have-not been focused for the development BIDV takes many advantages for retail development but so far this activity has not developed commensurate with the potential and advantages With the goal of becoming a universal bank with large scale in the region, BIDV must diversify its business areas, maintain the strength of a wholesale bank, the bank should also promote effective strategies for retail operations From this necessity, our team has selected the theme: “Formulating strategies for retail banking business of Joint Stock Commercial Bank for Investment and Development of Vietnam during the period 2013 - 2017” with the desire to apply CapstoneProject_G5.GaMBA.M0111 Page our knowledge to contribute to the overall development of the bank Research purposes: - Systematize a theoretical basis for business strategy and effective methods to choose appropriate analysis models for business strategy formulation - Apply this theoretical basis to focus on situational analysis and capacity evaluation of the BIDV in the deployment of retail banking services - Propose solutions and recommendations for further development of the bank's retail banking activities Subject and scope of the research: - Subject: Retail Activities at the Bank for Investment and Development of Vietnam - Scope of research: the entire system of the Bank for Investment and Development of Vietnam Retail banking can be considered as a strategic business unit (SBU) of BIDV because of the following reasons:  Retail banking department (“Department”) is an independent and fully functional department operated as both cost and profit center of the branch  BIDV has fully delegated authority and responsibility to a director of the department who reports directly to the Management Board of BIDV  The Department has its own budget, marketing plan, competitors as well as manpower The contribution in terms of money of the department is clearly calculated and monitored by BIDV BIDV implement retail banking activities since 2009 and has independent parts management and implementation of retail banking activities However, the retail banking activities are spontaneous and haven’t a clear strategy Research methodology: The data were collected and compiled from the annual reports, financial statements, from the website of BIDV and other banks, the published information from the State Bank and other reference materials, books, magazines, specialized teaching materials We have consulted BIDV experts in the assessment of weight in the process of analyzing the matrix Our group mainly base on statistical method, method of analysis, comparison, and synthesis to conduct the research Structure: CapstoneProject_G5.GaMBA.M0111 Page In addition to the introduction, conclusion, references, the project consists of three chapters: Chapter 1: Theoretical framework for business strategy formulation Chapter 2: Analysis of the foundation for formulating business strategies for retail activities of Joint Stock Commercial Bank for Investment and Development of Vietnam Chapter 3: Strategy selection and implementation solutions to develop retailbanking activities of BIDV in the period 2013 - 2017 Hanoi, November 15th, 2012 CapstoneProject_G5.GaMBA.M0111 Page CHAPTER I: THEORETICAL FRAMEWORK FOR BUSINESS STRATEGY FORMULATION 1.1 Basic concepts of strategy and business strategy: 1.1.1 Definition of strategy: There are many different definitions of strategy; opinions of approach have steadily converged to create a relative united definition of strategy: strategy can be understood as “a coordinated series of actions which involve the deployment of resources to which one has access for the achievement of a given purpose” Whatever approach we apply in each perspective and definition, there are three common characteristics of strategy: - Establishment of an overall course of actions to wards the long-term goals in the future; - Key policies and measures to implement the program; - Establishment of action sequences, ways to proceed and allocate resources to achieve the goals 1.1.2 Business strategy: 1.1.2.1 Definition of business strategy Business strategy is business-orientation with goals in a long time period along with policy systems, measures and ways to allocate resources to achieve the objective of the business in the corresponding period of time Thus, the business strategy of an enterprise must be goal-oriented, long-term and must be done as a deliberate process 1.1.2.2 Classification of business strategy There are many ways to classify business strategy, which creates diversity in the methods of implementing business strategy Classification of business strategy by levels: - Corporate-level strategy - Business-level strategy - Functional-level strategy Classification of business strategy by strategic process: - Orientation strategy - Action strategy CapstoneProject_G5.GaMBA.M0111 Page 1.1.3 The roles of business strategy Business strategy is increasingly becoming a tool to orientate the business development with goals that are in accordance with objective conditions of the business environment Business strategy helps enterprises understand and take advantage of the business opportunities from the business environment; more over, it can capture the most profitable opportunities to achieve its goals 1.2 The process of strategy formation In order to create a strategy, it is necessary to have a strategic mindset and have answers to three questions: "Where are we now? Where we need to go? And how we get there?” through the following steps Figure 1.1: Business strategic management process Inputs Internal enviroment Strategic Intent Strategic Mission Stategic Incoes Strategic Actions External enviroment Strategy formulation Business level strategy Acquisitions and Restructuring Competivity Dynamics International Strategy Strategy implementation Corporate Level Strategy Corporate Covernance Structure & Control Cooperative Strategy Strategic Leadership Enterpreneurship Inovation Strategic Competitiveness Above Average Return Feedback Source: Strategic management Textbook–Griggs University CapstoneProject_G5.GaMBA.M0111 Page 10 + Synchronizing the policies among the branches in the system, especially amount the branches in the same area (about pricing or appraisal decision…) + Reduce the professional operation steps by implementing the operations based on the automatic system of profile tracking and collecting debts from customers’ accounts + Outsourcing some stages in the credit provision and management process, such as real estate pricing or processing secured transactions + Making a breakthrough in the market based on BIDV’s competitive advantage of large capital and simplified procedures 3.3.2.4 Transfer and payment services - Being determined as the core products of BIDV, which help attract, maintain customers, as well as support the cross selling of other products - E – banking service + Standardizing the current services, both in pricing and quality + Continuing developing the transfer and payment transactions via the Internet, VCC and mobile banking - Card services + Developing some high – end card products for the VIP customers + Maintaining and stimulating the utility services for BIDV’s core product, the Flexiscard + Implementing the chip – based applications to develop the multifunctional cards, such as identification or point accumulation, besides the core functions like cash withdrawal and bill payment + Expanding the POS network for domestic cards, focusing on shopping, education, medicare, electricity, telecommunication and other activities - Overseas currency exchange transfer + Cooperating with some domestic money transfer companies to implement the home delivery of overseas currency exchange + Cooperating with labor export companies to implement the overseas transfers via BIDV system - Building the friendliness feature of the transfer and payment services based on: + Optimum security and confidentiality CapstoneProject_G5.GaMBA.M0111 Page 68 + Timely transaction operations + Simple transaction steps and procedures + 24/7 consultancy and support services 3.3.2.5 Other products and services + Collaborative products with member companies, such as BSC, BIC, VALC… - Develop new added value products such as bancassurance, safe box lease in the branches that have sufficient conditions and demands 3.3.3 Customer solutions 3.3.3.1 Target customers The target customers of BIDV in the next years are divided into main groups: - Special customers (VIP): large assets, high income and willing to pay for deluxe services - Knowledgeable customers: the officials from government authorities, corporations, enterprises and foreign organizations - Middle – class customers: live and work in middle – class urban areas 3.3.3.2 Customer development Based on the determination of target customer, BIDV need to synchronize the methodology of searching and developing new customers: - Utilizing the system of customer identification, focusing on the current customers to introduce new products - Cooperating with the wholesale and investment banks to find new customers - Developing the system of branches to expand the new market with reasonable managerial tools - Cooperating with other big enterprises (such as telecommunication, aviation, electricity and post-office companies) to utilize their current customers - Utilizing the marketing activities (direct sales, telesales) 3.3.3.3 Customer service and customer relationship management (CRM) Establishing the CRM system to classify, manage and keep track of the customer personal information to better design the products, as well as other managerial factors CapstoneProject_G5.GaMBA.M0111 Page 69 - Establishing the Help Desk/Customer Services Desk in branches and transaction offices with the tasks of supporting, consulting, as well as collecting feedbacks from the customers - Using Website and Contact Center as main channels in collecting feedbacks and providing consultancy to the customers - Expanding the working time (noon shift, Saturday shift) for the customers who are not available in business hours, which helps enhance the competitive advantage of BIDV compared to other commercial banks This policy needs to be synchronized in the same area and suitable to the needs and actual conditions of this area - Continuing applying “The 10 standards and principles of business transactions” all over the system; periodically evaluating each individual of the company - Usually organizing customer service programs 3.3.4 Distribution channel solutions Besides the diverse product portfolio, distribution channels are one of the most important factors of electronic banking operation The experience of the developed banks all over the world all implies that “Retail is the issue of distribution channel” Therefore, the distribution channels, including both the traditional (branches, dealing office, etc) and E– banking system (internet banking, ATM, POS, Mobile phone, SMS banking, Contact Center), need enhancing in effectiveness and efficiency Moreover, this also helps BIDV better classify and serve the customers, as well as enhance the revenues and business results Other channels need considering, such as regional agency, retail banking sites, mobile channels or Autobank 3.3.4.1 The orientation of strategic solutions in terms of retail banking distribution channels: - By 2015, the normal transactions, such as query, transfer, deposit, will be implemented on electronic channels (ATM, Internet, Mobile, Phone, SMS banking, Autobank, etc.) - The branch channel is mainly used for providing the individual investment consultancy to the VIP customers as well as selling product package to this particular segment - Developing the mobile banking channel, from which the mobile sales staff, i.e direct or door – to – door selling, will be established to better serve the customers’ needs - Establishing the Autobank system at the important points, such as trading centers, big blocks or near BIDV’s main branches to facilitate the self – service, which helps save time CapstoneProject_G5.GaMBA.M0111 Page 70 of doing transactions for the bank tellers and give them chance to serve as customer relation staff - From 2014, the retail service centers will be built in the center of big cities, with the form of convenience stores with to employees to serve 800 – 1000 customers They are aimed to sell various types of retail banking products with easy access and high convenience 3.3.4.2 For the distribution channel systems of branches - Renovating the system to make it more effective and synchronized with the renovation of dealing rooms - Continuing establishing new branches, especially focusing on Hanoi and Ho Chi Minh City areas, which are now potential with their developing network - Establishing new policies, incentives and supervision of the performance of the network’s components such as rewards and punishments, in order to enhance the effectiveness of the traditional distribution channels - Determining the orientation that branches focus on developing the individual consulting services, as well as increasing the number of sales staff to serve and consult customers at home or in any place that they prefer when the e – banking channel is strongly developed 3.3.4.3 ATM distribution channel system - Rearranging the ATM network to be the Autobank in big cities, in order to promote the brand of BIDV, as well as cut down on some banking operations such as inventory, security or hygiene management - Evaluating the effectiveness of ATM and POS points, based on which, the ineffective ones will be removed to save the resources for other potential services, such as POS, credit cards or visa debit cards - Timely implementing the plan of supervising the expansion of ATM system, in which 800 new machines will be supplemented from now to 2015, to better meet the customers’ demand - Reinforcing the research and development of card added value services, which provide customers with new diverse services and facilitate them to use e – banking channels instead of the traditional ones CapstoneProject_G5.GaMBA.M0111 Page 71 3.3.4.4 E – banking distribution channel system (Internet, Phone, Mobile, SMS, Contact Center) - By 2015, in order to lighten the load of traditional channels, as well as reducing operational costs, the majority of services will be operated on e – banking channel - Researching, developing and completing the new product portfolio, especially the collaborative payment products, to diversify the service portfolio and payment utilities, which motivates the customers to use electronic banking channel - Establishing the coalitions between BIDV and its business associates to enhance the utilities to the customers, as well as utilizing the cross selling and marketing activities 3.3.5 Solutions in terms of supporting policies 3.3.5.1 Establishing the measurement and evaluation system of retail activities Since the retail scope and number of products are large, which requires different distribution channels and a large number of staff; it is vital to establish a evaluation system of each activity in the operation of retail banking There are different approaches: - Product and service approach - Distribution channel approach - Staff, department and branch approach Based on each period’s goals and strategy, some key retail criteria will be applied to evaluate the performance of the agency - Developing retail promotion programs, such as wholesale goal exchange, agency – based retail, etc 3.3.5.2 Enhancing the risk management in retail banking Evaluating the establishment of process and policies for products and services - Supervising the operation risks of retail activities - Evaluating the risk and loss levels of retail activities 3.3.6 Developing and reinforcing the human resources, building BIDV corporate culture Human resources play an important role in retail activities Despite its competitive advantage of intellectual background of employees, the employees themselves are lack of experience and skills of retailing Therefore, the process of recruiting, training and evaluating staff needs professional implementation This helps synchronize the acknowledgement of the whole system, as well as motivate the employees in this new operation CapstoneProject_G5.GaMBA.M0111 Page 72 3.3.6.1 Selection and allocation of human resources - Building a clear system of criteria for each position in the company in general and the staff for retail activities in particular - Allocating the whole retail staff from the head quarter to the branches, in accordance with the professional criteria for each task, so that the productivity will be enhanced; the staff may be reallocated to other positions, which motivates their creativity, as well as reduce their inertia - Planning to develop a professional sales team both in quantity and quality These employees understand BIDV’s products and services and have professional sales as well as customer service skills 3.3.6.2 Training The training needs implementing frequently to update the staff with new product information and policies Due to the fact that the number of sales staff is too large to be handled in the same training, this process will be implemented in a suitable model based on each situation and training content It may include: - Providing training programs to the key staff of the branches, which will afterward provide training to other employees in the same branches - Selecting some specific branches based on specific product and service to offer training programs - Researching and applying the online training method: the training contents will be uploaded on the internal network, so that all the staff can access and the online tests - Designing a forum for the retail staff from head quarter to branches to exchange and share the experience and knowledge about new product and policies - Creating an electronic version of retail banking operations manual with frequently updated information in order to support the sales staff in performing their job 3.3.6.3 Evaluation - Establishing a system of standardized criteria for each position of retail staff, including Requirements of profession and Requirements of sales and customer services skills - Considering implementing the prompt evaluation system that enables customers to evaluate the quality of services right after the transactions CapstoneProject_G5.GaMBA.M0111 Page 73 - Maintaining the “Customer Relationship Staff of the Year” voting program accompanied with awards and appreciation 3.3.6.4 Compensations and rewards - Applying the reasonable system of compensations and rewards that correctly evaluates the performance of each employee to enhance his/her motivation for work - Applying the reward system for the retail staff based on publicly standardized criteria, which indicates how BIDV appreciates the efforts of each employee 3.3.6.5 Building BIDV’s corporate culture - Enhancing the cooperation among the departments to better achieve the goals - Eliminating the negative working style and manner that are still available among some employees, especially the management staff 3.3.7.Enhancing the marketing programs for retail activities - Forming a professional marketing team from the head quarter to the branches, based on which, to form a marketing department in retail area at the head quarter to deal with various activities: market research, promotions, PR and advertising (including BIDV internal PR activities) The main source of these marketing activities is located at the customer relation retail agency - Building a synchronized PR program to boost the retail brand in the first years This activity will help public BIDV’s strengths, which creates a united effective BIDV brand, as well as a business competitive advantage for the retail banking under the circumstances of unexpected difficulties To effectively deliver this strategy, the slogans and target customers of PR and marketing programs need well synchronizing - Professionally and periodically researching, surveying and evaluating the retail market and customer behavior to provide the valuable input for product development and marketing activities - The marketing programs need to be suitable with the product characteristics but the target customer, market segments and regions as well - Implementing the reward point accumulation program for the individual customers of BIDV’s retail services, in order to enhance their loyalty - Rebuilding BIDV’s website to obtain the new image of a friendly accessible sales one CapstoneProject_G5.GaMBA.M0111 Page 74 - Utilizing the relationships with partners and current corporate customers to implement the marketing activities, which not only helps reduce the costs but also enhance the efficiency of marketing activities (Co-Marketing) 3.4 Implementation Plan CapstoneProject_G5.GaMBA.M0111 Page 75 Table 3.2: Strategy implementation plan for retail banking business of BIDV in the period of 2013-2017 Clue Units Co-coordinated Units Tasks I HEAD QUARTER 1.1 Consolidating management capacity of Head quarter Additional functions to Board of Retail banking, supplement more duties and responsibilities Board of retail Establish Administrative Division banking 2013 2014 Board of Human resource organization x x Establish a centre in the Southern area x Establish a product development Division Research, transfer the function of ATM, POS management from Board of branch management to Card centre x Board of branch management; Cardcentre Board of Retail Supply enough staff for retail banking Division Banking; Board of branch Improve capacity of staff in managing retail management; banking activities Cardcentre 1.2 Consolidate operation model of retail banking business at branches Send official document to Branches in order to Board of retail direct them to found Personnel customer banking relations Divisions CapstoneProject_G5.GaMBA.M0111 2017 x Establish E-banking Division Card centre 2015 2016 Page 76 x x x x x x x x x x x x Budget implemen tation strategy (Bilion VND) Check and complete the document describing functions, responsibilities of each part, position related to retail banking activities Branches Board of retail banking in Branch x x Do the plan to allocate retail employees for branches x x x x x x x x x x x x x x x x Establish the Financial Advisory Division Establish Private banking Division/Group Board of Plan and Development Board of retail banking Do the medium and long term plan for retail banking business and evaluation criteria Centre of training and human resource CapstoneProject_G5.GaMBA.M0111 x x x x Concretize annual business plan and build the tactic plan for each product x x x x x x x x x x Make report and propose to Board of Directors necessary measures to deploy the plan effectively and synchronously Board of Retail Banking x Direct and guide the implementation of branch retail banking operations Board of Plan and Development Set up structure and limit for retail activities in business plan x x x x x Identify criteria and suitable content to training for retail banking staff at branches x x x x x Page 77 organization Set up criteria and segment the market x x x x x Guide the branches to carry out customer policies based on particular market segment x x x x x Research and Develop new products based on the characteristics of each market segment x x x x x Deploy marketing program based on each market segment x x x x x Board of controlling Build and deploy the scoring system for credit risks individual customers x x x x x Related Units Standardize current products and service x x Related Units Research and Develop new products x x x x x Related Units Research and Develop unique products x x x x x Complete and carry out the policies of issue Board of controlling credit for retail customers credit risks x x x x Board of Brand and Public x x x x Related units CapstoneProject_G5.GaMBA.M0111 Organize the marketing activities Page 78 x 20 40 Board of technology, Technology centre, Card centre and related units Board of branch management; Board of retail banking Board of branch management Board of technology and Technology centre Board of human resource organization Research, build and deploy contact centre x x x x x Research and implement specific design for transaction space of retail customers x x x x Build the e-payment gate x x x x x 20 Expanse the network of transaction office, branches x x x x x 30 x x x x 20 200 Card centre Board of retail banking Do the pilot and then deploy the establishment of individual financial centre (pure retail transaction office) Board of technology and Technology centre Develop Auto banking model x x x x x Develop system of ATM, POS Upgrade current products, service x x x x x x x x x x R&D new products, service x x x x x Risk management related to card business Board of branch management/ Card centre 60 x x x x x Board of technology and Technology centre CapstoneProject_G5.GaMBA.M0111 Page 79 300 Board of Finance Establish, complete and implement the Board of financial motivation policies on retail activities Plan, Board of retail Complete and deploy the incentive mechanism banking for retail banking activities x x x x x x x x x x x x x Set up a mechanism to allocate cost and benefits to each retail activity 30 II BRANCH Found the individual customer relations division and organize retail products and service Board of human resource organization and Board of retail banking CapstoneProject_G5.GaMBA.M0111 Establish and training for the customer relations staff at the Individual customer relation Division, transactions division and saving funds for regular customers Organize a group of Individual customer service Found and train for Financial advisors serving for customers at medium and high level Build a group of seller to serve the wealthy and very prosperous customers (Private banker and Wealth management) Risk management of retail banking activities at branches Total budget Page 80 x x x x x x x x x x x x x x x x x x x x x x x x x x x 720 CONCLUSIONS The worldwide problem of political, financial and economic instability has not been solved, which causes many difficulties in business activities Being in an industry that is sensitive to the external environment changes, it is required that BIDV should affirm its vision and effective strategies to sustainably develop its strengths and minimize its weaknesses To achieve the goal of “Be the second – ranked retail bank in Vietnam in 2015”, the whole system of BIDV needs to be united immediately to follow the shared strategic goals in each specific activity Opportunities always accompany threats Increasing competition in retail banking section requires BIDV to take actions timely and rapidly The Capstone project of “Formulating business strategies for retail banking business of Joint Stock Commercial Bank for Investment and Development of Vietnam in the period of 2013-2017” aims at applying the acquired knowledge to the real situation and contribute the development of BIDV Although developing business strategies for a 3-year period is not considered as long-term, due to our shortage of time and experience, we are looking forwards to receiving comments and suggestions to improve this project CapstoneProject_G5.GaMBA.M0111 Page 81 REFERENCES Fred R.David (2011), Strategic Management Concepts and Cases, The Fourteenth Edition Michael E.Porter (2010), Competitive Strategy, Youth Publishing House, Vietnam Philip Kotler (2011), Marketing3.0, Synthesis publishers TP HCM, Vietnam Annual Reports of the BIDV in 2008; 2009; 2010; 2011 Website: http://www.gso.gov.vn Website: http://www.sbv.gov.vn Website: http://www.bidv.com.vn Website of the banks CapstoneProject_G5.GaMBA.M0111 Page 82 ... the theme: ? ?Formulating strategies for retail banking business of Joint Stock Commercial Bank for Investment and Development of Vietnam during the period 2013 - 2017? ?? with the desire to apply... for further development of the bank'' s retail banking activities Subject and scope of the research: - Subject: Retail Activities at the Bank for Investment and Development of Vietnam - Scope of. .. for the development of retail banking of BIDV in the period of 2013 - 2017 62 3.2.1 Summarization of the strategies from SWOT analysis 62 3.2.2 Selecting business strategies for