TABLE OF CONTENTS
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Trang 3(ng CATT TE BOTY i eueudgadrdurrttdesnnddtoottiatfseskgsegroiStdiixonnginsoseiisi 22 ` MA 1 ad KG ES Uh ngnnungngtftiiussgngoEE-GG55-n9000NGBIG11880n009-40908900008bmsorggig9i9i0810nesssrsgigvz98cex vi ATNALYSIS OF BUSINESS ENVIRONMENT OF COMMERCIAL JOINT STOCK BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM - QUANG
A Tu aneeservreeresnsasrnrgrninoossgpntisgetroteenSgypSr9f9iSnsrnaytngl40 sen 23
2.1 General introduction about the EnterpriSe c5 5-5 cv czxez 23 Dekel - PÍƯẾPHTDÍẾ traseogssntdiottotlbimsevveeegtoslgltibcseoeooBohsieVgf6rroigrgeetiHiddlAðftfisremiesongekdtGiiáe 23 2.1.2 Function, mission and business operation of BIDV Quang Binh 24 Cole LƯU ÏtaesdsehgrtseesribnsnteeotigSiboertsotgtgg0(0914980isnrnsnggepegis38BSbsemneegrtklestW40616 2 pH ý TỆ AM xe=ssentsotrtotgiitbemmgeregeg6flesnnmnroretGDSSS3W6rarrsogtet0S/040089/Sinasmovggfige4tei0960llm 25 si (OP VHRỀNẾ muaastansesereenetdiettbbwenpsatnaaddiidlbsrnssxsyti0ygiGii00BlusmspossgttelsdlU808Asex 25 2.1.6 Major products and service of BIDV Quang Bìnilh 5< <<< <5 25 2.1.7 Organizafional síructure 0ƒ BIDV Quảng Bìnl! 55 25s <<<<<+2 26 2.2 Analysis of business environment factors affecting operation of BIDV
£20008 DG ooncccndincememn ie mene eer ER ERIN 21 2.2.1 MAICrO€COHOTHIC €HVỈTOHHI€HÍ HÏJSES QQQQQQ Già, oi “ác HIICPG-»ENVIFDHIN€HÍ HHNHÍWẨ N.«eeqenndsddstiieesdneddioiiildessasgsgdinosostosilldssssyvs 37 2.2.3 Analysis 0ƒ'interHal ƒactors 0ƒ BIDV Quảng Bình - 555 s<+ 47 2.3 Necessity to be establishing business strategy of BIDV Quang Binh 63 CẢ TT eaarrtreeeeesnrrgttttstteouagrniongstGi546240000954600000306xscuigi9velpzseins498-400xsessigee 64 BUSINESS STRATEGY OF BIDV QUANG BINH IN PERIOD OF 2013-2017 64 G.i lGIGEL[TIDW ĐỂ BEFHIEEV HĨNH taussesddetitdedersatoontrtiti050lssxng0i0NGGS09538860 008008014 64 du /INHWSEY GŨOH UT HH sueesegaateeeeesvndantdiiiaGilsssedeetiigAd016802xenkoesidgee 64 đu di NI flưsesonneoeasibe=srddredtrstioidtomsnnrnttoEos3titlleesrsngsoNgolSSSNGđG-esssgorsiSoiSx 66 31.3 ;SEIEGIIGH 0ƒ D PM HHHIX NHHỈŒEỸ seresdieoaiaaaeenrnoaaoainadliseseoseeneaodoe 67 3.2 Content of business strategy of BIDV Quang Binh from 2013 through 2017
70
Sided Geer DHGIHGSS HỮHSIlilaiioesdddedandagibonsseeugtngtditiotbessotagheiiegpiess3dcssee 70 3.2.2 Contents of business strategy of BIDV Quang Binh from 2013- 2017 70 3.3 Solutions for performing the strategy of BIDV Quảng Bình 71
Trang 43.3.1.3 Package banking product and service development solution group 73 5.3.1.4 Expansion of distribution chư nHểÏ HETMUOFE(svaecoeesedvodsadsilessessodsseke 74 SS Ƒ EPROHHELSY( NINH BFỐHlueeasddtgdteeventddgkkiahliesuervrostGGROSGasreoygeeeintil 74 3.4 PF0ÐESSBESÍYHGBV HEGT[DTFIRGHG gaaagggáeededdbbididieeddedreoliil6ixesvorcetaeueotk i 3.4.2 Pan for strdfegic solHfiOH ÌHIDÏ€HI€HfQfÏOH Ă 5 55c <+S<ccsssccs+ 76 3.5 Risks during strategy DerÍormanC© + + c1 2x12 312v vn rệt 79 Si PROPOSAL xu eeseddddddodise=ssee re CUE eR ESI Able RN 80 đu lD TIỆY NEGDUNÍtseduexeenesrnardaiaibeeseermodtrrinssygeresgnrpltdl804xmomaynrsngtiistitoiRl 80 3.6.1.1 Construction of technological infrastructure, fundamental factors for
MEPINVMEN Of DARK PPOUUCT ANG BSOPVICE senccnxusanscssitisanunenenniencins voowssanennnenrentiesasiionen 80
3.6.1.2 Application of technology 10 Fisk MANAQEMENE sccsscessasisacenesercrvsrsssasirsnnners 81 3.6.1.3 Establishment of security policy of information technology system 82 3.6.1.4 Establishment of customer-oriented product and service development strategy 82
3.6.15 Modernization of professional procedure cccccccavsscssiairenmvenmanviacavsivernens 83
3.6.1.6 Improvement of technological risk administration rỌe -‹ + 83
3.6.1.7 Establishment of reasonable salary DO Wsveiuuaasessesesdsadabiaslaaavseessaen 83
Trang 5TABLE OF PICTURE
PiclUre | lt Strategy administration model Of FDAVId sen sieerenanisiasiessssssppis 13 F1ðHWfE 1, ý: ENIETiiBI Si iyoiiiiBfEeeeseessseaaskebenseiiuorGSIGSE286điemusroeosrVSAGIGISSEEGnrsmsseg 14 PMïiWWG L ốc RE Epf066i88061.01.NT, FGITÊT ereasesaseensbodrosoalldlossteseovrggrgfcgf858xuses 15 Picture 1 4: Steps for constructing EFE, IFE matrix and competitive image 18 Pieters L352 5 v1 HN se esusendrdiuebtesoresgnetioiEti828E10lnosnnevobovnnpEi9903301500 0049500900.800430 18 Pye burt 1.15 15: TT EYÊN thansuessrernsupagsiottetfBbsawsrntoognslSfgBB04889aensmmysiftEDpV6668i8á nnamagSnoiek 19 Pictive 2 [1 Headquarter Of BIDV Llning KH HH ««eeeeessaesaaeossosssndttodsseosl06Bldssvorssues Zo Picture 2 2: Organizational structure chart of BIDV Quảng Bình 26 Picture 3.15 IE mattis Of BIDV Quaid Bill csesssssssvsssrcmennnrenanarraiiinemcnmnasysnausss 66
LIST OF TABLES
Table 1 1: Competitive Image matrix establishment model - +ss++-s<++ 17 28PBIE }„.ár.Lội [ THTIX €SIXB]ISHINETÍ TIDLeeenadensdaidsenssnraroontogigait40048msmansrorsse bế Table 1, Si IFE Matra establishiiient M0) seeveesaesaetisabeesreinostterotb3308esnssmesety Li
‘Table 1.4: QSPM iiaivis 6siNblishinlefnf HiOdET seeeeeeeenadididieessroidteiaoagiiuoiagisen 20 Table 2 1: Number of credit organization in Quang Binh province in 2011 38 Table 2 2: Market share of BIDV Quang Binh in comparison with its competitors 40 Table 2 3: COmpetiive Tmf8BE HiHUếXSuaaaeadaiieeveeonrsdituiaGi006icsxvsatuektGHSG004060/2Amex 4] Table 2 4: Number of customers of BIDV Quang Binh in 2007 through 2011 43
1LãBD|£ ø.3:.EPE 1aiilX ðỀ BH V Quảng Hoa eecseennndsdtiiecosdlaxsssoregperosagnngagil 46
Table 2 6: Operational results in 2007-2011 and sive early months of 2012 a Table 2 7: Capital mobilization and share of BIDV Quang Binh from 2007 until 30
PUES BATU niaaeessserogrostraiipttihiilissonsonoit0igs0rs9G0R0G01301886ãusnnpigGr9i038000309/100Bn000-090306 32
Table 2 8: Debt balance, credit structure of BIDV Quang Binh in period of 2007 — 2011,
UPUAUUG OM ICATLY SIKE TONING Of ZUL 2 cneccenemacocncmveniemmenaemnncinaasnaniinciinnn 54
Trang 6LIST OF CHARTS
Chart 2 1: Economic growth rate of Quang Binh in 2006 — 2011 (%)Error! Bookmark
not defined
Chart 2.2: Economic structure of Quảng Bình in 2011, and by 2015 29 Chart 2 3: Growth and structure of Quang Binh population in period of 2006 -2011 and
FOF PETOd OF 20S BH 2020 srccsessascnernzircennnmnconenneeannas ware Ty w JN-Đ0)4/6688 32
Chart 2.4: Market share shifting in Quảng Bình bank syStem «+- j9
Chart 2 5: Growth and structure of human resources qualifications of BIDV Quang 0 sa sensnrnannrttbesfo0B0481:nrsnysngfveB9Sf680090/09083knnmsnnigtrSrg800G0/0100910iemsrmsng 48 LIST OF ABBRIVATIONS Abbreviations Interpretation CB Commercial bank SB State bank
Vietcombank Joint stock commercial bank for Foreign trade of Vietnam — Quang
Quang Binh Binh branch
Vietinbank Vietnam joint stock commercial bank for Industry and Trade - Quang Quang Binh Sacombank Quang Binh VPBank Quang Binh ACB Quang Binh Binh branch Sai Gon Thuong Tin Commercial Joint Stock Bank — Quang Binh branch
Vietnam Prosperity Bank — Quang Binh branch
Trang 7AgriBank Quảng Bình BIDV Quảng Bình BIDV S&ME CJS Bac A Bank Quang Binh MaritimeBank Quang Binh PC IT I-M S&T Vietnam bank for Agriculture and Rural development — Quang Binh branch
Vietnam bank for Investment and Development - Quang Binh branch
Vietnam joint stock bank for Investment and Development Small and medium scaled enterprise
Commercial Joint Stock
Bac A Commercial Joint Stock Bank —Quang Binh branch
Trang 8PREFACE 0019258190399 1 Necessity of the study subject
In early years of the twenty first age, Vietnam economy has remarkably changed into market economy and globally integrated, especially Vietnam becomes a full member of WTO Therefore, to exist and develop, Vietnamese enterprises must well prepare for business and production operations in the future
Priorly, that is short-term plans for the coming targets and further the strategies must be established for long-term targets For the industry with high competitiveness and large initial investment, the establishment of development strategy is very important and especially meaningful for the enterprise’s operations
Bank industry is a special business section, has a paramount importance during
development of country economy but is also sensitive for variances of domestic and
international social-political-economic environment That is why operation of the commercial banks are always taken into account and strictly inspected Besides, competitive pressure inside the industry is more and more severe, together with that integration process of country economy has been widely and deeply happening Hence, each bank must establish its own strategy to stably operate and develop on the basis of Opportunity maximization and risk minimization of integration process
Global competition and integration require commercial banks to ever renovate and develop all aspects such as capital, technology, organizational structure, management ability and operation quality of risk control system as well as to continuously increase its prestige and brand and have orientations to meet with increasing requirements and to attempt to become a modern bank having key and decisive role in monetary finance market, having high position in region, competitive strength and prompt adaption during integration and development
In such a circumstance, to success banks must well organize the establishment and administration of strategy Business strategy shows the competitive way and method that
bank enterprises must apply Strategy administration is a way to direct the bank to a right
route and adjust this in association with change of input factors
Trang 9BIDV Quang Binh in particular Provide realistic situation, study group selected the Subject “Establishment of BIDV Quang Binh business strategy in period from 2013 through 2017” with aim to contributively improve business efficiency and bring BIDV Quang Binh to a new position in BIDV system in particular and in CB system of Vietnam
in general
2 Objective of the subject
Based on theoretical methods of the study, the group thoroughly analyzes and generalizes fundamental theory of business strategy as well as analyzes business environment of BIDV Quang Binh, and then establishes business sirategy for BIDV Quang Binh in period of 2013-2017 and proposes some solutions to execute it in order to make BIDV Quang Binh become one of the leading branch of BIDV system and in Quang Binh province
3 Mission of the study
To generalize theories of strategy model; analyze business environment, internal and external environment impacting strategy establishment and propose business strategy for BIDV Quang Binh in period of 2013 — 2017 and solution for performance
4, Object and scope of the study
Object of the study refers to theoretical matters on strategy administration,
operation of BIDV Quang Binh and some banks in Quang Binh province affecting Operation environment of BIDV Quang Binh
Scope of the study is restricted to the bank industry and business strategy establishment for BIDV Quang Binh in period of 2013-2017 Simultaneously, analysis data is mainly of BIDV Quang Binh and some other banks in the same province together
with analysis and statistics date of the State bank in period of 2006-2011
5 Method of the study
- Approach methods: using combined approach methods such as individual
approach, historical approach, and quantitative and qualitative approach
- Data processing and analysis method: using description statistics, analysis and summary when evaluating operational results of BIDV Quang Binh; employing analysis matrixes including EFE, IFE, SWOT, IE, QSPM
Trang 106 Theoretical meaning and realistics
The subject depends on_ theories’ relevant to strategy administration and employs it to analyze strengths-weakness, opportunities-threats of BIDV Quang Binh, business strategy is established thereof and solutions are proposed to execute this strategy
Te Structure of the study: Including three chapters
Chapter 1: Theoretical backgrounds on business strategy of the enterprise
Chapter 2: Analysis of business environment of BIDV Quang Binh during 2007 — 2011 and updating until 30 June 2012
Chapter 3: Business strategy of BIDV Quang Binh in period of 2013 — 2017 and
Trang 11CHAPTER I
THEORETICAL BACKGROUND ON STRATEGY ESTABLISHMENT FOR ENTERPRISE
1.1 Concept of business strategy
The strategy is an overall action program to obtain a specific mission It is comnon knowledge that strategy of a certain organization refers to that organization mus determine what mission it wants to reach, how to execute it and what resource must
be rdiably provided
Until now there are many different concepts of business strategy according to varius approaches
Alfred Chandker stated “Strategy comprises determination of long-term fundimental missions for the industry, simultaneously select method of action process and dstribute essential resources to execute those missions”
According to WiliamJ.Gluech: “Strategy is a plan of unitedness,
compehensiveness and coordinateness designed to ensure fundamental mission of the enteryrise performed”
In “Concept on strategy administration”, Ferd RDavid stated: Strategy is means to reachlong-term missions Business strategy may include geographic development, activity diversfication, ownership, product development, market penetration, expense reduction,
liquidition and joint venture
Strategy is also thought to be a collection of missions and policies as well as major plans o obtain those missions; it shows what section the enterprise are operating or will
operat and which section it will belong to
In addition, business or competition strategy is defined according six following
factor:
- Product market: Opportunity of the enterprise depends on its products, marke that it serves, competitors that it faces or avoids and its integration level
Trang 12- Functional strategy: Competitive manner can concentrate on one or more functions including product strategy, price strategy, distribution, production, informatics technology, segmentation, and global strategy
- Strategic assets and ability: strategic ability indicates outstanding aspects of the enterprise Strategic assets are resources strength of the enterprise in comparison with that of other competitors When releasing a strategy it is necessary to pay attention to charge as well as possibility to create/ maintain asset and ability to serve as a ground for long-term competitive advantage of the enterprise
- Resources distribution: financial resources and non-financial ones such as
plant, equipment, and human are all distributed Decision on distribution is a key factor for strategy
- Impact contracting between enterprises: only enterprises that obtain
contacting impacts have outstanding advantage compared to ones that disregard or do not
employ this contracting effect
- Generally, strategy is a collection of actions and decision that are closely associated in order to help an organization to achieve the targets And it must be established so as to make use of fundamental strengths including resources and ability of an organization as well as regarding opportunities and challenges of environment
- Business strategy is considered as a principle and guideline in business Therefore, the prerequisite condition is about to have a business strategy or organize a good implementation of strategy to reach succeed in business
1.2 Role of business strategy
In the market mechanism, business establishment and performance has an
importance for survival and development of the enterprise Role of business strategy for the enterprise is manifested on the following aspects:
- Planning role: Business strategy helps the enterprise to know its mission and direction in the future and serves as guidance for all operations of the enterprise It shows administers to consider and determinate which direction his organization should follow and when it can obtain the expected results
- Forecasting role: in an ever-changing environment, opportunities as well as threats always appear Strategy planning enables the administrator to analyze the
Trang 13environment and have forecasting to make reasonable strategies Therefore, he is able to better take advantage of all opportunities and reduce threats relevant to the environment
- Directing role: Business strategy helps the director optimally use and distribute resources as well as effectively combine functions in the organization in order to achieve missions
1.3 Classification of business strategy
1.3.1, 1.3.1 Classification of business strategy based on the strategy level Based on the strategy levei, the strategy is classified into the following:
- Corporation-level strategy (Overall strategy) is the one established for the
whole company in all sections that it involves in Mission in this strategy indicates that
the goal to be achieved is overall considered on all operations that the company pursues as Well as shows direction and measures to reach that goal
- Business-level strategy (Section) is established for the specialized line In case the company takes part in only one section, the strategy is also a corporation-level
one
- Function-level strategy refers to that of each individual function in the
company such as finance, marketing, personnel, etc Function-level strategies can be
considered as supporting one for successfully execute the corporation-level and business- level one
1.3.2 1.3.2 Classification of business strategy based on the strategy content Depending on contents of the strategies, French managers classify the business strategy into the following:
- Commercial strategy;
- Financial strategy;
- Human strategy;
- Technique and technology strategy
1.3.3 Classification of business strategy based on the strategy process Based in this way, the strategy includes
- Orienting strategy mentions significant orientations on mission of the
Trang 14strategy plan of the enterprise It is established from results of environment analysis and internal enterprise analysis
- Action strategy indicates action plans of the enterprise in a specific situation and estimation of strategy adjustment It can be selected from strategies that have been made up when the orienting strategy and also from those emerged during implementation of orienting strategy
1.4 Process of business strategy establishment
pinnsupei ems REIT es mcemarmeiea ieee 0U sitesi ———- ẽ rel annual 1 tiÁi Measurement and ` evaluation of Re@sourc6s ˆ petformance Pees bac Pohlaes of departments
Picture 1 1: Strategy administration model of F.David
1.4.1 Mission and target of the Enterprise
Mission is a statement of long-term nature on purpose It distinguishes this enterprise with others Such statements can be considered as an enterprise’s one on
business philosophy, principles and reliance All determines operational field of the enterprise namely product category, basic service, fundamental customer group, market demand, technical sectors or their combination It overall contains expected achievement externally announced to be a public image that the enterprise wants to set up
Mission of the company needs to be employed and drafted as specific targets
Trang 15Targets refer to statuses and specific results that the organization achieves in a certain period
1.4.2 Analysis of environment outside the enterprise 1.4.2.1 | Macro-environment
Analysis of macro environment is to answer the questions: what is the enterprise facing up? Four principal factors of macro-environment that the enterprise must face up
are:
ˆ Lawful and political factors have been ns
acial forces
increasingly affecting operation of the enterprise The v enterprise shall comply with regulations on
legislation, policies, rules, preferential regimes, and “yet procedures, etc
- Economic factors have direct influence on potential attraction of strategies These are
economic growth, inflation rate, economic cycle,
variation of interest rate, share price, trend on value BNE Noe Senne of United States dollar, tariff system and tariff level, etc
- Social and cultural factors mainly affect aspects including concept of living standard, morality standard, business community and female labor force, change in consumption habit, etc Social factors that slowly vary are difficult for realization but have s:gnificant effect on most of decisions on products service, market and consumers
ˆ Technical and technological factors have enormous effect on the enterprise;
existence of many advanced technologies brings about both opportunities and threats for all industries and enterprises Development of new technologies can create new market, resultirg in appearance of new products and then change of competitive relationship in the industry and making the existing products lag behind
The aforementioned factors impact the organization independently or in
combination with other factor In addition, there are natural condition and international factors These are external factors of the enterprise and industry whose effect serves as objective factor
Trang 16Apart from factors of macro-environment, the enterprise is also affected by industry environment where it operates, which is shown in model of M Porter
Five principal factors of industry environment have different impacts on the enterprise: BARGAINING POWER OF CUSTOMERS THREAT OF SUBSTITUTES
Picture 1, 3: Five forces model of M Porter
for production industry;
+
+ +
- Pressure from _— suppliers: suppliers are able to be a threat pressure for production sector when they increase selling prices, limit quantity and unfit quality The enterprise needs to pay attention to negative impacts from suppliers However, supplier can create pressure against enterprises only when:
+ There are a few of suppliers
There are a few of substitute products or service
There is an advantage of specialized products and services It is able to agreeably integrate and close products
Pressure from customers: customer is a common noun indicating people or organizations using products or services of the enterprise It is possible to divide customers into five objects including end-consumers, agent distribution, and agents, wholesale and industrial buyers Customers are main objects participating in consumption of product, identification of customer objects and impacting on customers in order to
determinate product and service market and necessary investment structure Customer
demand is the most fundamental factor concerned by production and business operators to determine whether it is necessary to maintain long-term competitive advantage for that product or not The higher the pressure-from-customer possibility of customers is the larger the disadvantageous threat for the enterprise is Customers normally cause pressure on the enterprise in the following cases:
+ +
+
They purchase an enormous quantity
Many suppliers provide one same product, there are many choice
It is able to counter-integrate to own the whole or one part of production
Trang 17When customers have more advantage than sellers, they must reduce the price and increase product and service quality, i.e the profit is reduced
- Substitute products are not severely competitive but able to affect market profitability, which is a threat for the enterprise It is necessary to pay special attention to substitute products that can be easily improved or changed with technological advance Mostly, only substitute products are resulting from technological bloom To obtain success in Operations, enterprises must spend necessary resources to develop new technologies to development strategy
- Competitors: competitive degree of the existing competitors is shown in concentration level of the industry, withdrawal difficulty, fixed expense, reinforcement of the industry, capacity in excess, differentiation of products, conversion charges, characteristics of brand, diversification of competitors, selecting status in the industry
- Potential competitors: according to Michael Porter, potential competitors
refer to enterprises that have not existed in the industry but can have influence on the
industry in the future Threats from potential competitors are manifested in factors including absolute expense advantage, policy of Government, scale economics, capital requirements, characteristics of brand, and conversion charges of the industry, ability to approach distribution channel, possibility to be retaliated, and exclusive products
1.4.3 Analysis of environment inside the enterprise (internal environment)
Internal environment of the enterprise refers to what belongs to its own, directly associated with its operation, enabling realization of its strengths and weaknesses as
ground for business planning and implementation Objects that are considered are main factors happening inside the enterprise and within its control Those factors include human resources, financial ability, marketing, informatics system and organization
1.4.4 Models of strategic analysis 1.4.4.1 Competitive image matrix
The analysis of external environment requires establishment of competitive image matrix to form the strategy The establishment of competitive image matrix aims to
identify main competitors together with advantages and special weaknesses and
Trang 18Table 1 1: Competitive image matrix establishment model Sample : Competitor 1 Competitor 2 Competitor n Import | enterprise Evaluatio
ance | Import Class | Impor
n factors Classifi Classifi | Importa | Classifi | Importa
level l2 ance | : ' | ificat | ance | cation : cation | nce point} cation | nce point
ree [oe point ion | point 1 2+ U03 4=3x2 5 6=5x2 7 8=7x2 9 | 10=9x: Listing out factors Total 1 x at | X X x
1.4.4.2 External environment factor evaluation matrix (EFE)
EFE matrix allows the strategy administers to summarize and evaluate social, cultural and economic information, population, geography, politics, law, technologies and competition, etc Therefore, they can identify external opportunities and threats
affecting their companies
Table 1 2: EFE matrix establishment model Important Important No Mainly external factors Classification level point 1 2 3 4 5=4*3 Listing out factors of — external environment Gi GD Ge ee Geran orice ai teh HữtcsY
1.44.3 Internal environment factor evaluation matrix (IF E)
IFE matrix allows the strategy administrators to summarize and evaluate imporiant strengths and weaknesses of functional departments; simultaneously it serves
as a besis :o determine and evaluation relationship between these departments
Trang 191 isting out factors of internal environment — X X X RE Total 1.0 x 1.4.4.4 Steps for establishing an EFE, IFE matrix and competitive images setiiug up principal factors (including opportunities, threats, ee and Poe men “sĩng S900 ter ok factor Tetal Nr el score of all ere must be equal to 1.0 Classifying from-1 te 4 for each factor, its weight Jepeads on response level of
cach cornpany , in which 4 Ís best, 3 1s fair, 2 ls average and 1 ¡s weak Muttiplyíng Importace of cach factor with (ts welpht ín order fo defermine score of facters Picture 1, 4: Steps for constructing EFE, IFE matrix and competitive image 1.4.4.5 SWOT matrix This is an analysis model based on strengths, weaknesses, opportunities and threats that are combined to deterrrine the business strategy SWOT matrix for the company - S-O combination WO STRATEGIES ] Overcoming neakmrme by | : — helps tie enterprise to make use 3 ` CC 1, 1Àstiag øụt opport0oÐle9)
of its strengths to grasp the
opportunity ST STRATEGIES WT STRATEGIES
Taking the best of aternal Reducing effect of threats from strengths from citermal busiaens aed S-T combination: 4 Lasting owt threats } opens the enterprise uses strengths to overcone threats
W-O combination: Picture 1 §: SWOT matrix
the enterprise should take advantage of opportunity to overcome weaknesses
W-T combination: the enterprise shall surmount or minimize weaknesses
to avoic threats
14.4.6 JE matrix
Trang 20IE (Internal — External Matrix) indicates different capacities of an enterprise in a table of nine cells It depends on
¬ IFE SCORES
two principal aspects:
STRONG AVERAGE | WEAK
i Fotal Important points (3,00 - 4,00) (2,00 - 2,99) (1,00 _ 1,99)
of IFE matrix are shown on X axis
STRONG
8 : II
- Total important points (3,00 - 4,00) of EFE matrix are shown on Y axis wR he x - The enterprise must | § |**ERAGE on ‘ ; _ cĩ %“ 1 (2,00 - 2,99) establish IFE and EFE matrix = ke serving as a basis to establish its IE WEAK VII matrix (1,00 - 1,99) + X axis indicates total Picture 1 6: IE matrix
importance scores of IFE matrix, in
which total scores from 1,0 through 1,99 means internal weakness, total scores from 2,0
through 2,99 is at average, and from 3,0 — 4,0 refers to pow erful strength
+ Y axis shows total importance scores of EFE matrix, in which total scores from 1,0 — 1,99 is low, from 2,0 — 2,99 is average and from 3,0 — 4,0 is strong
- If the enterprise is in cells no I, II, IV: recommended to develop and construct - If the enterprise is in cells no I], V, VII : recommended to hold and maintain - If the enterprise is in cells no VI, VIII, IX : recommended to gain or reject 1447 QSPM matrix
QSPM matrix can be employed to select and determine a business strategy; this matrix use date collected from the input stage in order to evaluate feasibility of strategies mentioned in the combination stage Necessary steps for forming QSPM matrix are
- Listing external opportunities/ threats and internal strengths/ weaknesses of the enterprise; evaluating importance of each factor listed upon a certain score (from | to 4), in other words determining the importance evaluation weight of each factor for the enterprise
Trang 21- Selecting the outstanding strategies mentioned in the combination state; evaluating each strategy based on opportunities/threats/strengths/weaknesses listed upon score from | to 4
- Calculating all scores of each strategy by summing products between
importance evaluation score of each factor and evaluation score of each strategy
Comparison, evaluation and selection of the strategy depend on total scores of each strategy, the strategy of highest score are given priority
Table 1 4: QSPM matrix establishment matrix
Import Strategies
No Major factors ance Strategy1 Strategy 2 Strategy n
level AS | TAS AS | TAS | AS | TAS
res incall ee EEE om | rene u TSS SOS
1 Listing internal factors _ ~t tuy tuuyu ¡ 7
Il External factors! 9 9) pee st 4#
1 Listingexternal factors —_ | |
2 ¬ |
~ Of which: AS is attraction score; TAS is total attraction score
1.5 Primary competition strategy
Michael Porter said that advantages of any enterprise always lie in two aspects: cost advantage and product differentiation By applying these advantages, companies will pursue three common strategies: costing leading, product differentiation and centralization
1.5.1 Cost leading strategy
This strategy is oriented to the aim that the manufacturer has low cost among the industry with a certain quality standard
Trang 22Enterprises that succeed in employment of the cost leading strategy have the follcwing characteristics:
- Being able to successfully access the capital to invest production equipments It is a tarrier that many companies can not overcome;
- Being capable of designing products to increase production efficiency, for exanple, creating any certain detail to shorten erection progress.;
- Having high qualification in production; - Having effective distribution channel
Any strategy including cost leading has latent risks With backing of modern
techmlogies, competitors can have sudden turnings in production and remove competitive
advartages of cost leading enterprises In addition, some companies pursue the strategy of
narrov market concentration, which is not difficult to achieve lower cost level in their
traditpnal communications, thence form a group controlling multiple-larger market share 1.5.2 Product differentiation strategy
This strategy aims to develop products or services having original and unique charaderistics and evaluated higher than those of competitors Added value based on
produtt uniqueness allows the enterprise to set up a higher price that is still accepted by custoners They hope that such a higher price shall not only allow to cover incremental
costs curing supply of products, but also depend on different characteristics of products, if the «upplier increases the price, the enterprise can transfer that variance to customers becaus: their customers can not easily find out the substitute
interprises that succeed in employment of the product differentiation strategies have tle following characteristics:
Having ability to study and approach the leading scientific achievements; Product research and development group (R&D) have high creativeness and skills - Dynamic sales group has ability to impart strengths of products to customers
successully;
-Having reputation for quality and innovativeness
lisks attached to product differentiation strategy are the likely imitation of competiors or change in consumers’ taste Besides, many companies pursue concentation strategy to be able to achieve higher product differentiation in their market
21
Trang 231.5.3 Centralization strategy
This strategy focuses on innovation of products or there is no change in other factors in market The company attempts to exploit all opportunities about the existing products, service and market
1.6 Selection of the strategy
In order to select the strategy for the enterprise, we must determine selecting criteria
ensuring requirements: dependence on analysis results, evaluation of internal and external
(IE matrix) factors and SWOT mairix, the strategy that is selected must be reliably conformable with environment condition, with policy of foreign affairs, management concept of Executive board and directorate, with financial capacity, material and human resources of the Enterprise
If strategic position of the enterprise lies in three blue cells of quick growth, the enterprise is recommended to select SO strategy in SWOT matrix If the strategic position lies in 3 yellow cells of selective growth or stable strategy, the enterprise should select only
ST and WO strategy in SWOT matrix chart If its position is in three red cells, it is
Trang 24CHAPTER H
ANALYSIS OF BUSINESS ENVIRONMENT OF COMMERCIAL JOINT STOCK BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM - QUANG BINH BRANCH 2.1 General introduction about the Enterprise 2.1.1 Overview Enterprise name Transaction name Abbreviated name Logo Slogan Headquarter
COMMERCIAL JOINT STOCK BANK FOR INVESTMENT AND DEVELOPMENT OF
VIETNAM - QUANG BINH BRANCH
Joint Stock Commercial Bank for Investment and
Development of Vietnam — Quang Binh Branch
BIDV Quang Binh
NGAN HANG DAU TU VÀ PHÁT TRIẾN vi NAM
Opportunity sharing and successful cooperation 189 Hữu Nghị - Đồng Hới city - Quảng Bình province
From early days of the North revival after resistance against the French colonialists, in 26th April 1957, government of Vietnam People's Democratic Republic signed decision
no 177/TTg regarding establishment of
Vietnam Construction Bank — forerunner of BIDV — with mission to provide and
manage the State capital for country
construction work
In Quang Binh, with requirement of economic revival and development of the
province, in 26"" April 1975 department of
capital construction allotment under
Trang 25Quảng Bình was established In 20” April 1964 Quang Binh Construction Bank, was established from the capital construction allotment group Right after being established, personnel of Quang Binh Construction Bank had proactively participated in revival and rebuilding of the province and played a role in directly manage investment funds and distribute capital in fundamental construction sector
In 24" June 1981, Quang Binh Construction bank was renamed Quang Binh Investment and Construction Bank directly under Vietnam Investment and Construction Bank, full member of Vietnam bank system Its mission is to maintain capital allotment for investment and lend circulating capital and operational investment funds in the region
In November 1990, Quang Binh Investment and Construction Bank was renamed Quang Binh Investment and Development Bank, and all operations were moved from state subsidy mechanism to borrowing-for-lending mechanism, taking the initiative in seeking capital source and customers, linking self-financing with implementation of customer and region based business policies, seeking the effective projects to invest, moving all operations into multi-functional operation as per nature of a modern commercial bank, attaching credit supply to product and service diversification, strongly
develop guarantee products, international payment, domestic payment, Overseas national
currency exchange together with e-banking services based on modern technology, highest meeting with customer and market demand and turning to deeply and widely integrate the
economy
In April 2012, Bank for Investment and Development of Vietnam finished capitalization
and ofiicially became a commercial joint stock bank according to permit no 84/GP- NH NN of the State bank regarding establishment and operation of Commercial joint stock Eank for Investment and Development of Vietnam, Quang Binh bank for
investment and development was renamed Commercial Joint Stock Bank for Investment
and Development of Vietnam - Quang Binh branch thereof and operates under a joint stock form
2.1.2 Function, mission and business operation of BIDV Quang Binh
Trang 26motilization, Opening payment account for customer, supply means of payment, providing banking services and other operations of a commercial bank such as cash manigement service, safe leasing, enterprise finance consulting, enterprise dealing and integration, investment consulting, providing insurance service and other services based on legal regulation
2.1.3 Mission
To provide the best financial banking service, to be together and share with custimers; to construct a professional — challenging friendly environment creating the deveopment opportunity for all staff; to become a pioneer and leading bank in activities of so:ial sustainability and community development
2.1.4 Vision
To become a multi-ownership bank, operating multi-sector in compliance with
interrational practice and having quality equal to advanced banks in the region
2.1.5 Core value
Orientation towards customers — Innovation and development — Specialization and Creativeness — Social responsibility — Quality and confidence
2.1.6 Major products and service of BIDV Quang Binh
BIDV Quang Binh provides most of a traditional bank’s products and services
Apart rom buy deposits and lending, BIDV Quang Binh offers many modern products and sevices, supports service in clients’ companies or through fax and mail for distant cus:toners Its major products and services can be divided into seven groups, including:
-ayment product and service group: providing domestic and international
pay meit and transfer
1-banking product and service group: Providing management service of capiital,revenue, automatic salary payment, internet banking, BSMS banking, BIDV at
home, ‘ntopup, VNPay, etc
loreign currency and spin-off group: foreign currency trading, currency cross-
exchang and capital dealing, etc
Junds service group: offering collection and payment, cash check and keeping,
etc
Trang 27Credit and guarantee product group: short-term, medium-term and long-term lending, valid paper discount, discount on commercial set, various guarantee, credit card issuing, L/C opening and other forms of payment commitment, etc
Capital mobilization group: receiving deposit account or call deposit in VND or foreign exchange
Cross-selling and commission product group: Insurance products attached to capital mobilization, crediting, lending assignation, agent receiving guarantee property
for other organizations
Trang 282.2 Analysis of business environment factors affecting operation of BIDV Quing Binh
2.2.1 Macroeconomic environment analysis
Analysis P.E.S.T"*: Politics - Economics — Society - Technology
2.2.1.1 Political Factors
The international community considers Vietnam as one of countries having stable secunty and political situation, which is premise for development of economy and trade aid atraction of oversea investment According to EIU, there is hardly danger in political irsecirity in Vietnam People have confidence in policies of the Party and State Political securty, order, social safety and struggle against crimes have been increasingly strengthened
The Sixth Party Congress passed Eco-social development strategy for period
2011-2020 with three important breakthrough sections, completing socialist-oriented
markd economy, creating fairly competitive environment and administration
refornation This breakthrough section is an important premise to boost the restructuring of theeconomy, the conversion of growth model and the stabilization of macro-economy
Implenentation of these strategic orientations shall make contribution to create a fair and stable business environment for domestic and oversea enterprises as well as to speed up
attracton of oversea investment
[he government and State have bank encouragement policies Since implenentation of open-door economic policy, the Government and State have been
contintously improving Bank law system, for example, law on the State bank and on Credit rganizations was issued in 1997 and better amended in 15" June 2004
aw and act construction program of the eighth term national assembly (2011- 2015) vill take 85 law projects and 6 act plans as the main working program of parlianent Some among these law projects has direct or indirect influence on banking Operatimn, such as law on deposit insurance, Stock law (amended), public investment law, Enterprse law (amended) and bankruptcy law
“ogether with the investment incentives of Government, People’s committee of
the pro‘ince issued Decision no 21/2007/QD-UBND regulating investment incentive and assstance policy applied in Quang Binh province This policy has come into effect
Trang 29since 27" September 2007, in which domestic and oversea investors receive highest incentives regulated by Vietnam State and investment incentive and assistance of Quang Binh province In ọu May 2012 provincial people’s committee enforced Decision no 08/2012/QD-UBND on issuing Trade-Industrial development incentives in period of 2011 — 2015 Besides, with reference to other provinces’ experience and based on the provincial background People’s committee of Quang Binh province brought forward preferential contents attracting the investors to Quang Binh
In addition, the province has been positively implemented the administrative reformation program, improved operational quality of one-door section and expanded one consecutive door in order to create best condition for investors In 19" April 2012 Chairman of provincial People’s committee enforced Quang Binh administrative reformation plan in period of 2011-2020, primarily pushing simplicity of administrative procedures, ensuring their simplicity, publicity and evidence, and create the most convenient condition for people, organizations and enterprises on all affairs In addition, Quang Binh province established an investment promotion funds to take initiative in attracting all types of investment Therefore, it creates condition and opportunity for the enterprises and businessmen to update information, approach investment funds and fields
to be invested; it makes contribution to solve difficulties in land clearance; the enterprise
is supported in expenses with investment incentives, the provincial People’s committee is
consulted about investment incentives, investment support polices, tariff reduction, duty rescheduling, compensation assistance; and the enterprises are assisted in preferential
investment borrowing
The aforementioned solutions show that Quang Binh province has been creating attractive investment environment for domestic and oversea investors Until 30" June 2012, in Quang Binh there has been total 259 registered investment projects with a capital of approximate VND99.229 billion, in which 16 projects has been operated with registered funds of VND8.514 billion This is opportunity for BIDV Quang Binh to expand lending and guaranty service for projects
2.2.1.2 Economics Factors
Trang 30situation of global economy, Vietnam has been attracting Foreign direct investment-FDI and disbursement is continuously stable, which makes contribution to stabilize the overall balance of payments However, under impact of financial crisis in 2008-2009 and following world depression, Vietnam export turnover reduced by 10% in 2009, GDP grovth rate decreased from 8,5% (in 2007) to 6,8% and 5,9% in 2010 and 2011
resp2ctively After recording 23% in 2008, domestic inflation reduced to 6,88% (in
200°) and 9,19% (in 2010), nevertheless according to Ernst & Young Vietnam inflation trend in 2012 will be reduced This organization anticipated Vietnam inflation rate is at
11,5%
Apart from national advantages and difficulties, economy of Quang Binh is still consdered as quick development, especially determining direction to early erase poverty and ¢radually establish factors to ensure stable development of economy
Chart 2 1: Economic growth rate of Quang Binh in 2006 — 2011 (%) 14 _— Đảng 12 sash 10 2007 2008 Ì 2009 | 2010 {2011 ” 0! ee merGDP 8,17 { Ị Ị tên A 1164 1142 1021 89 | 86 | Se eS
Source: Report no.157/BC-UBND dated 2"! December 2010 & no 152/BC-UBND
datea24" October 2011 of Quang Binh People’s committee
In period of 2006 -2011, Quang Binh economy had relatively stable development, averae growth rate reached 9,8% In this period, the economic growth rate is the highest
until iow, 1,26% higher than period of 2001-2005 In 2007, Quang Binh economy had
highet growth (11,64%) and reduced to 8,6% in 2011 In six early months of 2012, growti rate of Quang Binh province reached 6,2%
Chart 2 1: Economic structure of Quang Binh in 2011, and by 2015
Trang 31100% ~~ 90% r 7 Ề 80% Ố Fe 60% - 50% : 40% = 30% ~~, 20% 7 10% ~~“ 0% - fee CƠ HN a aces a Pa omen hh S— `
Resowrce: Quảng Bình Website (www.quangbinh.gov.vn)
Shift in economic structure and internal structure of each economic sectors has had
positive changes Density of agriculture, forestry and fishery reduced from 29,5% in 2005
to 21% in 2011, density of industry and construction increased from 32,1% in 2005 up to
38% in 2011 and service density increased from 38,2% up to 41% in 2011; density of animal husbandry is increased in agriculture; agricultural production is gradually attached to market and processing Average GDP per capita has had remarkable growth, in 2005
GDP per capita reached VND 5,4 million and up to VND17,85 million in 2011
corresponding to USD 854 and narrow the gap with national GDP per capita (GDP per
capita of the province from 53,6% in 2005 up to 56% in 2006 and 65-66% in 2011 compared to that of the whole country
In 23rd June 2011, Prime minister enforced Decision no 952/QD-TTg approving the
overall planning of eco-social development of Quang Binh province by 2020, in which it strives on getting out of poverty by 2015 and primarily become a developing province in
region by 2012 It includes the following content
Average GDP growth in period of 2011 — 2020 will reach up to 12 - 13%, in which it will
reach to 12% in period of 2011-2015 and to 13% in period of 2016 — 2020 By 2015 average GDP per capita will reach VND 28 — 30 billion (about USD1.400 — 1.600) and
by 2020 get VND 70 — 72 million (about USD3.500 — 3.700);
Density of industry — service and agriculture in the economic structure by 2015 gets 43%, 40.5% and 16.5% respectively; until 2020 corresponding economic structures are 44 -
45,0%, 41,0% and 14 - 15%; by 2012 export turnover is striven for getting about
Trang 32Receipt of budget in the region averagely increased by 17% in period of 2011 ~ 2015 and reaches by 18 - 18,5% in period 2016-2020
- Encouraging economic sectors to develop trade and service especially potential and advantageous fields such as sea transportation, post and telecommunication, science and technology, finance, banking, insurance and export and import activities
- Striving on achieving average growth rate of service industry at 12,5 - 13% in period of 2011 - 2020, of which it reaches 12 - 12,5% in period of 2011 — 2015 and up to
13 - 13,5% in period of 2016 - 2020
- Concentrating to exploit the potentiality and strengths of Phong Nha — Ké Bang world heritage; diversifying types of tourism to make the tourism become a key industry By 2015 striving on attracting 1,1 - 1,2 million of tourists including 60.000 —
70.000 oversea tourists; by 2020 there are 1,4 — 1,5 million tourists including 90 — 100
thousand oversea tourists
With the above-mentioned criteria in period of 2011-2020, GDP growth rate of Quang Binh will reach at high level compared to that of the whole country, average GDP per capita will be improved The economy is quickly grown; living standard will be increasingly improved to create convenient conditions for BIDV Quang Binh to develop its products and services
According to statistics until 31°' December 2008, in Quang Binh province there were |.609 enterprises, until June 2012 there has been 3.060 enterprises including 30 State enterprises and 2 oversea joint venture ones with total labor of 91.125 people Number of enterprises in Quang Binh is annually incremental From 2006 until June 2012, number of new entrants increases treble compared to 2005, average number of new-established enterprises is 10.886, mainly small and medium-scale ones Apart from strong zrowth of enterprises, Quang Binh focuses on developing projects
‘ncrease in number of enterprises and investment projects results in increase in banking products and services including lending, payment, guaranty, hiring, card service and forzign currency exchange and dealing, which helps BIDV Quang Binh to develop its business operations as a result of development of banking service demand from enterprises and financing demand for investment projects
22.13 Socio-cultural environment (Socio-cultural Factors):
Trang 33Socio-cultural environment includes standards and values accepted and respected by one culture or a certain culture Socio-cultural factors enormously affect human lifestyle, demand and hobbies as well as influence business activities in selecting busiaess field, target market, general strategies and decisions on overall missions
Vietnam has a culture of national characters; however, in recent years due to impect of integration progress many oversea cultures have penetrated into Vietnam, especially in big cities middle class and adults have been more affected on lifestyle and thouzhts That impacts their consumption behavior, namely trend towards oversea commodity, interest in brand, product quality and value Vietnam education level has been increasingly improved; Vietnamese consumers require products having not only mate‘ial value but also immaterial one, especially for banking products and services This facto:s need attention when development strategies of the Bank is established
Until end of 2011 Vietnam population has over 87,8 million people with 22
million households including, ranking second and third in ASEAN region Until 2011
68% population is not in rural region From 1999 until now average annual growth of
Vietnim population is at 1,2% Number of Vietnam population opening bank accounts is
still bw, making up 20% With young population, it is said that Vietnam has “gold
populition structure” with rate of working age from 15 — 60 at about 55% - 60% of
populition, which is an advantage in economic development
Chart 2.2: Growth and structure of Quang Binh population in period of 2006 -2011 and for period of 2015 and 2020
Population strocture of Quang Binh B4S,000 In TT 8410.000 5995999995 as 2s 83:5.000 , MA Xơi ME Mơ Xơ MỤ, 8310.000 82:5.000 2006 2007 2008 2009 2010 3011
source: Quang Binh annual statistics book in 2011 and Socio-economic development strategy until 2020
\ccording to the study in 1“ April 1999, Quang Binh has 797.176 people, 834.513 peoyple n 2006 and up to 853.004 people in 2011 Population is irregularly distributed,
Trang 3484,£5% living in rural areas and 15,15% in urban Increase in urban population results fron emigration and urbanization progress Number of people within social working age in the whole province in 2011 is 459.812, making up 53,90% of population, including 55,37% of agricultural labor
It is estimated that by 2015 Quang Binh population will have 879.000 people including 70% of rural population, 906.000 people including 70% rural population by 202C Shift in labor structure orients in increasing density of industrial and service labor from 41% in 2015 up to 49% in 2020, decreasing agricultural labor from 59% in 2015 dow: to 51% in 2020 Unemployment rate will be reduced to 1,3 - 1,4% in 2015 and 1,2% in 2020 compared to working labor by boosting employment through programs, proje:ts, economic models, types of services, by successfully operating placement service, training rural young people to take part in labor market Poor people shall be ensur:d to approach basic social service, the poverty-alleviation movement and project are will implemented
Increase and shift in population structure and labor remarkably affect potential demaid of banking service Quang Binh is a poor province, people have not had habit of using »anking service; what’s more, rural region makes up a large proportion Therefore, when he population structure has increasing change in urban region, demand in banking servic will increases However, most of people live in rural region the approach and introdicing the banking service to them are very difficult and expensive Therefore, this
matterieeds an effective solution
According to McKinsey market research in 2008' on people behavior towards bankin; services, young people (at age of 20-29) have opener attitude towards new
ban.kin; service such as online banking compared to people at higher age Young people in Vietiam in general and in Quang Binh in particular will play an important role in quick évelopment of retail banking market in the coming years If income per capita of Quang 3inh continues increasing to VND 28 — 30 million (about USD1.400 - 1.600) by 2015 ard up to VND70 — 72 million (approximate USD3.500 - 3.700) by 2020 according
to the aorementioned forecasting demand on banking service will gradually increase
' Report qotes: How young consumers could shape Vietnam's banks
Trang 35Consumption customs of Quang Binh people has been gradually moved from spending on essential demand to perfecting and improving both material condition as well as living condition Confidence in bakning system has been constantly improved
In recent years, the economy of Vietnam as well as that of Quang Binh has high crowth rate, resulting in people’s increasing income Therefore, they invest their income {> get profit or take borrowings to spend in advance Therefore, demand on banking froducts and service has been remarkably developing
The culture that Quang Binh people like transacting with domestic bank serves as an advantage for Vietnam commercial banks This is a “gold” opportunity for domestic bank to exploit while they have lower competitive capacity than oversea ones Therefore, in a strategic manager’s opinion, this psychological factor should be thoroughly exploited by commercial banks in the current period to attract customers’ interest and simultaneously they must improve product and service quality in order to keep
customers
However, banking service is unknown to most of rural people It is difficult to make them use banking product instead of cash This factor restricts development of banking products for all banks including BIDV Quang Binh
2.2.1.4 Technological environment (Technological Factors)
Recently, strong development of informatics technology and other high technclogical industries has been profoundly changing domestic economic, political and social living Informatics technology especially Internet makes Vietnam closer to the
world, strengthen understanding and cooperation with other countries over the world
This irdustry has annual growth rate of 20% with revenue of about USD 7 billion making
up 7% of Vietnam GDP, in which hardware industry accounts for above 75% and
remairing 1s software and digital contents
Together with development of national informatics technology, Quang Binh
province established a science and technology development strategy by 2020 with aim to
constrict, develop and improve scientific and technological ability to advanced level in Southeist region, to make S&T become a foundation and motivation for socio-economic
Trang 36region and ensure stable living standard In past years, Quang Binh technological infrastructure had been remarkably improved Nearly 100% organizations connect Internet and most of them establish local network Use of telephone, Internet and mobile phone has increased year by year In 2011, number of internet subscribers in Quang Binh is 41.946 and of mobile subscribers is 544.233 Scientific and technological activities especially IT in Quang Binh has been quickly developing IT studies have been more and more employed in life and operations
In period of 2006-2011, banking technology had been developed Most of banks are equipped with corebanking and payment system primarily conformable to
interiational practice and standards E-banking system has been strongly developing
together with development of e-commerce in Vietnam Many banks provide online payirent service such as VNpay, ESpay, e-shopping, etc Credit card system like master, visa, credit, ATM and POS has been remarkably developed with average growth rate of 40%-50% in many continual years;
In Quang Binh, banks are branches directly under headquarters; therefore, IT
environment is also modernized throughout the country BIDV Quang Binh must frequently update advanced IT, do research and development of its products and service meeting the increasing demand of customers and focus on investing technological foundation to develop new distribution channels such as Auto Bank, e-banking (internet
bankiag, phone banking), card payment equipment (POS) in trade centers and stores Development of science and technique and ebanking IT system as well as e-
transaction law valid from Ist March 2006 has enormous impact on BIDV Quang Binh,
enabliig BIDV Quang Binh to employ modern banking services such as internet banking, home banking, etc Thank to IT system, BIDV Quang Binh successfully implemented bankirg modernization, which is one factor creating stable development of BIDV Quang
Bình
In spite of developed banking technology, products and services are not divers fied and restrictive to applications and scales compared to international market In additim, due to cash payment habit e-banking payment is still in potential period, its
obtain<d profit has not been corresponding to initial investment
2.2.1.5 Natural environment
Trang 37Quang Binh is located in the northern Central, bordering Ha Tinh province to the
Norh and Quang Tri to the south, Laos to the West and Eastsea to the East There are
total seven administrative units including one city and six districts Déng Hoi is the center of the province with area of 8.065 km2, located in the North-South arterials on road rail, air and sea It has Hon La port and some Chalo border gates to Laos, which is convenient for commodity circulation within the country or in regional countries Its terran is narrow and sloped from the East to the west Mountainous area makes up 85% of th: whole province The coastal is 116,04 km long, with five river gates, Nhat Lé and Gian ports and Hon La bay There are many beautiful sightseeing along the coast Contnent terrace is 2,6 times wider than inland, which creates a large fishery field
It is potential in development of heavy industry and non-smoke sectors Large volune of sand with high silicon content is suitable for glass industry and lime stone of
1.400 million tons for development of cement factory Metal minerals like ore, lead, zinc have 1 volume of 500.000 tons on area of 59 km2 Gold is widespread in many places Volune of mud coal is 903.000 tons for processing micro-biological fertilizers
Phosphorus has volume of 150.000 tons, etc Sea and mountainous combined tourism is
potental
However, its area is narrow with all forms of terrains including mountains,
highlaid, delta and coastal The climate is severe with two different seasons Rain season starts rom September through March next year Average annual rainfall is 2.000- 2.300 mm Hood regularly occurs and even whirlwind Dry season starts from April through Augus with average annual temperate of 24°C - 25°C; highest temperature is at 39°C - 40°C (nJ uly), lowest at 10°C (in January), which has enormous effect on socio-economy
development as well as banking operation
2.1.6 Consequences from macro-environment analysis
“hrough the aforementioned analysis of macro-environment of Vietnam as well as
Quang 3inh, it is possible to conclude some following primary characteristics affecting the straegy planning of BIDV Quang Binh:
Trang 38environment for all economic sections This is convenient condition for operations of
BIDV Quang Binh;
- The focus of socio-economic development strategy of Quang Binh province in period of 2011 — 2020 is reforming growth model and restructuring the economy This process directly affects BIDV Quang Binh;
- Quang Binh economy in period of 2011-2015 is anticipated to establish a Stable status; inflation, interest rate and exchange rate shall slightly vary, which is convenient for stable development of BIDV Quang Binh;
- Population has 853.004 people, estimated to increase to 906.000 people by 2020; rural people make up 70% of population and 30% is urban In the meanwhile, only 18% of population assesses banking service It indicates that retail banking market in Quang Binh is very potential, and BIDV Quang Binh takes this opportunity to boost development of retail banking service
- Together with technological development, e-commerce has been more popular and particularly attracting segment of young customers with high income in urban region Therefore, BIDV Quang Binh should have production solution and customer policy conformable to social characteristics of population class
2.2.2 Micro-environment analysis
According to five forces model of Michael Porter, competitive degree of banking industry can be considered under five forces: (1) competitive degree among the existing banks in the same system; (2) arrival of new entrants; (3) Empowerment of customers;
(4) empowerment of suppliers; (5) threats from substitute products and services Detail
analysis of these five forces shows overall picture of competitive environment in banking
industry in Quang Binh province
2.2.2.1 Analysis of existing competitors
With the State and Party’s policy of finance and currency market development prescribed in Resolution of the ninth meeting of central committee of the ninth-term party, banking industry has been increasingly expanded to quantity, scale, network as well as technology and capital Severe competition among banks is mainly attached to interest rate, network, products and customer care Advantages of commercial State banking block and
Trang 39existence of oversea banks in Vietnam Besides, banking system is severely competed by financial organization such as financial companies, investment funds, development assistance funds, insurance companies, and post offices, etc
Operation of credit organizations in Quang Binh: in period of 2007-2011, CB system has three new entrants With these shifts, Quang Binh CB system currently has three State CBs, seven joint stock CBs and three other credit organization In 2012 it received two new entrants, Lién Việt Bank and MB Bank With a system of second grade branches, transaction offices, saving funds through the province and skilled staff, banking system has been successfully meeting with demand in capital and banking service for enterprises and local people, contributing economic development of Quang Binh province
Chart 2 1: Number of credit organization in Quang Binh province in 2011
No bia si | 8 ee err | hệt,
I | Commercial state bank | 3 | 10 | 20 2
| Agribank Quang Binh 1 10 | 3B | - 2 | BIDV Quảng Bình ror fo fa
j TBDVBfẽQungBm =~=~=~=~CS~Ssi“<S SSS SSCSCC‘ TSS
II | Commercial joint stock bank 7g 2
l Vietcombank Quảng Bình | 1 | - a | -
2 | Vietinbank Quang Binh - ees Ss | e
3 Sacombank Quang Binh mw ‘ 5 = 4 | VPBankQuangBinh Yt | oe 6 5 Bac A Bank Quảng Bình 1 : i | »s | 6 MaritimeBank Quang Bình i | = : | 7 _ ACB Quảng Bình 1 "mà | * _ III Other credit organization 23 0 12 0 l Policy bank l - 6 - 2 The Central credit funds l - 2 - 3 Local Credit funds zl - 1 -
* Total 33 10 52 Ẵ
Trang 40Source: Quang Binh state bank (2011)
As BIDV Quang Binh is one of three large scaled and leading profit commercial banks in Quang Binh, its direct competors is determined including two capitalized SBs - Vietzombank Quang Binh va Vietinbank Quang Bình (Agribank Quảng Bình is out of quesion as this largest scaled bank exclusively for rural and agriculture which is not mair market segment of BIDV Quang Binh, also BIDV Bac Quang Binh as it is in the same BIDV system) and two CBs - Sacombank Quang Binh and VPBank Quang Binh
Operational network: BIDV system has two first grade branches in Quang Binh province with regulated operational region BIDV Bac Quang Binh operates in the region trom Lý Hịa pass to Quảng Trạch, Tuyên Hĩa, Minh Hĩa district, and BIDV Quang Binh implements its functions and missions in the region from Ly Hoa pass to Quảng Ninh Lé Thuy district and particularly Déng Hoi city — Economic center of Quang Binh proviace Therefore, operational network of BIDV Quang Binh is still thin compared to its conpetitors as well as other credit organization At present Vietinbank Quang Binh,
Saconbank Quang Binh and VPBank Quang Binh have advantage of large operational
network; especially Vietinbank Quang Binh has a fully operational network in districts, therefore it has many advantages to exploit local customers
Chart 2.3: Market share shifting in Quang Binh bank system
Picture A: Market share of capital Picture B: Credit market share mobilization t Đ 5 an + t Ê #4 ô a z _ 20070 ge nr a cal eee Ot css pm 681% | 559% eee ee eee cel Bist purvedtes | 163% | 240% L peice In ˆ~ 9.8% = 9.5% - J i Oi li raestgtsee i 15.6% | 20.2%
Source: State bank
lh period of 2007-2011, banks’ market share of capital mobilization and credit had have renarkable shift State CB group played key role and had highest market share