GRIGGS UNIVERSITY
GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM
CAPSTONE PROJECT REPORT
BUILDING BUSINESS STRATEGY OF
GLOBAL PETRO JOINT STOCK COMMERCIAL BANK - HANOI TRANSACTION OFFICE
IN THE PERIOD OF 2013 - 2017
Group Number: 03
Student's name:
Pham Thi Phuong Hanh Nguyen Tuan Hung Nguyen Xuan Phuong Dinh Quang Thang Vu Thi Thuy Hong
HANOI 2013
Trang 2COMMITMENT
This research theme is made by Group 03 of class GaMBA.M0311 of Global
Advanced Master of Business Administration Program - Griggs University We
guarantee that this is our own theme Our research results are honest that has never been
published in other themes.Up to date, the members of our group has no conflict of
Trang 3TABLE OF CONTENTS List of abbreviations List of tables List of figures Introduction Chapter I: THEORETICAL BASES OF ENTERPRISE’S BUSINESS STRATEGY 1.1 Concepts of strategy and strategic management 1.1.1 Concepts of strategy
1.1.2 The basic characteristics of strategy
1.1.3 The role of strategy 1.2 Classification of strategy
1.3 Strategy formulation process
1.3.1 Defining vision, mission and goal
1.3.2 Analysis of the external environment
1.3.3 Analysis of the internal environment
1.3.4 Support tools for strategic options
1.3.4.1 External Factor Evaluation Matrix (EFE) 1.3.4.2 Competitive Profile Matrix (CPM)
1.3.4.3 Internal Factor Evaluation Matrix (IFE)
1.3.4.4 SWOT Matrix
1.3.4.5 QSPM Matrix
Trang 42.1 Overview of Global Petro Joint Stock Commercial Bank (GP.Bank)
2.1.1 History and development
2.1.2 Organizing network, human resource 2.1.3 Vision, mission and core values
2.1.4 Products and services
2.2 Overview of Global Petrol Joint Stock Commercial Bank — Hanoi
Transaction Office (GP.Bank — Hanoi transaction office)
2.2.1 The process of formation and development 2.2.2 The organizational structure
2.2.3 Business activities
2.2.3.1 Credit Activities
2.2.3.2 Activities of raising capital
2.2.3.3 Activities of commercial sponsorship and international payment 2.2.3.4 Collection service
2.2.3.5 Business operating results of 2012
Trang 52.3.2.3 Customers 2.3.2.4 Suppliers
2.3.2.5 Substitute products
2.3.3 Evaluating opportunities and challenges
2.3.4 External Factor Evaluation Matrix (EFE) 2.4 Analysis of internal environment
2.4.1 Analysis of internal factors of GP.Bank — Hanoi transaction office 2.4.1.1 Organizing activities 2.4.1.2 Human resource 2.4.1.3 Facilities 2.4.1.4 Corporate culture 2.4.1.5 Technology 2.4.1.6 Competitive position 2.4.1.7 Financial capacity 2.4.2 Evaluating the strengths and weaknesses of GP.Bank — Hanoi transaction office 2.4.3 Internal Factor Evaluation Matrix (IFE) 2.5 SWOT analysis 2.6 The necessity of building business strategy for GP.Bank — Hanoi transaction office
Trang 6Transaction Office in the period of 2013 - 2017 3.1.1 General development goals
3.1.2 Development goals of Global Petro Joint Stock Commercial Bank —
Hanoi Transaction Office
3.2 Strategic Options
3.2.1 Strategic Options through SWOT matrix
3.2.2 Strategic Options through QSPM matrix 3.3 Implementation solution to strategic option
3.3.1 Solution to marketing, research and development
3.3.2 Solutions to organizational culture development
3.3.3 Solutions to human resource development
Trang 7GP.Bank GP.Bank — HTO OceanBank OceanBank - HK SeaBank SeaBank - SGD SO ST WO WT SWOT CPM IFE EFE FS ĐềPM LIST OF ABBREVIATIONS
Global Petro Joint Stock Commercial Bank
Global Petro Joint Stock Commercial Bank - Hanoi
Transaction Office
Ocean Commercia! Joint Stock Bank
Ocean Commercial Joint Stock Bank - Hoan Kiem branch Southest Asia Joint-Stock Commercial Bank
Southest Asia Joint-Stock Commercial Bank — Transaction Office
Competitive strategy combining the strengths & opportunities of the enterprise (Strengths-Opportunities)
Competitive strategy combining the strengths & threats of the enterprise (Strengths-Threat)
Competitive strategy combining the Weaknesses & opportunities of the enterprise (Weaknesses-Opportunities)
Competitive strategy combining the Weaknesses & Threat of the the enterprise (Weaknesses -Threat)
Strengths - Weaknesses - Opportunities — Threat Matrix
Competitive Profile Matrix
Internal Factor Evaluation Matrix External Factor Evaluation Matrix Financial Strength
rey SYsenithantaee
Trang 8USD VND WTO AFTA GDP ASEAN CEPT ATM American dollar Vietnamese dong
World Trade Organization Asean Free Trade Association
Gross national product
Association of Southeast Asian Nations
ASEAN agreement on the common effective preferential tariff
Trang 9LIST OF TABLES
Figure 1.1: SWOT matrix
Figure 2.1: Organizational structure of GP.Bank — Hanoi Transaction Office
Figure 2.2: Credit activities and credit structure according to the norms Figure 2.3: Credit structure by sector
Figure 2.4: Structure of raising capital by customers
Figure 2.5: The situation of capital mobilization of GP.Bank — Hanoi Transaction Office
Figure 2.6: Activities of trade finance — international payment of GP.Bank — Hanoi
Transaction Office
Figure 2.7: Business Result as of 31/12/2012 of GP.Bank — Hanoi Transaction Office Figure 2.8: Indicators for analysis of GP.bank’s position and its competitors’
Figure 2.9: Total assets, outstanding loans and mobilization of GP.Bank, SeABank, OceanBank
Figure 2.10: Operating results of GP.Bank, OceanBank, SeaBank in 2011, 2012
Figure 2.11: Competitive Profile Matrix of GP.Bank — Hanoi Transaction Office
Figure 2.12: Matrix of external factors of GP.Bank — Hanoi Transaction Office Figure 2.13: The structure and level of staff of GP.Bank — Hanoi Transaction Office
Figure 2.14 : Business activities of GP.Bank — Hanoi Transaction Office
Figure 2.15: Structure of asset securing for the loans in GP.Bank — Hanoi Transaction Office
Figure 2.16.: Key financial indicators over the years of GP.Bank — Hanoi Transaction Office
Figure 2.17: Matrix of internal factors of GP.Bank — Hanoi Transaction Office Figure 2.18: SWOT matrix of GP.Bank — Hanoi Transaction Office
Trang 10Figure 3.2: Roadmap for implementing strategy of GP.Bank — Hanoi Transaction Office gg in the period of 2013 - 2017
Trang 11INTRODUCTION 1 Reason for choosing research theme:
During the early years of the twenty-first century, it can be seen that the Vietnamese economy has strongly shifted to the market economy and international integration, many economic sectors have been forced to open by the Vietnam’s roadmap of joining the World Trade Organization (WTO) The Vietnamese enterprises have no longer been protected by the State, instead, they have to face with the vital problems of competition Vietnam's banking sector is not out of those problems Vietnamese commercial banks are striving to survive and develop in the context of
increasingly fierce competition today when financial corporations, foreign banks have
been constantly entering Vietnam such as: HSBC, Citigroup, ANZ, Tokyo - Mitsubishi UFJ, The Bank of New York This has led to the risk of narrowing the market for the
Vietnamese commercial banks In the process of international economic integration,
financial markets are expanding their scope of activities almost without borders, not
only to facilitate increased cooperation, but also to make competition deeper and more
severe So a problem arising is how Global Petro Joint Stock Commercial Bank - Hanoi Transaction Office (GP.Bank — Hanoi Transaction Office) must build the development
strategies to survive and develop in the future? Building development strategy is not
new, but it is always a problem that any organization must care and plan For banks in
general and GP.Bank - Hanoi Transaction Office in particular, in this period, again the
problem of building development strategy is given and become more necessary than
ever
From this fact, group 3 - class GAMBA.MO0311 has agreed to select the research theme: "Building the business strategy of Global Petro Joint Stock Commercial Bank - Hanoi Transaction Office in the period of 2013 -2017 "
2 Research purposes:
- Systematizing issues on the theory of strategic management
- Making analysis and assessment of enterprises’ business situation in the context of
Trang 12- Making support for enterprises to identify their positions in the market and since then has plans to build and implement strategies for their sustainable development
- Providing a number of strategic solutions for enterprises in the period 2013 - 2017 3 The object and scope of research:
Object of research: Making research on issues in the process of building the actual arising business strategy of GP.Bank — Hanoi Transaction Office
Scope of research: Making research on the business activities of Global Petro commercial joint stock bank — Hanoi Transaction Office and making comparison with
competitors that are Southeast Asia commercial Banks — Hanoi transaction office, Ocean commercial Joint Stock Bank - Hoan Kiem Branch
4, Research Methodology:
Using statistical method, comparative method, synthetic method, analytical
method to assess the factors that may affect business activities, affect the construction
and implementation of the business strategy of Global Petro joint stock commercial bank - Hanoi transaction office, assess the factors affecting the strategy including the internal and external environment of the enterprise
Using the minor data collection method from the teaching materials of Business Administration, resources of the State Bank of Vietnam, the results of business
activities of GP Bank - Hanoi transaction office and of the entire sector in recent years to lay the foundation for the development of enterprise’s strategic development
5 The significance of theme:
Providing the scientific methodology, assessing the situation and proposing some content in order to improve the overall business strategy development to ensure the development objectives of Global Petro Joint Stock Commercial Bank - Hanoi transaction office in the period of 2013-2017
6 The layout of theme:
In addition to the table of contents, list of abbreviations, list of tables, figures,
introduction, conclusion, list of references, the content of theme is divided into three
Trang 13- Chapter 1: Theoretical basis
- Chapter 2: Analysis of the operating environment of Global Petro Joint Stock
Commercial Bank — Hanoi Transaction Office
Trang 14CHAPTER I
THEORETICAL BASES OF ENTERPRISE’S BUSINESS STRATEGY 1.1 Concepts, features and the role of business strategy
1.1.1 Concepts of strategy and strategic management: 1.1.1.1 The concept of strategy:
Nowadays, with the rapid development of the world economy, leading to the growth and development in the fields of politics, culture, society because of showing the nature of decision and impact of economy on the fields of social life, The application of the "strategy" theory has become more popular and elevated by many different definitions of modern opinion and in accordance with the capacity that makes
a difference with the external environment
Currently, there are many different definitions of strategy, the cause of this
difference is due to the different systems of concepts in term of organization in general
and the different approaches of the organization's strategy in particular
In term of ontology, depending on the perspective of positivism or trend of constructivism, the essence of strategy is determined by the law of nature or the significant impact of subject In fact, strategy is usually defined practically to facilitate the process of practice within the organization
According to Johnson and Scholes, strategy is defined as follows:
"Strategy is the determination of direction and operating scope of an organization in the long term, in which the organization must gain the advantage
through a combination of resources in a challenging environment, to meet the best
market needs and meet the expectations of agents related to the organization"
Professor Michael L Porter — a father of the theory of competition said that: "Strategy is the art of building a solid competitive advantage for defense"
Trang 15Thus, the strategy is related to enterprise’s objectives Strategy is the way of implementing the actions and decisions are closely related to each other and selecting methods to coordinate those actions and decisions Enterprise’s strategy must exploit ‘he strengths (resources and capacity), fix the enterprise’s weaknesses and take into account the opportunities and challenges of the external environment
1.1.1.2 The concept of strategic management:
According to Alfred Chandler, strategic management is the process of identifying basic iong-term goals of the enterprise, choosing the way or direction of action and allocating essential esources to implement those objectives
According to John Pearce and Richard B Robinson, strategic management is a system of decisions and actions to establish and implement plans to achieve enterprise’s objectives
In view of the team researching theme, strategic management is a systematic process from developing strategy, implementing strategy, controlling and reviewing strategy in order to achieve goals set by enterprise
1.1.2 The basic characteristics of strategy
On the basis of analyzing the origin of strategy above, we find that so far there still have been many different views and approaches of strategy By any aspect, in any period, the basic characteristics of the business strategy are conceived in a relatively unified and particular way:
- Business strategy defines the basic business goals and orientations needed to
achieve in each period and thoroughly completed in all aspects and all areas of
corporate management activities
- Business strategy only outlines operating directions of the enterprise in the long term, the enterprise’s operational framework in the future It is only oriented in practice that requires a combination of strategic objectives and economic objectives of the
enterprise
Trang 16- Business strategy is reflected in a continuous process from building to implementing, checking, adjusting strategy
- Business strategy is formed and implemented on the basis of promoting strength, taking advantage of business opportunities in order to achieve the highest
business performance
- Developing, implementing, testing, evaluating and adjusting strategies that are focused on the enterprise’s high-level administrators
- Business strategy is often built in the long term: 3 years, 5 years and 10 years By studying the characteristics of strategy, we can see that the outstanding issue of strategy is creating ideas, plans to support so that an enterprise can make successful competition with its competitors This is a modern approach to study the competitive
position of the enterprise
1.1.3 The role of business strategy:
Business strategy plays such an important role, determining the success or failure, the mission of the enterprise Strategy identifies where an enterprise is and will be, where it wants to go and how Strategy makes enterprise know what it has What its competitors have? Strategies facilitate enterprise to use resources efficiency that increases competitive advantage compared to its competitors
Business strategy plays an important role and has important properties for the business performance of enterprise since strategy identifies enterprise’s mission, goals
and direction in the future as the guideline for all activities of the enterprise Business
strategic plays the role of orienting enterprise’s activities in the long-term; it is a solid basis for the operational implementation The absence or lack of strategy or the setting of strategy is not clear having no solid argument that will make business disorientation, arise problems easy to find but not in the long-term without seeing local role in the
entire enterprise’s operational activities
Helping enterprise identify business opportunities at the same time by strategy also define and analyze clearly its risks and threats Through strategy also helping enterprise identifies its strengths advantages and also indicates weaknesses needed to
Trang 17Strategies help allocate and use resources of the enterprise resource in the most effective way, increase its competitive position and promotion image, brand, products of the enterprise
Strategy is the most solid and scientific basis so that the economists, economic experts, enterprises can give the most reasonable solutions, policies
1.2 Classification of business strategies:
1.2.1 Business strategies of the enterprise in general:
There are 3 types of strategies which are the most commonly used by enterprises
today:
1.2.1.1 Company Strategy
Company strategy is a long-term strategy that is related to the overall mission and objective, the size of enterprise to meet the expectations and expenditures of the bosses, the senior managers of the enterprise The company strategy is long-term with sweeping views that dominates all other strategies such as business strategy, functional strategies
1.2.1.2 Business strategy (SBU)
Business strategy is a business strategy regarding how an enterprise can compete successfully in a specific market that involves strategic decisions on product selection, satisfying the customers’needs, finding a competitive advantage compared to its competitors, ing and creating new opportunities
1.2.1.3 Functional strategy
Functional strategy is operational strategy regarding how each department of the enterprise will organize, deploy, and review to implement business strategy and corporate strategy Functional strategy focuses on specific resources and deployment strategy: product strategy, pricing strategy, distribution strategy, market entry strategy 1.2.2 Practical business strategy in banking activities
In the practices of the banking industry, it is possible to generalize some typical strategies as follows:
1.2.2.1 Strategy of consolidating market share
Strategy of consolidating market share aims to strengthen the position and image of bank through improving management model, making review and completing the
Trang 18control system, improving the quality of products and services to maitain its customers This strategy is often applied by the banks in the period of credibility crisis 1.2.2.2 Strategy of diversifying products and services
Strategy of diversifying products and services aims to diversify products and Services to satisfy customers’needs the best to develop customers and increase profits This strategy is usually applied by banks in the period business activities with high growth rate
1.2.2.3 Strategy of expanding distribution network
Strategy of expanding distribution network aims at diversifying and expanding the bank's distribution channels This strategy is often applied by the banks in the period of accelerating to compete
1.2.2.4 Focus strategy
Focus strategy defines segments, fields, products that banks can be the most
powerful from which focuses all resources of the bank in order to achieve high growth and efficiency
1.2.2.5 Differentiation strategy
Differentiation strategy identifies the building of typical aspects of the bank of their own products and services, distribution channels, marketing policies compared to other competitors in order to achieve their goals
1.3 The process of building strategy
The process of building strategy can be divided into five main steps, including:
- Step 1: Identifying the strategic mission and objectives of the enterprise
- Step 2: Making analysis of the external environment to identify opportunities
and threats
- Step 3: Making analysis of the internal environment to identify the strengths and weaknesses of the organization
- Step 4: Selecting the strategies (based on seeking resources, capabilities and core competencies then developing it to neutralize the risks, take advantages of opportunities from the external environment)
Trang 19In the scope of this research, the following theoretical models will be selected to analyze the situation, position of GP.Bank — Hanoi Transaction Offices of chapter 2, as a basis for selecting strategies and providing recommendations to implement strategy for GP.Bank - Hanoi Transaction Office in the period 2013 -2017 in chapter 3 of the theme
1.3.1 Defining the business vision, mission, objectives of the enterprise
The determination of vision and mission aims to identify what the enterprise is, in which position of the current context it is, which desired positionn it wants in the future, what its long-term goal is Determining the mission, goals is very important in building strategy that helps strategic planners identify sources of information needed to be collected, processed and set for strategy
1.3.2 Analysis of external environment
Operating environment of enterprise combines bothinternal and external factors,
forces and institutions that regularly impacts affecting the enterprise’s operational results
Operational environment of the enterprise can be divided into macro environment and micro environment
1.3.2.1 Macro-environment
PEST model is used to analyze the external environment of the enterprise It
includes elements, institutions that generally affects different enterprises:
- Political, legal environment;
- Economic environment;
- Socio-cultural environment; - Technological environment 1.3.2.2 Micro-environment
Trang 20- Subsfitute products
The analysis of external environment of the enterprise is quantitative and
difficult to determine In strategic management, models are used to measure and
evaluate the environmental impacts on the enterprise’s operation that is the external factor evaluation matrix (EFE) and competitive profile matrix
1.3.3 Analysis of internal environment
If the study of external environment helps enterprise use, make awareness of the Opporiunities and challenges encountered in its process of operation, the analysis of internal environment of the enterprise will help managers be aware of the enterprise’s strengths and weaknesses From which can choose the appropriate business strategy in order to maximize the strengths and overcome the weaknesses of the enterprise
The enterprise’s internal environment is evaluated through the resources that are: - Organizing activities; - Human resources; - Facilities; - Corporate culture; - Technology; - Competitive position
The model is used in strategic management to measure and evaluate internal factors that is Internal Factor Evaluation (IFE)
1.3.4 Tools supporting for strategic options
1.3.4.1 External environment factor evaluation matrix (EFE)
EFE matrix makes evaluation of external factors, generalizes and summarizes
the primary opportunities and risks of the external environment that affects the enterprise’s operational process Through which helps enterprise’s managers assess the response level of the enterprise to opportunities, risks and make judgments about the
external factors which is favorable or difficult for the company
To build this matrix, it is necessary to implement 5 following steps:
Trang 21including the opportunities and threats affecting the enterprise and the business sector of this enterprise
- Classifying the importance from 0.0 (not important) to 1.0 (very important) for each element This classification shows the respective importance of these factors to the success of the enterprise’s business sector The opportunity often has higher classification than threat; however threat may also be aware of the higher classification if it is especially severe or identifiable threat The appropriate classification level can be determined by making comparison of successful competitors with unsuccessful competitors or by discussing this factor and achieving group consensus Total classification levels are assigned to these factors must be 1.0
- Classifying from 1 to 4 for each determinant of the success to show how the current strategy of the enterprise responses to this factor, in which 4 is the best response, 3 is above- average reaction, 2 is the average response and | is the less reaction These levels are based on the effectiveness of strategies in enterprise Thus,
this classification is based on the enterprise, while the classification of step 2 is based on sector
- Importance of each variable with its type aims to determine the number of
importance score
- The total score of the importance for each variable aims to determine the total number of importance scores for the organization
Evaluation: The total scores of the matrix does not depend on the number of elements in the matrix The highest total importance score is 4.0, the lowest is 1.0 and the average is 2.5
- If the total score is 4 showing that the enterprise is responding well to the
opportunities and risks
- If the total score is 2.5 showing that the enterprise is averagely responding to
the opportunities and risks
- If the total score is 1 indicating that the enterprise is weakly responding to the opportunities and risks
Trang 221.3.4.2 Competitive Profile Matrix (CPM)
Of all the events and trends that the environment can affect the strategic position of a company, the impact of competition is often considered to be the most important Competitive profile matrix identifies the main competitors with their special advantages and disadvantages
Competitive profile matrix is an extension of external factor evaluation matrix in
case levels of importance, classification, and the total important scores are of
significance Competitive profile matrix is different with the external factor evaluation matrix by internai factors are of importance determining the success can also be included in it, for example the financial stability, the effectiveness of advertising, the
expertise for research and development activities In addition, the difference between
two matrices is the classification level of the competitor companies included in the
competitive profile matrix with a total importance scores of these companies are also calculated Total assessed score of competitor companies is compared with the sample companies The special classification levels of the competitor companies can be compared with the classification level of the sample companies This comparative analysis provides important strategic information
1.3.4.3 Internal Factor Evaluation Matrix (IFE)
Tools forming IFE strategy summarize and evaluate the strengths and
weaknesses of the functional business departments, and it also provides the basis for identifying and assessing the relationship between these departments To develop an
IFE matrix, intuitive comment is needed, so the formality of scientific method must be interpreted to show that this is the most effective technique IFE Matrix can be developed by five steps:
- Listing the critical success factors as identified in the internal control process Using all of 10 to 20 internal factors, including strengths and weaknesses
Trang 23seen as the most influential ones to the organization’s performance must be considered to be the most important The total of all these critical levels must be 1.0
- Classifying from | to 4 for each factor that will denote that factor represents the biggest weakness (classified by 1), the smallest weakness (classified by 2), the smallest strength (classified by 3), or the greatest strength (classified by 4) Thus, the classification is based on the company while the importance level of step 2 is based on the industry
- Multiplying each level of importance of each factor with its type to determine
the critical score for each variable
- Summing all the important scores for each variable to determine the total importance scores of the organization
Assessment: Not mentioning how many factors IFE matrix has, the total importance scores can be classified from the lowest level of 1.0 to the highest one of 4.0, and the average score of 2.5 The total importance score is lower than 2.5 showing that internal company is weak, and the score higher than 2.5 showing that the internal company is strong An IFE matrix should have 10 to 20 key factors The number of factors does not effect for group of total importance score as the sum of the importance levels is always equal to 1.0
1.3.4.4 Analysis by S.W.O.T model
SWOT analysis model is a useful tool for understanding and decision-making in any situation for any business organization It stands: Strengths, Weaknesses, Opportunities and Threats
Strengths and Weaknesses are internal factors of the company while Opportunities and Threats are external impact factors SWOT allows the analysis of different factors affecting relatively competitiveness of the company SWOT is often
associated with PEST (Political, Economic, Social, Technological analysis), models of
market analysis and potential assessment are through external factors in terms of politics, economy, society and technology Analysis by SWOT model is the evaluation of data arranged in the form of SWOT in a logical order to help you understand, present and discuss for easier decision-making
SWOT matrix is used to form the strategic plan that follows these steps:
Trang 24- Step 1: Generalizing the results of analysis of the business environment -
Opportunities and risks
- Step 2: Generalizing the results of internal business environment analysis - strengths and weaknesses
- Step 3: Generalizing the results and forming the SWOT matrix - Strengths and weaknesses - Opportunities and threats
Group of strategic plan formed:
- S-O strategy aims to use the strengths of enterprise to take advantage of external opportunities
- W-O strategy aims to overcome weaknesses to take advantage of external
Oipportunities
- S-T strategy usesenterprise’s strengths to deal with external threats - W-T strategy aims to overcome weaknesses to reduce the external risks SWOT matrix is illustrated by the following picture: S Ww Listing strengths Listing weaknesses O Listing opportunities S - O Strategy W-O Strategy T Listing challenges S-T Strategy W.-T Strategy Figure 1.1: SWOT matrix 1.3.4.5 QSPM Matrix
In addition to the classification of strategies for the establishment of a priority list,
Trang 25results of the analysis in the second stage to assess, decide objectively strategies which can be replaced, firstly, based on the external and internal key success factors that have been identified As well as the analysis tools for the formation of other strategy, QSPM matrix requires good intuitive judgment
Positive aspects of OSPM matrix:
- Strategic groups can be studied at the same time There is no limit to the number of strategies which can be studied at the same time when using QSPM matrix
Requiring that strategists must combine internal and external appropriate factors
the decision-making process QSPM Matrix can be used for all profit and non-profit
organization, suitable for almost any type of organization Limitations of OSPM matrix:
- QSPM matrix requires intuition judgment based on experience
- QSPM Matrix can only be as good as the important information and analysis of
Trang 26CHAPTER 2
ANALYSIS OF OPERATING ENVIRONMENT OF GLOBAL PETRO JOINT STOCK COMMERCIAL BANK- HANOI TRANSACTION OFFICE 2.1 Overview of Global Petro Joint Stock Commercial Bank (GP Bank) 2.1.1 Process of forming and development a General information Name of the : Global Petro Joint Stock Commercial Bank Bank Abbreviation : GP.Bank Charter capital : 3.018.000.000.000 VND Headquarter : 109 Tran Hung Dao, Hoan Kiem district, Hanoi city Tel : (84-4) 37 345 345 Fax : (84-4) 37 263 999 Website : www gpbank.com.vn b Development process
In 1993: Formerly as Ninh Binh Rural Joint Stock Commercial Bank, including
05 transaction offices and trading in gold in Ninh Binh Province with registered capital
of 05 billion VND
In 2005: Officially became Urban Bank, by the name of the Global Commercial
Joint Stock Bank (G-BANK), its Head office was at 17 Ly Thuong Kiet, Hoan Kiem,
Hanoi with its charter capital of 135 billion dongs
In 2006: G-BANK announced its strategic shareholder - PetroVietnam Its
transaction office was moved to 273 Kim Ma, Ba Dinh, Hanoi and increased its charter
capital to 500 billion dongs
In 2007: Officially renamed the Global Petro Joint Stock Commercial Bank
(GP.Bank) with a charter capital of 1,000 billion dongs
Trang 27brands in Vietnam in 2009 It is of top 500 largest private enterprises in Vietnam in 2009
In 2010: GP.Bank increased its charter capital to 3018 billion dongs Its Head
office moved to 109 Tran Hung Dao Street, Hoan Kiem District, Hanoi Also in 2010,
GP.Bank set up its first affiliated company: Asset exploitation and debt Management limited Company of Global Petro Joint Stock Commercial Bank (GP.Bank AMC) 2.1.2 Organizing HR and network
As of the end of 2012 the business network of GPBank nationwide included: Head Office, 01 Transaction office and nearly 80 branches / transaction offices and savings along with a team of over 1,400 staff trained professionally
GP.Bank much focuses on attracting and building new human resources, in which focuses on gathering a team of young human formally trained from universities
and experienced workforce of the banking sector Currently, over 94% of GP.Bank’s
staff has university degrees, postgraduate degrees and professional expertise
2.1.3 Vision, Mission and Core Values Vision:
On the basis of full experience and operation, GP.Bank has experienced strong growth and is implementing its own development strategy by the goal of becoming a
retail bank "not the first but the best" in Vietnam Mission:
- Providing a full range of financial products and services perfectly in
accordance with international standards, to best meet the diverse needs of customers
- Contributing to the economic development of the country based on timely and flexibly satisfying the customers’ needs of production - business - service with modern
Trang 28facilities, new products and services with professional serving style to bring the highest profits and benefits for GP.Bank and its shareholders and create favorable conditions
for GP.Bank staff Core values: - Customers as focus; safe operation, focusing on efficiency, clarity and transparency - Professional working environment and career development opportunities for staff
- Modern information technology systems 2.1.4 Products and services
GP.Bank provides a full range of internationalky financial - banking services
such as: deposits guarantee credit, international payments, financial service — study abroad, foreign exchange trading, cards, money transfer services, mobile banking
services and other banking services With the mission "commit to success", GP.Bank
provides many financial and banking services based on advanced technology to
maximize customers’ benefits
In 2010, GP Bank made increasing utility for GP.Mobile services and expanded the network of POS with the successful connection with Banknet card alliance
Modern information technology system is one of GP Bank’s current advantages to increase the competitiveness and moreover to bring customers the leading banking services and utilities GP.Bank is one of the first banks sucessfully applying T24 core banking system software (Core Banking) of the Swiss company — Temenos that is
capable of handling more than 10,000 transactions / second Currently, GP.Bank is
Trang 292.2 Introduction on GP.Bank — Hanoi Transaction Office
2.2.1 The process of formation and development
According to operational development policy of GP.Bank, GP.Bank - Hanoi Transaction Office was established in November/2009 at 14 Ngo Quyen Street, Hoan Kiem District, Hanoi City under Decision No 501 /2009/QD dated on May 19th, 2009 of the GP.Bank’s Chairman of the Board Its Business Activities were under business registration no: 2700) 13651-012 firstly issued on May 25", 2009, its the fifth change was on January 12nd, 2012 issued by Hanoi Department of Planning and Investment - Business Registration Office No 1
GP.Bank’s main area of activity — Hanoi Transaction Office was trading in currency - credit - bank and financial services with the basic transactions including:
- Mobilizing deposits of organizations and individuals domestically and
internationally - Loan - Guarantee
- Domestic deposit and payment services
- Comercial finance and international payments - Other financial and banking services
2.2.2 Organizational structure of GP.Bank — Hanoi Transaction Office
As for organizational structure, GP.Bank — Hanoi Transaction Office is divided
into 05 rooms and 04 subordinate business units The organizational structure of
GP.Bank - Hanoi Transaction Office is as follows:
Trang 30
TT (Source: Administration and organization Dept oƒŒP Bank — Hanoi Transaction Office)
Figure 2.1: Organizational structure of GP.Bank — Hanoi Transaction Office 2.2.3 Business activities of GP.Bank - Hanoi Transaction Offices
In recent years, the world economy has gone through very difficult stages and faced a lot of challenges such as economic recession, inflation, unemployment Not outside that general trend, the Vietnamese economy has experienced extremely difficult times with instable macroeconomy when inflation has been still high, the budget deficit is not significantly reduced, interest rates and exchange rates are unpredictable, banking and financial system is unstable, not good support for the economy, Economic crisis affects income directly, business results of each enterprise, individual from which affects the operational results of the banking system in general and GP.Bank — Hanoi Transaction Office in particular In rerent years, GP.Bank — Hanoi Transaction Offices has shared difficulties with its customers by reducing lending rates as well as increasing provision for bad debt management risk that has made the profit gained of GP.Bank -
Trang 31Hanoi Transaction Offices be reduced Besides, the enterprise’s amount of idle cash strongly declines that affects mobilized funds of GP.Bank - Hanoi Transaction Offices The mobilization of GP.Bank - Hanoi Transaction Offices gets many difficulties due to fiercely competing with banks of Hanoi city Business operating results of GP.Bank - Hanoi Transaction Offices will be specially analyzed as follows:
2.2.3.1 Credit Activities
As for credit operations, in 2011 and 2012 due to tight credit policy of the State Bank, Along with high inflation, production and business of enterprises and individuals
got many difficulties, rates of mobilization and loan strongly changed, scarce money, lending rates of 2011 and early 2012 sometimes went up to 23-24% / year that exceeded
the customers' ability and made a very large impact on the results of credit activity of
the banking sector in general and GP.Bank - Hanoi Transaction Offices in particular
During the past time, mobilized capital structure of banks has mainly been short-term mobilized capital (under 03 months),
The last actions of the state banks, including lowering interest rates, loosing credit for real estate and securities, supporting enterprises to process loans of overdue
payments enabled GP.Bank — Hanoi Transaction Office to improve the situation of
credit growth affected by the economic difficulties as mentioned above, Restructuring loan and facilitating customers to be easier to access to loans, empowering enterprises to continue to stabilize production and business development
Trang 32| F — Pe hate he cis Short-term 1.094,96 1.116,61 “Construction industry, real estate, construction 103,82 16% 127,29 18% 90,38 18 | materials | The electricity, | chemicals, 32,44 5% | 42,43 6% 25,59 5! telecommunications, Transportation 19,46 3% 14,15 2% 10,04 | 2 Trade services 32,44 5% 21,27 3% 20,84 4 “| The hotels, restaurants 12,98 2% 49,50 7% 15,06 36 Other sectors 6,49 1% 14,14 2% 5,02 i Medium 263,61 13% 204,72 11% 182,59 Long-term Vietnamese Dong (VND) 669,15 1.926,33 95% 539,70 1.712,14 29% 92% 486,90 1.445,47 Foreign currency converted to VND 101,39 5% 148,89 8% 76,08
(Source: Report on the business results of GP Bank - Hanoi Transaction Offices) Figure 2.2: Credit activities and credit structure according to the norms
Trang 33Construction, real estate, construction materials ø Electricity, chemicals, telecommunications “ Transportation = Commerce, Services © Hotels, restaurants = Other sectors Individuals = Households business
(Source: Report on the 2012 business results of GP.Bank - Hanoi Transaction Office) Figure 2.3: Credit structure by sector
2.2.3.2 Activities of raising capital
Recently, the Vietnamese economy which is directly banking and financial sector has got difficulties due to the influence of the world economic crisis, leading to significantly affected income of enterprises, household and individuals from which affects the mobilization result of capital of the banking sector in general and GP.Bank - Hanoi Transaction Offices in particular Thanks to management efficiency and the
staff's efforts of GP.Bank - Hanoi Transaction Offices, in 2011 the mobilization
activities of GP.Bank - Hanoi Transaction Office poorly developed compared with
2010, but in 2012 this decrease was slow and maintained stably To exploit idle capital of society and be more active in business activities, in recent years, GP.Bank - Hanoi Transaction Office has implemented various products of mobilized capital by
Vietnamese dong and foreign currencies, with many different terms in order to attract
strongly capital and meet the customers’ diverse needs Currently, GP.Bank - Hanoi
Transaction Office mobilizes saving mainly in terms of 1 month, 2 months, 3 months, 6
months, 12 months Besides, with the goal of becoming a multi-functional retail bank, capital mobilization policy of GP.Bank has focused on individual customers, small and
Trang 34medium enterprises, corporations To ensure the steady growth of capital mobilization activities, GP.Bank - Hanoi Transaction Offices has applied flexible products for raising Capital, customers have more appropriate options for their demand, together with which is many exciting promotions 80% ; 70% 4 _ ae 67% 60% - 50% - rà 40% | | 37% 30% | 20% | 4 2010 2011 2012 Olndividual 32% 33% | customers O Organization customers
(Source: Report on the business results of GP.Bank - Hanoi Transaction Office) Figure 2.4: Structure of raising capital by customers
The situation of capital mobilization in GP.Bank - Hanoi Transaction Offices is
Trang 35lio nN Savings deposits 925,12 793,65 968,74 -16,64% 18,07% According to | customers Zul Economic organizations 791,20 204,01 408,35 -137,08% 18,26% Zu Resident 982,15 859.21 15055 -14,31% 16,63% According to types of currency Sel Vietnamese dong 1.600,80 1.124,08 1.344,19 -42,41% 16,37% km Foreign currency converted to VND 172,65 68,90 94,71 -150,58% 212-390 H Deposits and other borrowings 517,61 373,99 143,24 -38,40% -161,09% IH Releasing valuable papers (Source: Report on the business results of GP Bank - Hanoi Transaction Office) Office
2.2.3.3 Activities of trade finance - international payment
Figure 2.5: The situation of capital mobilization of GP.Bank — Hanoi Transaction
Along with raising capital and credit, activities of trade finance - international payment are also focused to develop by the Board of directors of GP.Bank — Hanoi Transaction Office This is a service activity actively supporting and being related to credit
Trang 36operations, capital raising, exchange trading Activities of Trade Finance - International payment of GP.Bank — Hanoi Transaction Offices include:
- Issuance and payment of import letters of credit; notice, certification, import
letter of credit payment
- Import and export Collection; bills of exchange collection and acceptable bills of exchange collection
- Western Union money transfer
Trang 37| According to 7 customers Economic organizations | gud i922) W532} 617,91 4,49% -21,91% 2.2 | Resident 4.12 6,85 3,41 39,85% -100,88% Western Union Gò 1526 11,46 8,71 service | k, | | L (Source: Report on the business results o'ŒP Bank - Hanoi Transaction Oÿìce)
Figure 2.6: Activities of trade finance — international payment of
GP.Bank — Hanoi Transaction Office 2.2.3.4 Service collection
By the end of 2012 the total service collection of GP.Bank - Hanoi Transaction Office was over 6.8 billion dongs The property of net service collection of business profits reached over 25% - a very impressive result in the current competitive condition The
net service collection of GP.Bank — Hanoi Transaction Office includes domestic and
international payment service collection, professional collection from guarantee activities, from trading foreign currency, from the transactions related to the budget and payment accounts, other collection Of the above service collections, foreign banking services remains to be its strength providing the highest revenue for GP.Bank — Hanoi
Transaction Office In which trade finance services always occupy the leading position,
accounting for 40% of total service collection Services of foreign currency trading have experienced many difficulties, and the main objective of GP.Bank — Hanoi Transaction Office is fully and timely satisfying customers' demand for foreign currency, but not tending to interest collection of foreign exchange trading Achieving this result must thank to GP.Bank — Hanoi Transaction Office which has good grasp of market signals, proactively takes care of the foreign currency source for the purpose of foreign exchange collection of charge In 2012, revenue from payment service and treasury grew evenly compared to 2011 that continues to assert its dominance when for years it has maintained its continuous position of being the focal point for transfer of
Trang 38furds in the system and being a unit having service collection with the most stable
growth rate
2.2.3.5 Business operating results of 2012
In 2012, the total assets of GP.Bank — Hanoi Transaction Offices was 2064.27
billion dongs, reduced by 26.57% compared to 2011 that was caused by the difficult eccnomic situation affecting the activities of capital mobilization and lending of GP.Bank — Hanoi Transaction Office Although in 2012 the raising of capital of GP Bank — Hanoi Transaction Office reached higher growth rate compared to 2011 by 0.95%, the growth rate of credit of 2012 strongly declined 22.31% compared to 2011
Thus, this made the total assets of GP.Bank — Hanoi transaction office of 2012 decreased compared to 2011 Unit: Billion VND - Percentage increase / No Target 2010 2011 2012 decrease 2012/2011 (%) 1 | Total assets 241751 | 2.61265 2.064,27 -26,57% 2 | Capital mobilization 2.291,06 | 1.566,97 1.582,14 0,96%
3 | Credit balance 2.027,72 | 1.861,02 Loco -22,31%
4 | Annual risk provision T7721 28,83 37,60 23,32%
S| Net service collection 6,37 392 5,38 -15,98%
6 | Profit after tax 59,02 48,66 20,82 | -133,72%
Source: Report on the business results of GP Bank - Hanoi Transaction Office)
Trang 39In difficult trading condition of the entire industry, to survive and compete, the leadership of GP.Bank — Hanoi Transaction Offices and all staff have to manage, make more utilities for customers to maintain its stable operation, retaining market share, customers is one of the solutions that GP.Bank — Hanoi Transaction Offices has performed and directed but not merely directed to profits and attracted capital Therefore, although in 2012 business result was still profitable that did not achieve given goals and was lower than in 2011, the number of customers of GP.Bank — HanoiTransaction Office had almost no strong decline
2.3 Analysis of the external environment 2.3.1 Macro environmental analysis
Macro environmental analysis can help us find out opportunities and challenges affecting the business activities of the enterprise at the present time as well as in the future The macro-environmental factors affecting the current business activities of enterprises include: political factors, economic factors, social and technological factors 2.3.1.1 Political and legal environment
Political environment:
- Vietnam is considered as a country having stable political and social environment in comparison with other countries of the region Compared to other
ASEAN countries such as Indonesia, Malaysia, the Philippines and China, Vietnam has
less issue related to religious and ethnic conflicts After implementing the "renovation"
policy, Vietnam has achieved high GDP growth and maintained its political and macro-
economic stability
- A stable political environment makes favorable conditions and opportunities for the development of domestic enterprises It also creates attraction, to foreign enterprises to expand their investments into Vietnam
- Political stability will reduce the risk of terrorism, strike Thus helping the enterprises’ process of production, busines avoid the risks And through which, it will attract investment in industries, including the banking sector
Legal environment:
Trang 40- Any enterprise is also subject to the strong impact of the law, especially for enterprises trading in the banking sector, a sector affecting the entire economy The activities of the banking sector are closely adjusted by the provisions of the law, moreover commercial banks are also subject to the close control of State Bank
- In recent five years, the legal framework for banking activities has been gradually improved to meet the needs of international economic integration To build a modern banking system, in accordance with international practices and standards, improving operational efficiency of the banking sector, in 2010 the State Bank Law and the Law on Credit Institutions were supplemented and modified Until now, the banks are operating under the Law on Credit Institutions No 47/2010/QH12, formally adopted by the National Assembly and taken effect from the date of January 1°, 2011 For recent years, the State Bank has repeatedly changed the measures of operating monetary policy to stabilize the value of money, promote economic growth, ensure the stability of banking system development through the operating tools such as open
market operations, foreign currency swap Management mechanism of foreign
exchange, credit, capital mobilization and payment is more and more flexible,
improving the self-control and self-responsibility of banks
2.3.1.2 Economic Environment
Business structure and operating results of enterprises in the area of Hanoi city: - In recent years, the economy of Hanoi has recorded its development in terms of the common difficulties of the economy with higher interest rates, more enterprise have got difficulties in making access to capital Hanoi’s growth rate of 2012 reached 8.1%, the output of the 14/21 key industrial product of the city has tended to fall through
months Registration number of establishing new enterprises decreased significantly In
2012, there were 15,000 new enterprises with their capitals of 83,000 billion dong,
equivalent to 90% number of enterprises and 70% of the registered capital in 2011 and
there were 12 249 decommissioned In which, 420 enterprises have business