Hoàn thiện chiến lược kinh doanh ngân hàng TMCP liên việt bank

Hoàn thiện chiến lược kinh doanh Ngân hàng TMCP Liên Việt BankPERFECTING BUSINESS STRATEGY OF LIEN VIET COMMERCIAL JOINT STOCK BANK FOR 2015 2020 PERIODARGUMENTATIVE BASIS ON STRATEGIC MANAGEMENT IN THE ENTERPRISE PRESENT SITUATION OF BUSINESS STRATEGY OF LIENVIET COMMERCIAL JOINT STOCK BANK PERFECTING BUSINESS STRATEGY OF LIENVIET COMMERCIAL JOINT STOCK BANK FOR 2015 2020 PERIOD

LUẬN VĂN Hoàn thiện chiến lược kinh doanh Ngân hàng TMCP Liên Việt Bank THESIS PERFECTING BUSINESS STRATEGY OF LIEN VIET COMMERCIAL JOINT STOCK BANK FOR 2015 - 2020 PERIOD TABLE OF CONTENTS COVER PAGE TABLE OF CONTENTS ABBREVIATIONS LIST OF TABLES INTRODUCTION CHAPTER 1: ARGUMENTATIVE MANAGEMENT IN THE ENTERPRISE 1.1 BASIS ON STRATEGIC Overview of strategic management 10 10 1.1.1 Definitions 10 1.1.2 Process of strategic management 12 1.2 13 Mission; Vision; Core Value 1.2.1 Mission 13 1.2.2 Vision 14 1.2.3 Core value 14 1.3 15 Strategic analysis 1.3.1 Analysis of macro-environment 15 1.3.2 Analysis of sectoral environment 18 1.3.3 Analysis of internal environment 21 1.3.4 Summary of SWOT analysis 22 1.4 24 Selection of preferential strategy 1.4.1 Corporate level strategy 24 1.4.2 Business level strategy 25 1.5 27 Implementation & evaluation 1.5.1 Organizational structure 27 1.5.2 Control system 28 1.5.3 Route construction for implementation 29 CHAPTER 2: PRESENT SITUATION OF BUSINESS STRATEGY OF LIENVIET COMMERCIAL JOINT STOCK BANK 30 2.1 Introduction of Lien Viet Commercial Joint Stock Bank 30 2.1.1 General information 30 2.1.2 Organizational structure of Lienviet Bank 31 2.1.3 Products and services of Lienviet bank 32 2.1.4 Business performance in 2008 and the first half of 2009 32 2.2 35 Analysis & evaluation of LienViet Bank’s present business strategy 2.2.1 Current strategic commitments of LienVietBank 35 2.2.2 Analysis of macro-environment impacts 37 2.2.3 Analysis of sectoral environment impacts 41 2.2.4 Analysis of LienVietBank’s internal environment 45 2.2.5 Current business strategies 55 2.2.6 Current organizational structure & control system 63 2.3 Comments and evaluations on implementing the business strategy of LienVietBank 66 CHAPTER 3: PERFECTING BUSINESS STRATEGY OF LIENVIET COMMERCIAL JOINT STOCK BANK FOR 2015 - 2020 PERIOD 67 3.1 Corporate development orientation 67 3.1.1 Table of summary of SWOT analysis 67 3.1.2 Development orientation 68 3.1.3 Objectives 69 3.2 69 Perfecting strategic commitments of LienVietBank 3.2.1 Mission 69 3.2.2 Vission 70 3.2.3 Core Value 70 3.3 Perfecting business strategy of LienVietBank in 2010-2015 70 3.4 Solutions for perfecting strategy of LienVietBank 71 3.4.1 Technological solutions 71 3.4.2 Human resources solutions 73 3.4.3 Solutions for improvement of financial capability 75 3.4.4 Marketing solutions 78 3.4.5 Solution for improvement of risk management capability 82 3.4.6 Research & Development (R&D) 82 3.4.7 Solution for organizational development and expansion of business lines 83 3.4.8 Conditions for strategic implementation 84 3.5 85 Perfecting organizational structure and control system 3.5.1 Perfecting organizational structure 85 3.5.2 Control system 86 3.6 Route for implementation of strategic solutions 87 CONCLUSION 88 REFERENCES 89 APPENDIX: ORGANIZATIONAL CHART OF LIENVIETBANK 90 ABBREVIATIONS LVB LienVietBank - Lien Viet Commercial Joint Stock Bank MB Military Bank Techcombank Technological and Commercial Joint- stock Bank HSBC Hongkong Shanghai Bank Corporate ALCO Assets and Liabilities Committee MSS Mobivi Securities Settlement ATM Automatic Transfer machine GDP Gross Domestic Product ISO International Standard Organization TQM Total Quality Management IT Information Technology L/C Letter of Credit ODA Official Development Assistance POS Point of Service SMS Short Message Service WTO World Trade Organization USD United State Dollar VND Vietnam dong SATRA SAIGON TRADING GROUP SASCO Southern Airports Services Company CITAD Centre for Information Technology and Development LIST OF TABLES Table 1.1 SWOT analysis summary Table 1.2 General strategies in the model “Five competitive forces” by Table 2.1 Michael Porter Growth of LienVietBank’s fund mobilization and lending Table 2.2 Business performance results of LienVietBank (unit: VND billion) Table 2.3 The comparison of operating situation of LienVietbank and Table 2.4 competitors in the year 2008 The comparison between the core capacity of LienVietbank and Table 2.5 other competitors Evaluation the key capability of against rivals Table 2.6 Evaluation the surpassing capability of LienVietBank Table 2.7 General business plan in 2010 – 2012 (unit: billion VND,%) Table 2.8 Plan for mobilization (unit: billion VND,%) Table 2.9 Credit operation activity (unit: billion VND,%) Table 2.10 Plan to increase total asset – capital (unit: billion VND,%) Table 2.11 Plan for Profit (unit: billion VND,%) Table 2.12 Business targets in 2013 – 2015 (unit: billion VND,%) Table 2.13 Summary and analysis of business plan targets in 2010-2015 (unit: billion VND,%) Table 3.1 SWOT analysis table of LienViet Bank INTRODUCTION The necessity of the theme: Vietnamese financial market is at present growing more both in scope, form, quality and structure of market participation Under the process of accessing World Trade Organization WTO and Vietnam – US trade agreement, Vietnam undertakes to fairly treat local and foreign banks in terms of banking services to remove limits to access into the local banking service market However, compared with foreign banks, the system of Vietnamese commercial banks still has such weaknesses as financial resources, experience of management, business, technology, quality and service as well as incapacity of risk prevention This requires each commercial bank to apply appropriate remedies to develop, improve competitiveness, seize the control of the local financial market and expand into the international financial market In which, establishing big banks which have multi-purpose and the capacity to catch up with fast changes in the modern world has been becoming a necessary demand and an indispensable tendency On the other hand, the competition among domestic commercial banks as well as the system of banks and local financial institutions is happening fiercely In the market of finance and banking, there are more and more investment funds, insurance companies, urban banks that are newly established and the securities market of Vietnam is taking place eventfully All these things create more financial and investment channels for enterprises and people to choose These financial institutions have the direct competition with banks in raising capital, investment and the competition is just also fierce in the banking industry From the above reality, in order to exist and develop sustainably, Vietnamese commercial banks have to construct their strategy of development in accordance with the specific industry from time to time In addition, the world financial crisis & economic downturn have caused considerable impacts on the banking sector of Vietnam This crisis is also an opportunity for us to have a more comprehensive and practical view of all risks, opportunities, strengths and weaknesses of the system of commercial banks in the country This also creates an essential demand against commercial banks to consider and make their strategy of development In the program of training International Master of Business Administration at the GU with the theme “Strategic Management”, our team is assigned to undertake a major exercise through a project in connection with a certain local enterprise to apply course knowledge to analyze & create solutions on strategic management With these reasons, at the same time in the team there is a member who is working for Lien Viet Joint Stock Commercial Bank so our team has agreed to decide and choose the theme “Perfecting the business strategy of Lien Viet Commercial Joint Stock Bank for 2015 - 2020 period” aimed at contributing to the sustainable development of Lien Viet Commercial Joint Stock Bank – LienViet Bank in the current tendency of regional & global integration Study objectives: - Systemize theoretical matters in terms of strategic management - Analyze & evaluate the situation of strategic execution in the enterprise in the past time - Set forth solutions to perfect the strategy in LienVietBank for 2015 - 2020 period Object & scope of study: - Object: Business strategy of LienVietBank - Scope of study: In the market of Vietnam, it is applied from 2015 - 2020 Study method: It is to apply qualitative methods as follows: - Apply methods to study available documents (secondary documents) to consider scope, structure and tendency of market movement - Study, investigate, survey to collect primary data Expected results: It is expected to help business leaders to re-consider tendency and business plan so with those matters, it is based to prepare a business strategy in 2015 - 2020 to increase competitiveness and ownership value Layout of the theme: In addition to the introduction and conclusion, main contents are included in 03 chapters: - Chapter 1: Argumentative basis on strategic management in the enterprise - Chapter 2: Present situation of business strategy of LienViet Bank - Chapter 3: Perfecting the business strategy of LienViet Bank for 2010-2015 period Assignments undertaken by team members: Based on contents & structure of the theme mentioned above, our team agrees to provide team members with assignments as follows: Team members Tran Ngoc Tuan Vu Duc Hung Dang Thi Hoang Ha Tran Manh Cuong Chapter Introduction Chapter Chapter Chapter Chapter Chapter Chapter Chapter Chapter Conclusion Section 1.3; 1.4; 1.5 3.1; 3.3 1.1; 1.2 2.2.4 3.2 2.1; 2.2 Collect & Select the data of LVB and the banking sector 3.4; 3.5; 3.6 CHAPTER ARGUMENTATIVE BASIS ON STRATEGIC MANAGEMENT IN THE ENTERPRISE 1.1 Overview of strategy and business strategy 1.1.1 Definitions 1.1.1.1 What is the strategy? Strategy is simply known as a plan to create a competitive advantage for a certain organization compared with its competitor The strategy must be understood as what the enterprise is doing and preparing its plan to achieve A good strategy will help managers and staff to define any objectives, recognize the line of action and contribute to the success of the organization On the contrary, if a certain enterprise does not have any specific strategy or operation orientation, it will be like a boat without sailor To further recognize strategy definitions, let’s see some economic viewpoints as follows: Point of view 1: Strategy is a special plan - G Arlleret - “Strategy is aimed to define ways and means to achieve objectives set through policies” - D.Bizrell and group of authors - “Strategy is a general plan leading or orienting a certain enterprise to achieve expected objectives It is the basis to prepare policies and operating skills” - Gluecl - “Strategy is a united, comprehensive and general plan designed to ensure that enterprise objectives will be executed” Point of view 2: Strategy is an art - Alain Threlart said “Strategy is an art that an enterprise uses to against competition and win the victory” - M.Porter said “Strategy is an art applied to establish firm competitive advantages to defend” 10 - Using profits for annual dividend: Since 2009, LienVietBank’s shareholders can enjoy annual dividends and LienVietBank can have its capital increased by paying dividends in the form of capital raising stocks - Selling stocks to existing shareholders and strategic shareholders: LienVietBank should make a plan to sell stocks to old shareholders only and some strategic partners In addition to setting reasonable selling prices, LienVietBank should select its partners from big, prestigious, and experienced investment funds, insurance companies and foreign banks to seek their support in technology and management experience However, after selecting appropriate strategic partners, LienVietBank should carefully consider raising the rate of capital contribution of its partners for effective cooperation - Having its stocks listed in the securities market and sold in public: LienVietBank should prepare necessary conditions for the listing of its stocks in the securities market in 2010 (General assembly of Shareholders of LienVietBank has agreed to approve the listing of LienVietBank stocks on HOSE in 2010) In the current situation, as it is estimated that Vietnam’s economy in particular and the world’s economy in general will experience a strong recovery in 2010, the issuance of its stocks in public will be an opportunity for LienVietBank to raise its charter capital However, regarding the issuance of new stocks, the number issued must go together with the efficiency in the Bank’s operation in order to guarantee dividends for shareholders, avoid sharp declines in stock value that may cause difficulties for later issuance periods - Issuing convertible bonds: Since the capital mobilized from bonds has always been considered equity and this is a long-term capital at a much lower interest rate compared with the dividends the Bank pays to its shareholders, from 2010 onwards, LienVietBank should give priority to raising capital through issuance of convertible shares from 800 to 1,000 billion per year (for those with one-year term) and about 1,500 billion per year (for those with two-year term, and 40% to 60% of the bond value will be converted into stocks in the first year) - Merging, buying up: Studying small banks or rural banks in the absence of conditions to raise capital and grow into urban ones but having good financial status for merging with them or buying them up This objective does not only 78 refer to the creation of more strength expected as a result of the mergence but also aims at taking advantages of their existing branch networks and customers - Regarding the annual average rate of pre-tax profit/ charter capital of 13% for the period of 2012-2015, as this may be a low rate, it is necessary to reconsider and adjust the rate of after-tax profit /charter capital up to 13-15% 3.4.4 Marketing solutions Competition in the business world is becoming more and more drastic, followed by new business concepts of continuous perfection and changes Even though the concept of "Good wine always achieves high reputation despite small pubs" used to be of public interest for a long time, it has been changed dramatically by market competition Whatever good quality products have, without proper promotion, they cannot attract much public attention because of their limited popularity Having realized the great importance of Marketing, LienVietBank has developed Marketing strategies in order to enhance its competitiveness and develop their products and services However, for detailed implementation of those strategies, LienVietBank needs to carry out solutions on: products and services, operation network, customer policies and advertising and marketing as follows: 3.4.4.1 Products, services: - Diversifying the existing products and services and developing modern banking services - Regarding capital mobilization: Diversifying forms, terms of mobilization to best exploit idle capital sources from the public Specially focus on the source of deposits and savings of customers; deposits and loans in the inter-bank market and simultaneously promote the issuance of valued papers, receipt of trusted capital, assets management, and account services - Regarding investment credit activities: Diversifying forms of grating credit in various fields and types of customers The credit investment portfolio needs to be gradually adjusted towards distraction of risks and avoidance of concentration on too large units and industries in order to minimize unexpected impacts on the business situation of LienVietBank once these customers are negatively influenced by market fluctuation Regarding orientation on credit customers, LienVietBank should focus on customers who are small and medium-size enterprises, including 79 those involved in import/export activities and using many banks so that it can provide them with package services and be able to obtain a basic and permanent customer source Along with credit activities, LienVietBank has also promoted its investment in bonds, securities, capital partnership, capital contribution to joint ventures, debt purchase and sale, foreign currency business, etc to facilitate its multifunctional business activities and make great profits - Regarding banking services: LienVietBank must develop its distinguishing products and services that represent its typical characteristics In the period of 2009-2010, LienVietBank should quickly deploy SMS banking services, Internet Banking, multi-tasking ATM machine system, Securities Settlement (MSS) in a comprehensive manner to serve customers as well as complete its services on financial verification, fixed asset verification, expenditure and collection, and trust services Simultaneously, LienVietBank must immediately establish an ad hoc board of experts on studying the execution and provision of new services upon approval by the State Bank and on the development route of banking services This is a very important job which requires serious investment to create qualified and highly different services on the way to achieve its own brand name; accordingly, LienVietBank will be able to confirm its position and enhance its competitiveness in the new situation 3.4.4.2 Transaction network Developing the transaction network plays an important role in the development of LienVietBank as it not only creates conditions for LienVietBank to rapidly expand its scale but also supports the development of banking services, enhancement of retail activities, which helps LienVietBank approach customers and bring its products to customers directly Apart from that, developing the operation network can help promote LienVietBank’s brand name and image as well as heighten its position in the system of commercial banks in Vietnam in particular and the financial market in general Developing and expanding network must be corresponding with the Bank’s development strategies and must ensure management capability, development of manpower and effectiveness in the direction involving preferred development of the network in key areas and localities where economic growth rates are found as high as that in big centrally-controlled cities 80 The operation network of LienVietBank is now still limited and has focused only on Hanoi City and HCM City and not opened in some developed areas of the country Therefore, in the plan of the development strategy for the period of 2010-2012, it is necessary to expand the number of its domestic branches to nearly 30 branches in cities, towns directly under cities and provinces with high economic growth rates such as: - Centrally controlled cities: Hai Phong, Da Nang - In the North: Quang Ninh (Ha Long), Mong Cai, Phu Tho (Viet Tri), Thai Nguyen, Lang Son, Hai Duong - In the Central: Nghe An, Thanh Hoa - In the Southeast: Binh Duong, Long An - In the Southwest: Khanh Hoa (Nha Trang), Binh Dinh (Quy Nhon) - In Central Highlands: Gia Lai (Pleiku), Kon Tum - In Cuu Long River Delta: Dong Thap (Cao Lanh), Kien Giang (Rach Gia), Vinh Long In order to implement this development plan, it is necessary to have comprehensive and specific plans for each period and give the first priority to cities and towns in earlier developed economic areas such as Da Nang, Hai Phong, then to the North, the Southeast and finally the remaining areas 3.4.4.3 Customer policy: - It is necessary to have specific plans on developing the Bank’s customer system, which is currently considered one weakness of LienVietBank because this newly established bank has officially been operational since 4/2008 - Complete customer policies Continue to provide particular products and services to each specific customer group regarding interest rate policies, service preference and customer support - Continue to build up and complete flexible regulations and policies for each specific group of customers Customers who have a large amount of deposit balance may negotiate interest rates, commission policies for deposit service, preferential policies for big traditional customers Provide free door-to-door collection and expenditure services, and so on - Frequently study the improvement of procedures for depositing, withdrawing and transactions with banks in a simple, fast and accurate manner 81 Practice a civilized and polite manner in communicating with customers in order to create good impressions for them - Organize periodical customer surveys on products and services, service quality of each transaction point, and behaviors and working attitude of each bank clerk - Study customer policies of competitors to realize their advantages and disadvantages in order to evaluate and learn from them, and to develop more attractive customer policies 3.4.4.4 Advertising and marketing: - Develop a system of brand name recognition to promote the brand name of LienVietBank as this has not been performed satisfactorily Therefore, the Bank should take into consideration the use of professional advertising companies to create the image and brand name of LienVietBank - Promote activities on publicity, advertising and launching of products and services of LienVietBank under various forms to customers to help customers get acquainted with its banking services and recognize the utility and pre-eminence of those products and services Simultaneously, it is necessary to supervise and evaluate the effectiveness of each form of advertising applied after a certain time in order to avoid unnecessary, wasted and ineffective advertising - Rebuild the website of LienVietBank in the way that can create a friendly, attractive and professional appearance Frequently update information about LienVietbank, its products and services, customer policies, forms of promotion, its operation, and other information related to the finance and currency sector and at the same time, associate with other websites to promote the brand name of LienVietBank to more customers - Frequently organize community activities, social activities, charity activities; sponsor game shows on television and radio together with the advertisement of the brand name and image of LienVietBank to various customers - It is necessary to expand the relationship with universities to support games held for students on securities, currency business, young businessmen, etc This is 82 a good chance not only to advertise and market the Bank but also to find out and attract young talents based on appropriate policies to let them join its manpower 3.4.5 Solution for improvement of risk management capability One principle for the Bank to grow stably is the principle of safety, which means the bank is to implement all principles issued by State management bodies in supervising its business activities, and strictly comply with legal regulations on capital safety The Bank would rather not take the risk with its safety by involving itself in activities highly profitable but legally risky Therefore, risk prevention and management must always be of great importance and the risk management system must be adjusted and its validity enhanced - Credit management must be specially consolidated, not to mention credit policies in which the scope of risk and lending limits must be clearly identified as a guideline for controllable credit growth - Management of market risk must be perfected gradually as a framework for increasing revenue together with managing liquidity effectively - Internal auditing activity must be strengthened to prevent and overcome risks in businesses Besides, internal audit must help analyze causes of risks, propose appropriate and thorough solutions, and successfully build up a remote detection system - The system of risk prevention must be promoted from a basic level Effective risk management will create favorable conditions for management of banking capital in accordance with international norms which Vietnam is about to apply 3.4.6 Research & Development (R&D) R&D plays a very important part in successfully implementing the strategy on “centralization based on differentiation in technology and products” because the output of this activity includes new products and services Currently, the Bank’s R&D activities have not gained high effectiveness Therefore, LienVietBank should seriously revise and re-plan its R&D activities: - Allocate and arrange human resources, financial resources, tools, equipment and operating system; - R&D objectives for each specific period; 83 - Testing and evaluating products of R&D; 3.4.7 Solution for organizational development and expansion of business lines According to its development and business strategy for the period of 2010 - 2015, LienVietBank has introduced plans for developing its network and establishing subsidiaries operating in sectors of insurance, securities, fund management, financial leasing and education Frankly speaking, this is a right development strategy on its way to grow into Lien Viet Financial Corporation at the end of 2015 However, it is necessary to reconsider this strategy to make it more appropriate with the current actual situation and prediction of the financial market for the next years It can be seen that this is a large-scale development strategy for a medium-length period Therefore, for its successful implementation, the following solutions must be applied: - Build a logical route in correspondence with the scope of development of LienVietBank in each of its stages in order to avoid hasty development and creation of pressure and negative effects on the Bank’s business - Balance its capital source in a sensible way at times suitable for its business plan when investing capital in establishing its subsidiaries - It is not advisable to have all the subsidiaries with 100% of its capital owned by the Bank take the form of one-member limited companies Some joint stock companies should be established with over 50% of their capital owned by the Bank so that it can take the right to control as well as to share risks and benefits with them As a result, as those founders and strategic shareholders are big corporations and companies, the Bank can take advantage of their potential customers as well as their experience in management and business development - It is advisable to establish companies in the following forms of ownership: 1/ Lien Viet Insurance Joint Stock Company + Type: Joint stock Company + Ownership: LienVietBank owns 51%, founding shareholders: 20%, strategic shareholders: 20%, other shareholders: 9% 2/ Lien Viet Fund Management Company 84 + Type: One-member limited company + Ownership: LienVietBank owns 100% 3/ Lien Viet Securities Company + Type: One-member limited company + Ownership: LienVietBank owns 100% 4/ Lien Viet Financial Leasing Joint stock company + Type: Joint Stock Company + Ownership: LienVietBank owns 51%, founding shareholders: 20%, strategic shareholders: 20%, other shareholders: 9% 5/ Lien Viet University: should not be established because in fact, a great number of domestic and foreign universities have offered training courses on Finance and Banking Therefore, the Bank should cooperate and associate with these universities to select and recruit students who have good study results , are able to meet requirements and have other characteristics required by the banking industry - The Bank should select big, appropriate domestic and foreign partners who are operating effectively with considerable experience in the lines of each company and who have ambitions to cooperate comprehensively 3.4.8 Conditions for strategic implementation - Commitment of leaders: Heads of sections of all levels must ensure commitment to strictly follow the strategy of LienVietBank - The strategy must be propagated and popularized throughout all departments and managers of all levels must be trained on the strategy so that they can thoroughly understand the significance and importance of executing the business strategy of LienVietBank - Concretizing business strategies of LienVietBank needs to achieved through action plans and detailed plans for each specific section as well as responsibilities of all levels and staff - Developing a specific route for business strategy, followed by the construction of detailed routes for implementation plans - Identifying specific roles and responsibilities of leaders and managers of all levels in implementing the strategy in general and plans in particular 85 - It is necessary to establish a supervision board to check, supervise and promote the implementation of strategies and plans The Bank should also check and evaluate the results in accordance with the route of each period - Ensuring sufficient resources, including financial resources and material resources to successfully implement the strategy Those resources can be supplied by stages to avoid the waste that may be caused if they are supplied in full at the beginning - Ensuring commitments and strict implementation of partners in cooperation in providing resources such as technology, finance, solutions, consultancy, services, etc - Strengthen relationships with strategic partners 3.5 Perfecting organizational structure and control system 3.5.1 Perfecting organizational structure Currently, LienVietBank has established a clear organizational structure based on functional structures In our opinion, this is a typical structure of almost every commercial joint stock bank now and has not been appropriate with the suggested strategy of “centralization based on differentiation in technology and products” We suggest that LienVietBank should build its function-based organizational structure in the form of a matrix as follows: 86 GENERAL ASSEMBLY OF SHAREHOLDERS BOARD OF DIRECTORS controllers HR & ADMINISTRATION BOARD OF GENERAL MANAGERS GENERAL PLAN SUPPORT DIVISIONS BRANCHES & DEPUTY MANAGERS LEGISLATION ACCOUNTING FINANCING R&D MARKETING HANOI HO CHI MINH DA NANG RISK MANAGERMENT CLIENT A CLIENT B SERVICE … SERVICE This organizational structure allows branches & transaction offices to be supported and controlled by functional divisions on the one hand, and to be directly support by the Bank’s Management Board on the other hand This is of very special significance since the branches can take advantage of the relationships of the Management Board and have necessary flexibility for applying particular policies and services to particular types of customers Support divisions should also focus on and invest in their own development for better support to branches & transaction offices 3.5.2 Control system In order for LienVietBank to be able to execute and evaluate the efficiency of its strategy and plans in each period, it must have supervisory activities to give instructions on the implementation of the strategy and to check its finance, which shows us how to compare actual results with expected results and helps us make suggested solutions and activities for settlement and prevention in case LienVietBank does not accept the difference between the actual results and expected results 87 - For strategic supervision: it is necessary to establish a board who are in charge of the implementation as well as the supervision of the implementation of the strategy in the whole system - For financial supervision, LienVietBank has had related departments and offices directly supervise its finance such as the Supervisory Board and Internal Audit Board in cooperation with Finance & Accounting Department to check and support its subsidiaries in checking financial ratios such as: profits against investment capital; profits against assets If these ratios are higher than expected and have a tendency to go up, it means LienVietBank is implementing the strategy properly For the strategy “centralization based on differentiation in technology and products”, we suggest applying a system to supervise output factors of the bank, including: 3.5.2.1 - Control of ratios: Financial ratios: ROA, ROE, safety coefficient, bad debts, targets on cash flow and so on - Ratio on market share - Ratio on customers’ satisfaction - Ratio on recognition of the brand name of LienVietBank 3.5.2.2 Control of strategy: - Position of LienVietBank in the financial market - Level of completion of quality ratios 3.6 Route for implementation of strategic solutions In order to ensure effective inspection, supervision and evaluation of the implementation of strategic solutions, the following route must be executed: No Solutions Technological solutions Manpower solutions Solutions for improvement of financial capability 2010 2011 88 2012 2013 2014 2015 Marketing solutions Solution for improvement of risk management capability R&D solutions Solution for development and expansion of financial -investment business areas 89 CONCLUSION The year 2009 is about to pass with positive signals of the recovery of the world's economy in general and of Vietnam’s in particular Moreover, in the past months, Vietnam's stock market has also gained an impressive growth level All the signals show that Vietnam's economy is on the way to grow again and this is a new opportunity for the financial and banking industry Through the analysis in this writing, we have realized opportunities and threats for the banking industry, and strengths and weaknesses of Lien Viet Commercial Joint Stock Bank Whether LienVietBank, based on its strong points, will be able to grab the chance and overcome the risk depends on the plan and execution of its development strategies Due to our limited knowledge and experience as well as limited time spent on the study, our project report, which is aimed at systemizing the knowledge acquired during the training course for masters of business administration of University and applying it to the completion of business strategy of LienVietBank for the period of 2010-2015, is expected to be a contribution of our experience and opinions to the prosperous development of LienVietBank We hope that, in the near future, LienVietBank will become a leading Commercial Joint Stock Bank in Vietnam We highly appreciate all supporting ideas of lecturers, teachers and learners to make this report more meaningful We would like to express our sincere thanks to university/USA and We would like to show our sincere gratitude to lecturers of the program, who have been dedicated to providing us with valuable knowledge and exchanging their experience with us so that we will be able to improve our knowledge and obtain more opportunities in our promotion as well as the development of our organization Finally, we would like to thank the friendly monitors in our class for their great support and enthusiastic help 90 REFERENCES [1] Liam Fahay & Robert M.Randall (2009), “MBA in hand – Strategic management” [2] Fred R David, Outline of strategic management, Ho Chi Minh City Statistics Publishing House, 2003 [3] Report of LienViet Bank business results in 2008 [4] Report of business activities in 06 first months of 2009 [5 Orientation to develop LienViet Bank (2009) [6] Information on LienViet Bank on the website Lienvietbank.net [7] Report of Techcombank business results in 2008 [8] 2008 annual report made by the Military Bank [9] Business forum (2008), “New draft decree on conditions to establish banks: is any opportunity available?” [10] Economic development magazine (2007), “Vietnamese commercial banks: Strengths-weakness-opportunity-threat” [11] Information on socio-economic situation of Vietnam on the internet 91 APPENDIX ORGANIZATIONAL CHART OF LIENVIETBANK 92 [...]... STOCK BANK 2.1 Introduction of Lien Viet Commercial Joint Stock Bank 2.1.1 General information: Lien Viet commercial joint stock Bank (LienVietBank) was established in accordance with the business license No 91/GP-NHNN dated March 28 th, 2008 by the Governor of the State Bank of Vietnam (SBV) Full name in Vietnamese : Ngân hàng Thương mại Cổ phần Liên Việt Abbreviation name in Vietnamese : Ngân hàng Liên. .. partners are giant financial and banking organizations operating in Vietnam and abroad such as: Him Lam corporation, Sai Gon trading group (SATRA), Southern airport service company (SASCO); Vietnam bank for agriculture and rural development (Agribank), Wells Fargo bank (America), Credit Suisse bank (Switzerland), Oracle Financial Services Software Limited,… 31 LienVietBank heads to build its strong brand... services of Lienviet bank Products and services of Lienviet bank are established and divided into groups in the direction of customer categorization: institution customers, corporate customers, individual customers - Institution customers: including financial organizations, state-owned commercial banks, joint stock commercial banks and foreign banks with deposit and loans in the interbank market, forex... business With the aim of being in the top ten of the commercial banks within the first 5 years after establishment but striving to be a leading bank in terms of modernization, professionalism and trustworthiness in operation, Lienviet bank has just successfully implemented online system throughout the bank on the basis of modernization with core banking softwares with I-FLEX From the very first days of setting... its working regulations and professional process, Lienviet bank applied standard management system ISO-9000 to the banking industry and paid special attention to risk management as well as modernization of domestic and international settlement operations 2.1.2 Organizational structure of Lienviet Bank Organizational structure of Lien Viet bank now follows the model of functional structure Functions... Abbreviation name in Vietnamese : Ngân hàng Liên Việt Abbreviation name in English : LienVietBank Website : LienVietBank.net Chartered capital : VND 3,300 billion Headquarters : No 32, Nguyen Cong Tru street, Ward I, Vi Thanh town, Hau Giang province Logo: Slogan : Link to develop together At present, the total branches and transaction offices of Lienviet bank reach 17 ones (including 1 transaction center,... came from lending in the interbank market (increased by VND1,030 billion) - With respect to lending structure by term, medium and long term loans accounted for 13.3% (6.82% as of 31/12/2008) If loans in the interbank market were excluded, this figure was 17.6% 2.1.4.2 Settlement: - LienVietBank built and completed domestic settlement system through such channels as CITAD, AGRIBANK, VCB Regarding international... which make the bank become one of the pioneer commercial banks in Vietnam who has conducted concentric international settlement activities, processing all transactions at the center This helps the bank to minimize risks, improve settlement quality and enhance its prestige in the international market 2.1.4.3 Business performance results: Table 2.2: Business performance results of LienVietBank (Unit: VND... directors - Chairman of Board of directors: Chairman of Board of directors is the legal representative of Lien Viet bank, except for delegation in international relationship, procedural issues, disputes, liquidation, bankruptcy that are under the competence of General director - LienvietBank’s board of management includes: + Board of management (General director, deputy general directors, chief accountant)... investment and trade, correspondent bank service, trade finance, co-finance-trust, deposits, asset management, lending, treasury services - Corporate customers: Lien Viet bank provides enterprises with such services as lending, support service in the field of import-export, guarantee, domestic and international settlement, forex dealing - Individual customers: Lien Viet bank offers individual customers