GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM Capstone Project Report Theme: Developing a business strategy for the Bank for Investment and Development of Vietnam – Ha Thanh branch for period 2010 -2015 Group 2: Pham Thi Bich Thuy Tran Minh Dien Tran Thi Thu Hien Vu Tuan Anh Class: GaMBA01.X02 HANOI - 2010 TABLE OF CONTENT INTRODUCTION. The necessity of the theme. Study objective of the theme. Subject and scope of study of this theme.
METHODOLOGICAL BASIS TO DEVELOP A BUSINESS STRATEGY. Basic issues of strategy and business strategy. Basic features of a strategy. Roles of a business strategy.
Strategy at Company level. Strategy at Business unit level. Business strategies applied in practical banking operation. Market-entry strategy.
Market-developing strategy. New product- developing strategy. Product differentiation strategy. Strategy administration procedure.
Strategy building process. Formation and selection of a strategy. ANALYSIS OF INTERNAL AND EXTERNAL BUSINESS ENVIRONMENT OF BIDV HA THANH. Analysis of internal business environment.
Vision, mission and operational features of BIDV. Some basic service products of BIDV Ha Thanh Branch and its operational efficiency. External environment analysis. Developing evaluation matrix of external factors affecting BIDV Ha Thanh Branch.
Analysis of internal environment of BIDV Ha Thanh Branch. Internal environment factors. Building matrix of internal factor evaluation. Analysis of strengths, weaknesses, opportunities and threats (SWOT) for BIDV Ha Thanh Branch.
SELECTION OF BUSINESS STRATEGIES AND SOLUTIONS FOR BIDV HA THANH BRANCH FOR PERIOD 2010-2015. Selection of business strategies for BIDV Ha Thanh Branch for period 2010 – 2015. Basis for selection of strategies from matrix of internal and external environment factor evaluation. Formation of strategies from SWOT matrix.
Building a matrix combining internal and external factors. Basis for identifying strategic objectives. The common strategic objectives, orientation of BIDV.3- Business objectives of BIDV Ha Thanh Branch. Business objectives of BIDV Ha Thanh Branch.
Identifying business strategy of BIDV Ha Thanh Branch in 2010-2015. Market penetration strategy. Market development strategy. Strategy on development of new service product.
Product differentiation strategy. Financial capability development strategy. Strategy on improving management and human resources quality. Strategy on building sustainable customer sources.
Strategy to strengthen marketing activities. Solutions to implementation of strategies of BIDV Ha Thanh branch in the period 2010 - 2015. Solutions of capital mobilization growth. Solutions to credit growth and credit quality control.
Solutions to diversify and improve service efficiency and quality. Solutions to the development of retail banking services. Solutions of network development, distribution channels. Solutions for improving risk management ability of BIDV Ha Thanh Branch.
Proposing implementation schedule. Reference criteria for building implementation schedule board. Oriented goals of BIDV Ha Thanh Branch. Proposing implementation schedule.
Proposals to the Bank for Investment and Development of Vietnam. Proposals to the State Bank. Recommendations to the State and related sectors/ministries.86 APPENDIX LIST OF TABLES Table 2. Image matrix of direct competitors.
Market share of BIDV Ha Thanh Branch on area. Matrix of direct competition image. Matrix of external factors evaluation (EFE). Matrix of internal factor evaluation (IFE).
Matrix of strategy promotion by SWOT model. QSPM matrix of S/O group. QSPM Matrix of S/T group. The plan of main business targets in the period 2010-2015.
The structure of service revenue targets of BIDV in the period 2010 - 2015. Table of implementation schedule of business strategic solutions in the period 2010 - 2015.80 LISF OF FIGURES Figure 1. Internal-external evaluation (IEE) Matrix.57 LIST OF CHARTS Chart 1.1: Process of establishing strategy. Porter’s Five Competitive Forces.1: Organizational Structure of BIDV Ha Thanh.27 LIST OF ABBREVIATION ACB : Asia Joint – Stock Commercial Bank AGRIBANK : Agricultural and Rural Development Bank APEC : Asia – Pacific Economic Cooperation ATM : Automated Teller Machine BIDV : Bank for Investment and Development of Vietnam CA : Competitive Advantage CB : Commercial Bank CI : Credit Institution CR : Customer Relations ES : Environment Stability EVN : Electricity of Vietnam FB : Foreign Bank FI : Financial Institution FS : Financial Strength IAS : International Accounting Standard ICS : Individual Customer Service IMF : International Monetary Fund IS : Industrial Strength IT : Information Technology JSCB : Commercial Joint – Stock Bank POS : Point of Sales (POS payment) QSPM : Quantitative Strategic Planning Matrix RB : Retail Bank SACOMBANK : Saigon Thuong Tin Joint – Stock Commercial Bank SBV : State Bank of Vietnam SC : Securities Company SF : Savings Fund SOCB : State-owned Commercial Bank TO : Transaction Office USD : US dollar VIETCOMBANK : Joint Stock Commercial Bank for Foreign Trade of Vietnam VIETINBANK : Vietnam Bank for Industry and Trade VND : Vietnam dong VNSM : Vietnam’s Stock Market WTO : World Trade Organization INTRODUCTION 1.
The necessity of the theme A bank is an economic organization which plays a very important role. The banking system worldwide can affect the development of all aspects of the entire economy in general. Banking activities nowadays have been increasingly developed and banking technologies make the market expansion by large banks happen fast and thus, shortening geographic distances and making transactions in various business areas among global economies closer to each other. This also force thousands of banks and non-banking financial institutions to compete directly with each other for survival and growth.
The question for every bank is to enhance the capacity of corporate management to grow up in any market situations. To achieve that, every bank and every bank branch should have flexible and reasonable vision, goals and business strategies so as to adapt itself to the business environment, creating benefits and being the stimulative factor for the wealth to all customers, from individual, corporate to economic, political and social organizations. BIDV Ha Thanh is one of 20 branches of the Bank for Investment and Development of Vietnam (BIDV) in Hanoi and one of 108 BIDV branches overall the country. Established in September 2003, BIDV Ha Thanh has undergone 6 years of operation, becoming one of top 5 branches with best business achievements throughout BIDV system and a familiar brand-name to private enterprises and individual customers with high income in Hanoi.
BIDV Ha Thanh has made effective business orientation and plans right from the early time of establishment so that it can quickly prove it brand-name and gain a definite position in the market. However, market changes and increasingly severe competition in Hanoi as well as the non-stop development and expansion of banks have make great challenges to the development of BIDV Ha Thanh in the long run. 1 In such a situation, 2010 - 2015 period has been considered as the milestone time for change where the world economy has been in a recession and the competition in finance and banking in Vietnam has become seriously, especially after Vietnam has clear technical barriers in finance banking under the path of WTO joining commitment. Thus, it is truly necessary to predict difficulties to prepare for plans as required to grasp opportunities and overcome challenges, to develop business strategies to make orientation, goals together with practical measures and solutions for banking service activities for this period.
Therefore, based on knowledge in the subjects which group members have mastered during the training program of Global Advance Master of Business Administration (MBA) organized by Vietnam National University in Hanoi and Griggs University, USA with the purpose of enhancing the quality of business administration for managers and leaders for the new time, our group has chosen the theme of "Developing a business strategy for the Bank for Investment and Development of Vietnam, Ha Thanh branch for the period 2010-2015" so as to recommend solutions and orientation for the growth of BIDV Ha Thanh for next 5 years for our Capstone project report. Study objective of the theme The objective to study this theme is to analyze the situation of BIDV Ha Thanh for period 2007 - 2009 and to recommend some strategies for period 2010 - 2015 together with measures of implementation. The primary task of this theme is to study the general theory of commercial banking business strategies and to select a standard strategic management model for analysis. Based on this model, our Graduation assignmentshall assess the current situation of BIDV Ha Thanh for period 2007 - 2009.
Finally, this Assignmentshall present some recommendations for business development strategies for BIDV Ha Thanh for period 2010 - 2015 based on the standard model and the results from real situation of the bank. Subject and scope of study of this theme Subject of study To study major issues during Developing business strategies arising in reality of BIDV Ha Thanh Scope of space: BIDV Ha Thanh Scope of time: 2007 – 2009 period Method of case study - Systematic method: This capstone project report assess all factors which affect the business strategy of the company. With this method, the assessment on factors which affect business strategies shall cover both internal and external environment of the company. - Method of secondary data analysis: Used to study the methodological basis to set up a ground base for the development of business strategy of the company.
- Quantitative method: Used to select and make decision on a business strategy. - Method of strategy analysis, including SWOT matrix, QSPM quantitative matrix. The capstone project report consist of 3 Chapters as follows: Chapter 1: Methodological basis to develop a business strategy. Chapter 2: Analysis of internal and external business environment of BIDV Ha Thanh Chapter 3: Selection of business strategies and solutions for BIDV Ha Thanh for period 2010 – 2015.
3 CHAPTER 1: METHODOLOGICAL BASIS TO DEVELOP A BUSINESS STRATEGY 1. Basic issues of strategy and business strategy 1. Definition Strategy is a term which derived from the Greek word, “Strategos”, used in military: “Strategy is the science and art of military management applicable in making plan and implemented on an overall scale to achieve a final victory ” “Strategy refers to plans of action set out to achieve a final victory in one or more battle field,” wrote Scholar Dao Duy Anh in Vietnamese dictionary. Since 1960s of the 20th century, strategy has been applied in business and the term “business strategy” was born then.
The concept of business strategy has developed with the time and people have accessed it in a number of ways. According to Chandler (1962), “Strategy refers to the determination of basic long – term goals and purposes of enterprises and the application of a series of activities together with the allocation of resources needed for the implementation of this goal ". According to Bateman and Zeithaml ( 1990) “Strategy is a harmonic combination of activities and the allocation of resources to achieve goals of an organization. The strategy of an organization refers to all efforts to optimize capabilities and resources of the organization so as to best react to opportunities and challenges of the external environment”.
In short, business strategy in the market economy is, based on both objective and subjective conditions, and possible resources of the enterprises, to make out tactics, ways and measures so as to ensure the survival and the long-life stable development in accordance with the development goals set out by the enterprise. Basic features of a strategy 4 There have been a number of different opinions and approaches to strategy, though, in any point of view, at any time, strategy still has the most general and basic features as below: - Strategy is to define clearly basic goals and business orientations to be achieved for each period of time and fully grasped in all activities of business administration. - The orientation of a strategy is to ensure the enterprise to continuously and firmly develop in a actively changing business environment. - A business strategy is to ensure mobilize maximum capital and optimize the combination of exploitation and use of business resources of the enterprise at present and in the future, making use of advantages and catching opportunities to achieve a preferential advantage in competition.
- The business strategy of an enterprise is reflected from development to organization, implementation assessment, checking and adjustment of that strategy.